Computer Software Sales & Services
Return Preparation · Tax Compliance · Audit Management · Taxability Reviews · Tax Planning · Registration · Best Practices · Mitigation Strategies
Since 1980 McClellan Davis, LLC, has provided sales and use tax services to thousands of clients, from sole proprietors to multinational corporations, including virtually every type of business that is subject to sales or use tax. Whether you’re looking for professional help with multistate return preparation services, sales tax compliance and exposure analysis, nexus studies and voluntary disclosures, audit management and appeals, or refund claims, our sales tax specialists will provide the expertise you need.
In the ever-changing world of computer services and software sales including cloud-based offerings such as software-as-a-service (SaaS), infrastructure-as-a-service (IaaS), and platform-as-a-service (PaaS), it’s easy to get confused and fall out of compliance with your business’ tax obligations. This creates audit exposure and increases the chances that your business will be issued a tax liability when a tax agency performs an audit.
McClellan Davis has the experience and expertise necessary to provide you with competent sales tax audit management & defense, sales tax appeals, claims for refund or reverse audits, or professional compliance help for an audit by the California Department of Tax and Fee Administration (formerly known as the Board of Equalization) or other state taxing agency. Our sales tax attorneys, CPAs and consultants have a significant amount of experience with computer software and/or computer service companies’ sales tax liabilities and refund claims and they are able to leverage that experience to provide you with the expertise you need to resolve your matter favorably.
Our staff of former state sales tax auditors, sales tax attorneys and CPAs offer a variety of sales tax services including but not limited to, the following:
- Sales Tax Audit Management:?Because many of our professionals are former state sales tax auditors, supervisors, reviewers or trainers, they have the insider knowledge needed to guide you through the audit process. We can even have the audit transferred to our office, in some cases. We work directly with the California Department of Tax and Fee Administration to minimize interruptions to your business, permitting you to focus your time and resources on what matters most – operating your business!
- Sales tax audit defense and appeals:?If your audit results in an overstated sales tax liability, we can file a petition for redetermination and represent your business through the administrative appeals process.? Our sales tax attorneys, CPAs and auditors have a very high rate of success obtaining reductions to sales tax liabilities.? If it becomes necessary, we have the staff available to take your matter to court in order to obtain a favorable outcome.
- Settlements and Compromises: In cases where the best course of action is to settle, our sales tax consultants will prepare and submit the requisite paperwork, negotiate with the state and seek to resolve the case with a favorable settlement agreement.
- Litigation Support: If your computer software and/or computer service company’s protest reaches the judicial level, we have attorneys that can represent your business directly, through the entire process. We can also provide expert witness and consultation services to assist your sales tax legal team in a sales tax court case.
- Single or Multistate Return Preparation: Nobody has to tell you what a time-consuming and laborious process filing tax returns can be — even more so when your business operates in multiple states. Let our staff manage your filing cost-effectively and efficiently so you can focus your time on operating your business. You can rest assured that your returns will be prepared accurately and filed timely. Our return and compliance services almost always provide a cost-effective alternative to preparing returns in-house.
- Refund Claims and Reverse Audits:?In situations where your business has overpaid the tax, we will work with you and the agency to get your money back by filing a sales tax refund. Usually, we are able to do this on a contingency fee basis — so if you don’t get money back, you pay us nothing.
- Compliance Services: The best way to defeat a computer software and/or computer service’s tax liability is to avoid it from being assessed in the first place.? Our expert sales tax advisors can provide your business with the necessary sales and use tax guidance to help enable your business to accurately apply sales tax to your transactions and to properly document your sales, purchases and any applicable sales tax exemptions. Our team of experts have performed in-depth research in every state that applies a statewide sales tax for dozens of different computer services and computer software offerings and we can use our knowledge and experience to help your company comply with its obligations. Moreover, we have litigated dozens of computer services and computer software related issues which provides us with a unique understanding of where issues exist and what we need to do to correct and mitigate any potential exposure moving forward.
What to do When You’ve Just Received an Audit Notice?
If your computer software and/or computer service business has just received notice of a tax audit, McClellan Davis can create a custom strategy for your California sales tax audit, or other state sales tax audit. We’ll work directly with the state auditor, handle correspondence and do all we can to keep your business operate without significant interruption. Call our office to speak to one of our professionals; we’ll be glad to provide you with a free initial consultation to address your sales and use tax concerns with no obligation.
What to do when you receive a bill?
Whether your audit was managed in-house or by an outside advisor, McClellan Davis can review the results of your audit and advise you of your options so an informed decision can be made regarding the next steps in your case. Sometimes the most prudent business decision is to accept the results of an audit, but you need to have the right person review the audit results to ensure that the right decision is made. Typically, we are able to uncover opportunities for significant adjustments to your sales tax liability through our review and we will provide you with a free initial consultation and/or a capped fee audit review to help you make the right decision.
Why Choose McClellan Davis, LLC?
McClellan Davis has a long history of helping businesses with a variety of tax liability and compliance issues. We’ve represented thousands of clients — from small sole proprietors to large multinational corporations. Our qualified staff of former state auditors and attorneys, our focused practice on sales and use tax, coupled with extensive experience provides us with a unique ability to help your business. If you have a computer software and/or computer service business and are dealing with California sales tax complications or multistate tax issues, let us help. Our consultants are highly qualified and able to give you the support you need.
Case Study – McClellan Davis’ Services for a Multistate Computer Software & Services Company
Our client operates a company that specializes in providing a variety of software and related services. It works primarily with Fortune 500 companies and many of its engagements include a wide range of complex technical products and services. As a foreign-based growing company, its sales and use tax controls were lacking in many respects.
A team of experts at McClellan Davis started by reviewing the existing practices of the company to gain a thorough understanding of the business’ activities, operations and controls. With that knowledge, a plan was developed and implemented that included performing multistate taxability reviews, sales tax registrations, voluntary disclosure agreements, contract and invoice language revisions, return preparation practices and tax mitigation strategies.
By providing these services, McClellan Davis was able to help bring our client into compliance in every state. As a sign of our successful efforts, we recently managed sales and use tax audits in California, New York, New Jersey, Illinois and Texas; all resulting in zero liability audits!
Currently we prepare and process returns in every state, manage sales tax audits and answer taxability, compliance and tax law questions as they arise for this large international IT company.
Read our blog articles regarding some of the more common questions and issues surrounding the computer software and/or computer service industry: