Indirect Tax Services

Helping you navigate compliance and complicated issues

Property taxes can be complicated, costly, and time-consuming. But not all companies have the internal skills and resources to effectively manage compliance and reduce liabilities. Deloitte's property tax services use proprietary technology, efficient processes, and deep experience to help companies approach their property taxes in a more streamlined, seamless, and tax-efficient way.

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In our experience, indirect tax overpayment errors may occur on up to 10% of a company's overall spend, exist across all types of industries, and should be of particular focus for companies with annual expenditures in the hundreds of millions of dollars.

Deloitte Tax has both national and local resources and industry focused specialists dedicated to indirect tax refund reviews. To help companies quantify potential indirect tax refund opportunities, we review their purchases for potential errors relative to the application of sales, use, telecommunications, excise, severance, and other transaction-based taxes. We use smart optical character recognition (OCR), cognitive technology and machine learning, and data analytics to efficiently identify, recover, and reduce overpaid indirect taxes in high-volume, complex transactional data environments. By leveraging technology in our refund reviews, Deloitte Tax can review large populations of transactions, even those that otherwise would not rise to the materiality necessary for a manual review.

In addition to identifying, preparing, and filing refund claims, Deloitte Tax also has substantial experience communicating with vendors and jurisdictions to confirm that they review filed claims. Maintaining open channels of communication is key to the recovery of overpaid taxes. Deloitte Tax will also recommend process improvements and provide training to reduce future overpayments.

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Many of our Deloitte Tax indirect tax specialists have past experiences as former employees of state departments of revenue. Our professionals have insight into tax law and administrative audit policies, as well as industry knowledge. We also assist companies with indirect tax managed audits. Managed audits allow the taxpayer to perform the tax audit in conjunction with the state within guidelines laid out by the state's tax auditors. Many states abate or reduce interest and/or penalties associated with a managed audit assessment.

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Value to your company

Whether preparing 40 returns per month or 400, indirect tax compliance can consume a significant amount of your company's limited indirect tax resources. Indirect tax (including sales and use, gross receipts, and transaction taxes) and associated compliance is an increasingly important task as states seek to expand registration, notice, and reporting requirements. Our solution frees up time that could be instead focused on more valuable tasks such as refund and exposure reviews, audit defense, exemption certificate compliance, taxability research, or G/L account reconciliations.

Whether it is dealing with the consolidation of multiple data sources, manually preparing returns, populating reports to aid in general ledger account reconciliation, or handling jurisdictional notices, indirect tax compliance is often a time-consuming and tedious process. Inaccurate compliance may result in significant penalties and interest, overlooked refund opportunities, an increase in tax notices, and the potential for financial reporting issues.

Our approach and methodology

Deloitte leverages leading technology tools and processes in the delivery of indirect tax compliance cosource services.

Our approach is focused on:

• Adopting a methodology that addresses your company's objectives
• Efficiently transitioning your company's current tax preparation obligations
• Providing returns timely for your review and approval
• Providing feedback on discovered data or tax compliance issues
• Providing reports in the requisite format, including reconciling tax source data to tax payments
• Addressing indirect tax notices in a timely manner and providing notice status via a notice tracker

We leverage our Deloitte Online technology to provide electronic copies of returns for the company's review and approval.

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Our experienced indirect tax specialists can perform an in-depth review of your overall sales and use tax function to provide observations regarding the effectiveness of sales and use tax processes, identify potential exposure areas, share our knowledge regarding leading practices, and provide recommendations for improvement.

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Deloitte assistance in the area of excise tax extends to both compliance and consulting services. Our excise tax professionals help companies identify, analyze, and quantify potential tax refunds. Through our ongoing professional relationships with the IRS, TTB, and taxation authorities in most states, Deloitte Tax can get to the root of complex issues quickly and often resolve issues more efficiently than if a company sought to address the audit or controversy solely on its own.

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Our severance tax professionals help companies identify, analyze, and quantify potential oil and gas and other mineral severance tax refunds. Through the use of our proprietary technology, Deloitte has the capability to address a client's severance tax needs and evolving compliance requirements. Deloitte's assistance in the area of severance tax extends to both compliance outsourcing and compliance support services. Many of our severance tax professionals have significant experience with state departments of revenue and have insight into tax law and administrative auditor policies, as well as in-depth industry knowledge.

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Indirect tax is, by its nature, accompanied by voluminous data and repetitive processes. Technology can help indirect tax professionals reduce manual processes through data-wrangling and robotic process automation, reducing errors and identifying data anomalies using analytics, and integrating AI techniques such as OCR with machine learning to rapidly provide actionable data back to the tax analyst and executive alike.

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All types of companies have unclaimed property compliance obligations, which may include the filing of up to 56 annual reports, but there are many misconceptions about unclaimed property that contribute to under-reporting and exposure areas when companies are selected for audits by the states.

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A Deloitte XaaS characterization review guides companies through the complex analysis of determining what is being sold to customers, what is being purchased for companies’ own use, and what actions can be taken to identify tax opportunities and mitigate risk.

As businesses evolve and begin offering new ways to engage customers, the use of the cloud and bundled offerings has been transformed. The convergence of next-gen solutions coupled with legacy tax law creates the prefect storm and the need for tax departments to be focused on sales and use tax characterization. Whether a company is making purchases to integrate into dedicated products, engaging in M&A activity, utilizing technology to deliver or make available new offerings, and more, a characterization review with our indirect tax professionals can help to navigate the proper ways to mitigate risk and explore potential savings.

By engaging in a characterization workshop, Deloitte can, among other offerings, assist clients in:

• Proper taxability determinations,
• Sourcing of revenue streams/purchases to the proper jurisdictions, and
• Classifications of transactions

Whether standing up a new business/revenue stream, integrating, or looking for potential refund opportunities, Deloitte's characterization review can assist clients in their efforts to be compliant with taxing jurisdictions, mitigate risk and identify proper ASC 450 reserves, and pursue other benefits.

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