303.618.8993
Business Owners, CFO’s and Controllers!
• Some experts say there are about 9,600 sales tax
jurisdictions in the U.S.
• Others say there are more than 12,000
• Colorado alone has over 300
• Like it or not, it’s your responsibility to know whether
or not you must collect the sales or use taxes for any
of them
• If any of them decide that you should have collected
their taxes and filed their tax returns, but you didn’t,
you could be liable for tens or even hundreds of
thousands of dollars
"I'm a CPA, but when my clients have sales and use tax issues, there is only one person I'll turn to and that's Keith Crichton. He is the authority on the subject and there is no close second"
Jeff Prager, Founder, Backroom Management Services, LLC
Sales and use taxes have become a gold mine for state and local governments, which are using much more aggressive audits. In some cases there are no statutes of limitations on how far back they can assess, penalize and collect. And there are evolving federal efforts to allow states to force out of state retailers to collect their sales and use taxes for them, which would open those retailers to audits by all states.
Crichton Consulting Services will help you determine what your responsibilities are, and solve any problems you may already have, even those you may not know about.
Get the answers. Call us! 303.618.8993
About
Keith Crichton has over 25 years experience in tax consulting, corporate tax management and public accounting, especially in the income and sales taxes of all 50 states. In recent years he has been a consultant providing accounting and tax services to multiple medium to large companies in the Denver area. Prior to that he had been a tax and accounting consultant with a major international consulting firm, head of the tax departments for two closely held Denver companies with operations in multiple states.
In 2009 Keith formed Crichton Consulting Services, LLC to narrow his focus to only Sales and Use Taxes, and to apply his extensive multi-state experience to a type of tax that is frequently overlooked by many companies. He assists small to mid-sized businesses with the challenges they face from the increasing number and intensity of Sales and Use Tax Audits being done by States, as well as City governments in Colorado.
Keith holds a Master of Taxation from the University of Denver, an MBA from the University of Colorado and a B.S. in Accountancy from Miami University in Oxford, Ohio. He is a Certified Public Accountant and a Member of the American Institute of Certified Public Accountants, the Colorado Society of Certified Public Accountants and the Financial Executives Networking Group. He enjoys traveling with his wife and their dogs, automobiles and auto racing, golf, music and movies.
" Keith helped us make gray areas more black and white in Denver city and county audit. He was extremely knowledgeable, responsive, understandable, patient and pleasant—a great guy who does great work."
Mary Schlener, Director of Finance, Redd Iron, Inc.
Services
For Business Owners, CFO's or Controllers
For CPA Firms and their Clients
The following is a sample of the types of services we provide.
For the Business Owner, CFO or Controller
NEXUS REVIEWS - Most likely you are focused on the day to day operations and growth of the business, not on sales taxes. But as the business expands its operations, you may create sufficient connections with another state (or Colorado city) so that they can require that you collect their sales or use taxes. This is called Nexus. If a company is found to have Nexus, but has not collected sales or use taxes and filed returns, they can be held liable for the uncollected taxes for an unlimited period of time in the past.
A Nexus Review is a study of the operations of a business to determine if there are any locations where it makes business sense to collect sales or use taxes from customers and file returns.
AUDIT MANAGEMENT AND DEFENSE – in the past we have reduced assessments by as much as 80%. We will also help prepare for an upcoming audit, and would prefer to do so, if possible.
VOLUNTARY DISCLOSURE AGREEMENTS – many states and cities have programs which allow a taxpayer to voluntarily declare that they should have collected and paid taxes but failed to do so. In these cases penalties and the periods of time for which back taxes will be due are commonly reduced significantly.
TAX QUESTIONS – rapidly expanding businesses often want to know what products or services are taxable, and what their collection responsibilities will be before they begin an expansion into new states or Colorado cities.
TRANSACTION PLANNING – just like income tax planning, when a business has a significant transaction upcoming which involves tangible personal property, then sales taxes should be considered in addition to other taxes. Further, the definition of tangible personal property varies from one location to another.
For CPA Firms and their Clients
Crichton Consulting Services, LLC is a CPA firm that specializes in the sales and use taxes of every state. We do not provide any advisory or compliance services related to income, franchise, property or other taxes, nor do we provide other types of accounting services. We will partner with you to provide you or your clients with sales and use tax services not commonly offered by most CPA firms.
Crichton Consulting Services, LLC is dedicated to helping you:
• determine if you should be, or should have been collecting sales taxes
• if the answer is yes, help you decide what to do, and then do it
• if the answer is no, then help you establish procedures to stay that way
• resolve any existing issues or audits
• avoid potential issues in the future
• answer technical questions that others have not been able to resolve
• prepare for an upcoming audit
• apply for a refund if you have overpaid taxes in the past
• plan for a future transaction
Get the answers! Call us! 303.618.8993
"Keith is a definitive expert in sales, use and personal property tax; Keith is someone I refer to other income tax professionals like me. He is very timely, helpful and excellent resource for smaller income tax firms like ours, especially with multi-state issues."
