A Consumer Reports article shared the consumer-research organization’s comprehensive “owner-cost” calculations for cars. The article debates depreciation, fuel costs, insurance, maintenance and repair. This approach is similar to comparing the "total cost of ownership" for tax compliance outsourcing.
When tax executives weigh the option of outsourcing returns, they typically compare the cost of managing the returns in-house vs. the outsourcing fee. As they should, of course. But it is also important to ask whether these cost estimates are comprehensive.
Most estimates of in-house compliance costs start and stop with the cost of the tax staff to process the returns. These are a major component of compliance cost, but not the only ones. What about the cost of licensing and maintaining the returns software these employees use? How about the cost of the time accounts payable (A/P) staffers spend on handling check requests for each jurisdiction every month? And the cost of staff to manage all the notices?
The total cost of internally managing sales and use tax compliance may be surprising. That’s why it makes sense to make sure that the calculation of this cost is comprehensive. This tool can help. You want to clearly understand your cost-per-return - our total cost-per-return - before you "drive" down this road.
Please remember that the Tax Matters provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information.