New CPA Trendlines / Avalara playbook shows accountants don’t need to be SALT specialists before they can help.
Sales tax is getting harder for clients to manage.
By CPA Trendlines
with Avalara
Sales tax used to be easy to leave to somebody else.
That gets harder as clients sell more products and services across more state and local boundaries. The accountant may not consider sales tax part of the engagement. The client may assume it is.
Download the guide: From Generalist to SALT-Savvy: How Accounting Practitioners Can Build Sales Tax Expertise That Wins Clients.
A new guide from CPA Trendlines and Avalara takes aim at the gap.
“From Generalist to SALT-Savvy: How Accounting Practitioners Can Build Sales Tax Expertise That Wins Clients” is now available, with a practical roadmap for accounting firms that want to add sales tax compliance and advisory work without first building a full-fledged state and local tax practice.
The United States has more than 12,000 sales and use tax jurisdictions, according to the guide. States set their own rules, local governments can impose additional taxes, and taxability, nexus, exemptions and rates can change during the year. The expansion of economic nexus rules following the U.S. Supreme Court’s 2018 South Dakota v. Wayfair decision adds another layer for businesses selling across state lines.
For accounting firms, the paradox is increasingly difficult to ignore: Sales tax is becoming more complicated at precisely the time clients are more likely to expect their accountant to know what to do about it.
The Service Gap Is the Opportunity
The guide starts with a familiar problem. Accountants traditionally concentrate on financial statements, income tax returns and broader business advice. Sales tax frequently gets less attention.
Yet clients still encounter the problem — and may bring it to their accountant first.
The guide sees an opening particularly for smaller practices that lack specialized SALT expertise but want to provide services their clients are requesting.
The answer is not necessarily hiring a team of SALT specialists.
Instead, the guide lays out a graduated model for getting into the business. A firm can designate one person as its SALT lead, train staff on basics such as nexus and taxability, begin with a limited group of clients, and establish standardized checklists and escalation procedures before expanding.
Assessments and referrals can develop into recurring advisory work and, eventually, managed compliance services. Outside specialists can handle more complicated analysis, remediation and compliance while the accounting firm retains the client relationship.
Technology supplies another part of the infrastructure. The guide identifies nexus and threshold monitoring, product and service taxability research, centralized reporting and current rate information as functions that technology can support.
One Risk: Clients May Think You’re Already Doing It
One of the guide’s more immediate warnings has little to do with technology. Clients may assume their accounting firm is monitoring sales tax exposure even when the engagement does not include it.
The guide recommends explicitly defining what the firm does and does not cover. The issue becomes more consequential as a client’s business expands. A company selling in one state may present a relatively straightforward filing job. A multistate business can require nexus determinations, registrations and analysis of taxability, rates and thresholds across multiple jurisdictions.
The complexity can also change the economics of the service.
From Compliance Chore to Revenue Line
The guide challenges the traditional view of sales tax preparation as a low-fee compliance task.
Even a straightforward return provides more than calculation and filing, it argues. The client is also paying for confidence that the tax is handled correctly and for someone to deal with questions when they arise.
As jurisdictional complexity increases, so does the work — and potentially its value. The larger implication for small and midsize firms is sales tax is becoming harder to ignore.
The guide’s model puts the accountant in the middle of the relationship while distributing the technical work among trained staff, technology and specialist partners. Avalara positions its accountant products, including Managed Returns for Accountants, as infrastructure for firms choosing that approach.
For firms already looking beyond traditional tax preparation toward recurring compliance and advisory revenue, sales tax represents another service clients may already need — whether their accountant has formally put it on the menu yet or not.