Did you know that in many states preservation, REO and inspection services may be considered taxable services?
In Texas, uncollected tax can be recouped from both the service provider and/or the purchaser. See Texas State Comptroller’s statute, 3.286 (d)(2)(A): http://texreg.sos.state.tx.us/public/readtac$ext.TacPage?sl=T&app=9&p_dir=F&p_rloc=179229&p_tloc=14760&p_ploc=1&pg=2&p_tac=&ti=34&pt=1&ch=3&rl=286
Unfortunately, many states do not have a statute of limitations on recouping lost tax revenue on sales & use, franchise, and/or state income tax for businesses. Additionally, many service providers do not have the technology or capability to determining tax liability.
Case Synopsis: If your servicing shop is in Oklahoma, your national preservation provider is in North Dakota, and you pay for debris removal on a property located in Texas, you should pay sales tax. Unless you have a tax exemption or a resale certificate, debris, lawn maintenance and other services are considered taxable services under Texas State law. The national provider that you’ve contracted has created nexus by their agent/contractor performing taxable services.
See Texas statute 3.356 Real Property; http://texreg.sos.state.tx.us/public/readtac$ext.TacPage?sl=R&app=9&p_dir=&p_rloc=&p_tloc=&p_ploc=&pg=1&p_tac=&ti=34&pt=1&ch=3&rl=356
Don’t risk receiving a tax bill with penalty from a non-compliant REO/Preservation partner. Mitigate your risk. Call AIM Your Way to ensure compliance for industry best practices. 800-776-1815.
To read more, visit my blog; https://aimyourway.com/blog/