Sales and use tax may sound dry, but if you don’t get sales and use tax right, you might need legal representation.
What Is Sales and Use Tax?
Sales tax is charged when you buy taxable goods or services. Use tax applies when you buy something out of state or online and sales tax was not collected, but your state still wants its cut. Think of it as a tax safety net for the government. The IRS has a sales tax deduction calculator that “helps you figure the amount of state and local general sales tax you can claim when you itemize deductions on Schedule A (Forms 1040 or 1040-SR). Your total deduction for state and local income, sales, and property taxes is limited to a combined, total deduction of $10,000 ($5,000 if married filing separately).”
When Do You Need to File a Claim?
You may have overpaid sales tax, or your business may have received a surprise use tax assessment. Perhaps there was a classification mistake, or you qualify for exemptions such as resale, manufacturing, or nonprofit status, but the taxing agency is not giving you a break. In these situations, filing a tax claim is not just an option, it is essential.
The Risks of NOT Filing a Claim
Ignoring or mishandling sales and use tax issues can escalate quickly. Penalties and interest can pile up. Audits may expand into full investigations. In some extreme cases, there could even be criminal implications. In short, the longer you wait, the deeper the hole grows.
Examples of Sales and Use Tax Claims
- Overpayment Refund: Jane’s boutique paid full sales tax on wholesale purchases without realizing they qualified for a resale exemption. With the right claim, she recovers thousands in overpaid tax.
- Use Tax Audit Dispute: A tech startup bought expensive equipment from out of state and did not include sales and use tax. The state hits them with a large bill and added interest. Filing a claim and negotiating can substantially reduce the liability.
- Exemption Classification: A nonprofit purchased supplies believing they were exempt, but got assessed. A proactive claim shows their qualifying status, overturns the assessment, and avoids penalties.
How The Lapidus Law Firm Can Help With Sales and Use Tax Claims
Michael Lapidus has uncommon depth in tax law, with an LL.M. in Taxation from Georgetown. He has tackled IRS disputes, state assessments, penalty abatements, and sales and use tax claims for both individuals and businesses. He is not just crunching numbers; he is guiding clients personally with hands-on support during every step of the legal process.
Do not let a sales or use tax misstep spiral out of control. The longer you wait, the steeper the penalties and interest become. Here is what you can do right now: pick up the phone and call Michael Lapidus who will be your advocate through an audit or tax collection process and steer you through the chaos. Call 202-785-5111 (DC) or 301-852-7500 (MD), or visit The Lapidus Law Firm at www.lapiduslawfirm.com.
Written by Michael Lapidus