Are sales and use tax being handled properly?
States are becoming more aggressive about collecting use tax when insufficient sales tax was collected. With more automation available to them and more need for revenue enhancement, states are scanning automated records and aggressively pursuing non-payment and underpayment of sales tax. If vendors are not collecting sales tax, make sure that the company knows where use tax must be paid and that it is being reported and paid to the appropriate state. Question 7. Is the company getting “escheated”? Some percentage of checks are never cashed. They may have never been received by the intended recipient. In many instances the intended recipient complains and a replacement check is issued. As states get more aggressive at finding ways to enhance revenue, they have begun to ask companies to provide them with lists of all open checks. Through a process called “escheat,” uncashed checks payable to individuals or organizations within a state must be turned over to that state. Reports must also
