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Though mild by historical standards, the impact of the economy's downturn is far-reaching. States, impacted by the decrease in tax revenue, are making up lost revenue by increasing the number of income and sales/use tax audits. It has come to our attention that states are targeting medical and dental practices for sales/use tax audits. Many physicians are not aware that out-of-state purchases of medical equipment and supplies may be subject to sales/use tax when used or consumed in the state. This potential tax liability, plus penalties and interest, could be substantial upon audit. Physicians and dentists are well-advised to take steps to minimize their risk.

State and local tax laws vary from state to state and can be very complex. Our State and Local Tax (SALT) Group can help minimize your exposure, starting with implementing controls to comply with the tax laws currently in effect. We believe this could reduce examination adjustments typically assessed for multiple year periods. To minimize or avoid penalties and to minimize interest charges on additions to tax resulting from such adjustments, it can be critical to voluntarily comply with the law before the state taxing authorities come calling.

The burden of state and local tax on business has increased much more rapidly than that of federal taxes. State and local taxes are a key consideration in business planning. Our SALT Group can help you develop the strategies necessary to minimize these taxes and provide you with ongoing assistance in your day-to-day operations.

The services of the SALT Group include:

• Advanced tax planning to maximize tax exemptions.
• Audit representation to ensure you do not pay more than legally required.
• Updates on changing interpretations, new tax laws, and policies.
• Compliance checkups to make sure your systems and records are adequate and to minimize audit exposure.
• Research and answers to your sales and use tax questions.
• Training for your staff.

John C. Genz CPA is a Senior Manager in Amper’s Tax Department. He has more than 16 years of experience and has specialized expertise in state & local tax issues. Contact John at (732) 919-1400, ext. 48.