Reducing Use Tax Exposure Through Proactive Partnership
A growing manufacturer was purchasing specialized equipment to expand its operations. Confident in their understanding of tax laws, the accounting team had been self-assessing use tax on several capital purchases—without realizing that some qualified for manufacturing exemptions. The oversight resulted in significant overpayments and unnecessary cash flow loss.
Asking the Right Questions to Uncover Hidden Opportunities
While providing other advisory services, CSH’s indirect tax team took the initiative to review the client’s capital budgeting process and inquire about how use tax decisions were made. This collaborative discussion revealed inconsistencies in the treatment of certain purchases.
Rather than taking a one-time “refund recovery” approach, CSH helped the client rethink its use tax policies, clarifying how exemptions should be applied and building a stronger compliance foundation for the future.
Recovering Dollars and Strengthening Controls
Identified and recovered more than half a million dollars in overpaid tax.
Improved internal decision-making and review processes around use tax.
Reduced future audit exposure by aligning purchasing and tax procedures.
Key Takeaway: The most valuable results often come from trusted, ongoing relationships. By combining curiosity with expertise, CSH helped this client transform a refund discovery into long-term risk reduction and process improvement.