Daniel Giordano, Principal, DCG CPAs
Key Questions
Impact on Business Operations
No! You might be overpaying current taxes, or may need to address ways to minimize/eliminate taxes on up coming ventures. Tax rules can be confusing, conflicting, are constantly changing, and can have a dramatic effect on the outcome of transactions.
Is It Worth Fighting?
Increasingly businesses are unaware that they have nexus, and are therefore required to collect sales taxes and file returns. Consequently they are being assessed for the uncollected taxes, interest and penalties. However businesses that file can generally be audited for only the prior 36 months, and audit assessments that are challenged result in reductions 99% of the time. In some cases an audit by one jurisdiction can trigger subsequent audits by others.
What's the Line In The Sand that Determines Nexus?
Nexus is the legal term used to describe the point at which a business has established sufficient physical presence in a tax jurisdiction for that jurisdiction to require the business to collect and remit its sales taxes, and file its tax returns. The rules regarding what creates nexus are different in virtually every location – each state is different, and in Colorado each home rule city is different.
There are many ways in which a business can directly or indirectly create nexus for itself, whether they realize it or not. Some of the ways a business can create nexus include:
• opening an office, having equipment, inventory or
employees located in a jurisdiction
• leasing or renting equipment to a customer in
another jurisdiction
• making deliveries to customers in another
jurisdiction using its own vehicles
• installing its products in another jurisdiction
• sending repair or maintenance personnel to a
customer’s location in another jurisdiction, or hiring
contractors to do the work
• paying commissions to an agent or affiliate in
another jurisdiction
• selling items from catalogs or over the internet, then
accepting returns at “brick and mortar” retail
locations
• licensing software for use in other jurisdictions
• advertising in certain ways (such as with billboards)
in some states
• attending trade shows, especially if sales are made or
orders are taken
• being a partner (including limited partner) in a
partnership doing business in another jurisdiction
The rules change almost monthly. If your company is going to be doing a significant amount of business with a customer in a new geographic area, it would be wise to have us check the nexus rules for you in that location.
Why Crichton Consulting Services?
Business Owners: Get in front of sales and use tax issues before you encounter any precarious situations. Find out what you don’t know that can hurt you!
CFO’s: Protect your company in this volatile and rapidly evolving tax environment. Can you really afford to find out after the fact that you didn’t really know what could hurt you? (But it was your responsibility….)
CPA Firms: Crichton Consulting Services can be a subject matter expert for your firm. We do not provide other tax or accounting services, so we do not compete with you, but want to enhance the level of services you provide to your clients.
So, What Are Use Taxes?
A use tax is a tax on the use, storage or consumption of taxable property or a taxable service. It is often thought of as a complement to a sales tax. In general it’s purpose is to substitute for sales taxes which, for some reason, were not collected on a particular transaction.
Businesses are responsible for accruing and paying use taxes on their purchases of all taxable equipment, supplies, furniture and other business assets if sales taxes were not charged, or the wrong sales taxes were charged by the vendor. One example that is often overlooked in Colorado is that businesses are liable for use tax on food that is brought into their office for their employees. That is very common because sales taxes are usually not charged on food at grocery stores.
If a business moves its tangible personal property from one jurisdiction to another, the business may owe use taxes to the new jurisdiction. That can occur when the use tax rate at the new location is higher than the sales/use tax rate at the old location. The business will owe use tax equal to the purchase price of all taxable property times the difference between the two tax rates.
Just like most other aspects of sales and use taxes, the use tax side of the equation is equally as complicated as the sales tax side. So don’t forget to consider use taxes when moving your office, your equipment, or feeding your employees! If we can help in any way, please call us in advance so that we can help you minimize your tax obligations.
Is non-payment or underpayment of sales or use taxes always the issue?
Why spend time and money avoiding or challenging a sales and use tax audit?
What's the line in the sand that determines tax liability?
Why Crichton Consulting Services?
So, what are Use Taxes?
"I have had occasions where clients have encountered sales and use tax issues. By using Keith's expertise, these matters have been resolved, and I would not hesitate using him again when these issues arise."
David Hansen, Plummer & Hansen Corporation, Management Consulting Firm
"Our company used Crichton Consulting to assist with a City of Denver audit as well as a complex research project. Keith was extremely knowledgeable, responsive and an expert in the sales tax field. We would highly recommend Keith to anyone needing sales tax assistance."
Christine Kennedy, Chief Financial Officer
M2 Lease Funds, LLC
We provide a free initial consultation to help address sales and use tax issues in Colorado, or any of the other 45 states which have sales and use, or transaction taxes.
We can share strategy, talk tactics, and rough out an appropriate game plan.
Find out where you stand. Contact Crichton Consulting Services to start the conversation.
Contact
6075 S. Filbert Court
Centennial, CO 80121
303.618.8993
www.crichtoncs.com
We provide a free initial consultation to help address sales and use tax issues and the handling of past, present and/or prospective challenges. As part of this initial session, we will advise about whether or not our services make financial sense in your particular situation.
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