Industry Research Highlights Exemption Certificate Risk

Though they represent multiple industries and interests, tax professionals have little trouble agreeing that compliance and audit concerns associated with missing or invalid exemption certificates is significantly challenging - too costly, fraught with errors, and too often leading to assessments that drain revenues and resources.

With that in mind, Vertex Inc. recently surveyed tax professionals and state audit officials. The purposes of the surveys were to identify ways to streamline exemption certificate management, reduce sales and use tax assessments and help companies deal with related tax issues more efficiently. The surveys, conducted separately, revealed that while tax professionals and state audit officials see the challenges from different vantage points, there are many shared concerns. There are also important areas of agreement of how to solve some of the most vexing certificate and tax issues, particularly regarding ways to reduce assessments.

As tax professionals and state audit officials both acknowledged, seldom – if ever – have state audit officials spoken so candidly about the exemption certificate process, assessments, and how automation might help. In that light, this paper will discuss the findings of both studies and will offer concrete, real-life examples of the issues organizations face with exemption certificates and audit assessments. Further, it will show that when organizations automate their certificate and tax processes, they save money, expend fewer resources addressing their tax issues and reduce their audit assessments.