Manufacturing tax tips: Reduce audit risk and boost accuracy

The Manufacturing Tax Tips white paper outlines key tax challenges facing manufacturers and distributors, especially in navigating sales and use tax complexities. With changing legislation, expanding economic nexus rules, and detailed exemption requirements, businesses must understand their obligations to avoid audit risks and penalties. The guide explores how exemptions apply, the implications of drop shipping, inventory withdrawals, and interplant transfers — all of which can trigger taxable events if not properly managed.

The report also highlights proactive steps manufacturers can take to improve compliance and reduce risk:

• Track and manage exemption certificates with proper documentation
• Understand economic nexus requirements post-Wayfair decision
• Assess and optimize tax processes using automation and ERP integrations
• Work with tax professionals to interpret complex multi-state tax rules

By implementing the recommendations, manufacturers can strengthen compliance, streamline tax operations, and reduce costly errors during audits.