Income tax and sales tax run on different calendars, rules, and risk profiles. When the April deadline passes, accounting firms have a useful window to review where clients may have sales tax exposure.
What an exposure review covers
A meaningful review should look at:
- Nexus status and registration gaps.
- Product taxability across the jurisdictions where the client sells.
- Filing accuracy, including rates, jurisdictions, and exemptions.
- Current exemption certificates for tax-exempt customers.
Clients can cross a threshold, add a taxable product, or create physical nexus through a remote employee while their attention is elsewhere.
Why timing matters
Exposure compounds from the point an obligation begins, not when the gap is discovered. Many states offer voluntary disclosure programs that can limit lookback periods or reduce penalties when a business comes forward proactively.
An after-tax-season review creates a current-state baseline while there is still time to address registration gaps and filing errors before another quarter of liability accumulates.
How automation helps
The traditional review requires pulling transaction data, checking thresholds, confirming registration, and reviewing product categories by hand. Kintsugi can run exposure analyses across jurisdictions, monitor thresholds in real time, and flag gaps for follow-up.
For firms offering recurring sales tax advisory, that automation makes consistent delivery possible without turning every review into a manual project.
