Exemption Certificate Gathering
We have been asked to assist clients in gathering exemption certificates, direct pay permits, and XYZ letters for clients that have not historically gathered such exemptions. We have experience sending bulk emails to the Company’s customers, tracking and reviewing the certificates as they come in, and then recalculating the estimated tax exposure. We charge a base fee for managing the process and calculating the exposure, as well as a fee for each certificate reviewed.
01
Create a Sales Tax Exposure Model
We create a sales tax model that includes sales by customer data so that we can determine which customers the Company should focus on related to gathering exemption certificates. We also make it so we can adjust the liability based upon which certificates come in.
02
Work with the Client to Create a SalesTax Email Address
We work with the Company’s IT department to set up a dedicated salestax@client.com email address where all copies of exemption certificates can be gathered and stored. Alternatively, we can help the Client set up a sales tax engine which can be used to gather and maintain the exemptions.
03
Blast Emails to Client's Customers Requesting Exemptions
We work with special software to blast requests to customers for copies of exemption certificates, including a copy of a blank uniform certificate.
04
Exemption Review
We then review the exemption documentation gathered to confirm whether it is valid. Most states require a properly completed exemption certificate with the buyer's sales tax identification number for each state, the name and address of the buyer, the name and address of the seller, what is being purchased, and a signature. That said, certain states will accept a sales tax license. For customers who self-accrued tax or were already assessed under audit, we can provide an XYZ letter that documents that tax has been paid.
Exposure Quantification & Review
When needed for a Buy Side or Sell Side deal, we conduct a comprehensive Exposure Quantification and Review to identify risks and provide strategic clarity.
1
Nexus Analysis: We evaluate both economic and physical nexus to determine the company's filing obligations across jurisdictions.
2
Data Validation: Our team reviews sales data to identify and categorize potentially taxable transactions accurately.
3
Exemption Review: We analyze reseller certificates, direct pay permits, and manufacturing exemptions to minimize liabilities.
4
Exposure Estimation: We provide a refined, professional estimate of potential tax exposure to support deal finalization.