4 Ways to Evaluate Sales and Use Tax Return Outsourcing Providers

  • December 21, 2020

Choosing an outsourcing provider for sales and use tax compliance is a lot like hiring a new employee. You want to make sure you maximize your chances of creating a reliable, productive, long-term relationship.

I’ve covered some areas that you should inquire about in two other posts:

In the first, I talked about scope of services. In the second, I suggested taking a close look at the firm’s experience level and communication skills. 

Here are three more important selection criteria to round out the set:

1. Approach

When new employees walk through the door on their first day, much of their success hinges on their commitment to learning as much as they can about the company and department, as quickly as possible. When you’re considering a potential outsourcing provider, it’s worth thoroughly assessing their commitment and approach to learning your unique needs. The more a provider knows about your industry, your company and your tax process, the more likely that provider is to deliver value.

Useful approach-focused questions to ask prospective outsourcers include: 

  • How do you plan to get up to speed on our company’s specific compliance needs? 
  • What experience do you have with the tax compliance regulations in our key jurisdictions?

2. Reputation

Job candidates’ reputations are based on the credibility they’ve built up over the course of their careers. The same holds for outsourcing providers. Evaluate the outsourcer’s reputation based on the credibility and integrity they’ve established over the years with clients and tax jurisdictions alike.

Useful reputation-focused questions include

  • What illustrations can you provide to demonstrate that tax authorities view your company as highly credible and reliable? 
  • How do you convey to your entire workforce the importance of maintaining a top-notch reputation in the eyes of customers and tax jurisdictions?

3. References

You wouldn’t hire a new employee without checking references, and the same holds true when you’re hiring an outsourcer. Any reputable firm should be eager to furnish a healthy list of references across a variety of industries. When you’re contacting the outsourcer’s clients, ask them about the provider’s ability to perform in each of the areas I’ve outlined above. Useful questions to ask the outsourcer’s clients include: 

  • How did the outsourcing provider respond to a problem that arose in your relationship? 
  • What impressed you about that response? 
  • What one of your outsourcing provider’s service offerings would you like to see strengthened, and why? 

As I mentioned in a previous blog, sales and use tax returns compliance is a potential candidate for outsourcing and I encourage you to visit the Vertex Resource Library to learn more on the topic.


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. THE VIEWS AND OPINIONS EXPRESSED IN TAX MATTERS ARE THOSE OF THE AUTHORS AND DO NOT NECESSARILY REFLECT THE OFFICIAL POLICY, POSITION, OR OPINION OF VERTEX INC.

Blog Author

Larry Mellon, Tax Directory, Vertex Inc

Larry Mellon

Tax Director

See All Resources by Larry

Larry Mellon is a Tax Director in the Chief Tax Office, where he is responsible for providing insights, thought leadership and customer-centric direction to Vertex functional groups, supporting the continued expansion of Vertex indirect tax solutions and overall enterprise strategy. He has over 30 years of experience in sales and use tax compliance, risk assessment, jurisdictional audits, administration and management, as well as VAT compliance. Larry joined Vertex in 2005 as a Sales and Income Tax Supervisor and has served as Tax Manager since 2012, where he has played a pivotal role in elevating and advancing the company’s tax management offerings.

Prior to joining Vertex, Larry served as a Senior Tax Accountant and Property Tax Manager at Foamex International, Inc., a polyurethane and advanced polymer foam product manufacturer and marketer. Mellon also held multiple roles at The Franklin Mint and is a member of the Institute of Professionals in Taxation (IPT).

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