As a business owner, you want to ensure your company’s finances stay secure. That means protecting yourself and shareholders from liability due to unpaid taxes. Unfortunately, sometimes it’s hard to keep up with all of the ever-changing tax laws in each state you sell goods or services — leaving many companies open to potentially hefty unpaid sales tax liabilities. In this blog post, Michael E Weintraub Esq discusses the information businesses need to know about these liabilities and what they can do to protect themselves and their shareholders from potential losses associated with them. Read on for more!
Michael E Weintraub Esq On Protecting Shareholder Value — And Yourself — From Unfunded Sales Tax Liabilities
According to Michael E Weintraub Esq, when it comes to protecting shareholder value and avoiding unfunded sales tax liabilities, businesses must take into consideration a number of factors. Shareholders want to ensure that their investments remain secure and maintain their financial health over the long term. As such, they need to be aware of the potential risks associated with unfunded sales tax liabilities. Unfunded sales tax liabilities refer to unpaid taxes by businesses on behalf of customers for goods or services sold within a given jurisdiction.
The first step in protecting shareholder value is understanding the regulations surrounding sales tax in each state where business is conducted. Depending on the type of business being run, there are varying levels of compliance required around collecting and remitting taxes to state agencies responsible for managing them. Failing to comply with the regulations can lead to potential fines and penalties that could damage a business’s financial health.
Furthermore, businesses, as per Michael E Weintraub Esq, should make sure they are accurately calculating the amount of sales tax due on each transaction. Under-calculating or not making accurate estimates can result in unexpected liabilities down the line. Additionally, if any compliance changes occur within the state or in how taxes are administered, businesses must be aware of them so they don’t miss out on important updates that could affect their ability to protect shareholder value.
In 2017 alone, U.S. companies paid over $6 billion in sales taxes and accounted for nearly 15% of total tax collections nationwide, according to data from the U.S. Census Bureau. To illustrate the potential damage from not closely managing sales tax liabilities, consider the example of a retail store that fails to pay sales taxes for just one quarter. Depending on the state and county regulations in place, the business could end up owing thousands of dollars in fines and penalties. These costs can add up quickly and represent a substantial risk to shareholder value if left unchecked.
Michael E Weintraub Esq’s Concluding Thoughts
According to Michael E Weintraub Esq, protecting shareholder value by avoiding unfunded sales tax liabilities is an important responsibility for businesses of all sizes. Businesses must ensure they are aware of the compliance requirements in each jurisdiction where they do business and are prepared to respond quickly to any changes in taxation rules or regulations. Additionally, they should always make sure they are accurately calculating their tax obligations per transaction so they can remain on top of their liabilities and avoid any unexpected costs. By taking these steps, businesses will be well-positioned to protect shareholder value and preserve their financial standing in the long term.
