Refining Multistate Tax Compliance & Recovering Overpaid Use Tax
A nationally operating organization implemented third-party software to manage sales tax compliance across multiple states. A lengthy product list and a selection of over 2,000 possible sales tax characterizations led to extensive mischaracterizations. This led to inappropriate tax collections in some states, failure to collect tax in other states, and a recommendation by the software company to pursue voluntary disclosures in nearly every state where the company wasn't registered.
Turning Complex Tax Data into Clarity
CSH’s indirect tax specialists conducted a deep review of the client’s product and service classifications, comparing them against each state’s taxability rules. Through this detailed analysis, the team identified where transactions were truly taxable and where over collections and under collections had occurred.
In partnership with the client’s internal finance team, CSH guided a voluntary disclosure process in only the states where exposure genuinely existed. The project concluded with CSH taking control of the ongoing compliance process to ensure greater accuracy going forward.
CSH also reviewed the company's use tax policies, which led to a substantial refund recovery.
Significant Savings and Sustainable Compliance
Reduced tax exposure from more than 30 states to fewer than half that number.
Secured a refund exceeding $1 million for over-accrued use tax.
Strengthened the organization’s compliance framework and risk controls, giving leadership confidence in future filings.
Key Takeaway: Even the most advanced tax systems can produce costly errors without expert oversight. Partnering with professionals who understand multi-state tax nuances can uncover major savings and reinforce long-term compliance.
