Keeping track of customer exemption certificates should be an integral part of sales and use tax management, but it often gets shoved aside until businesses finally get dinged by a state audit assessment. Companies are forever losing their certificates, which seems pretty astounding until you realize that they can run into the thousands — or even tens of thousands — for a large organization. There comes a point where stuffing them into a filing cabinet somewhere doesn’t work anymore.

Missing or expired exemption certificates are a favorite target of state Department of Revenue auditors, though many authorities give businesses a grace period to come up with the documentation — sometimes as much as 90 days, according to a new white paper from tax and business law information and software provider CCH, a Wolters Kluwer business.

The paper gives a useful basic overview of this particularly vexing area of the transaction tax compliance realm, covering the differences between entity-based and use-based customer exemptions; the various types of exemptions (quite a range, including resale, government, agricultural, and aircraft maintenance — yes, aircraft maintenance); receipt requirements; and some recent developments. Plus a list of nine best practices. Click here to download the white paper as a pdf. ###