FEAR AND UNCERTAINTY: ARE YOU PLAYING THE "WAIT AND SEE" GAME?
Fear is a funny thing. In some cases, it can be an emotion that keeps you from achieving your potential. It makes you shrink back, become smaller. It makes you retreat and not push forward. In other cases, it can protect you from harm. It can keep you from doing something that you shouldn't. It can cause you to rise above your circumstances and find creative solutions to your situation.
The question when faced with feelings of fear is: is your fear justified? Should you be afraid? Should you retreat or push forward in the face of fear?
Fear can be a great motivator. It can cause you to be more resourceful than you would have been otherwise. It can cause you to be more creative. To look "outside the box" and pursue new avenues that you may have never thought of, or thought possible.
Regardless of the situation, when feeling fear, we should seek to channel that emotion into positive results or action. Whether that positive action is retreating or pushing forward.
In the world of state taxes, companies are faced with vast amounts of "uncertainty" when applying multiple state rules that lack conformity to their company's situation. Sometimes the rules are clear and easy to apply; however, based on my 18 years of experience of dealing with almost every state, I can say that more often than not, either the rules are not clear, OR the company's facts are so unique that applying basic rules is difficult. Hence, uncertainty occurs.
This uncertainty can produce fear for companies. Fear of audits and assessments of additional tax, interest and penalties. When companies have these kinds of fears, companies have two choices: (1) play the "wait and see" game; or (2) proactively address their fears. I would obviously recommend that companies proactively address their fears. Companies can do this by reviewing their business activities and the tax rules within each applicable state. Once this analysis is complete, the company can make an "informed" decision about how to proceed. This allows the company to have a plan and not walk in fear and uncertainty.
Don't walk in fear and uncertainty (in life and in state taxes). Knowledge is power and in this case, can protect your company's cash flow today and in the future. Take action to gain that knowledge.
Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State Tax Notes entitled, "The SALT Effect." For more info, visit his website: www.leveragestateandlocaltax.com
You can reach Brian at firstname.lastname@example.org.
Because state and local taxes are deceptively simple and endlessly complicated.