Nashville, Tenn., Oct. 14, 2025 (GLOBE NEWSWIRE) — In the current unpredictable business landscape, CEOs and CFOs face increasing pressure to find a balance between state tax compliance and cost efficiency. State and local taxes (SALT) have become a critical area where thoughtful strategies can safeguard margins, minimize risk, and reveal new opportunities. Leaders should focus on three key areas:
1. Voluntary Disclosure Agreements: A Thoughtful Approach to Compliance
Many businesses may not realize they are lagging in meeting their multi-state tax filing responsibilities. Voluntary Disclosure Agreements (VDAs) provide organizations with the opportunity to proactively address latent tax liabilities and issues before states begin enforcement actions, leading to a notable decrease in penalties (and sometimes interest) as well as reduced prior filing periods. Collaborating with a SALT expert helps companies navigate complex state regulations, secure advantageous agreements, and remedy oversights and filing mistakes that could increase their risk. “VDAs are about getting ahead of the curve and getting into compliance before a state has the chance to find you and issue a hefty tax assessment for prior tax years,” observes Jay Hancock, Shareholder and Practice Leader, LBMC State and Local Tax.
2. Sales Tax Engine Oversight: Effective Coding and Controls That Reduce Costs
Ensuring accurate coding of products within sales tax engines such as Avalara and Vertex is crucial, as oversights can lead to significant financial repercussions. It is recommended that leaders include this as a quarterly review topic, particularly during times of transition or retirement of key employees. Expert oversight can confirm that products are accurately categorized and taxed, avoiding overcollection of taxes, the need for refund requests, etc. “Sales tax engines are powerful tools, but they require constant, ongoing attention,” says Leigh Ann Vernich, co-leader in LBMC’s State and Local Tax Practice.
3. Audit Defense Preparedness: A Comprehensive Approach to Risk Management
States are more empowered than ever to require out-of-state companies to collect sales taxes and pay income tax. As state and local audit activity increases, businesses that incorporate a robust SALT review process into their compliance strategy are in a stronger position to protect themselves. Examining in-state contracts, analyzing nexus exposure, and understanding transaction flows through a SALT perspective can uncover potential vulnerabilities ahead of an auditor’s review. Companies that adopt a proactive stance toward audit readiness conserve valuable time and resources and protect their reputation.
“State and local tax has moved way past being just a box to check. It can no longer be considered a nuisance or just a cost of doing business,” Vernich said. “Working with SALT experts on VDAs, sales tax technology, and audit readiness helps businesses protect growth today and build a stronger foundation for tomorrow.”
To learn more about how your organization can effectively tackle SALT challenges and seize opportunities, please reach out to LBMC State and Local Tax team leaders Jay Hancock at [email protected] or Leigh Ann Vernich at [email protected].
About LBMC
LBMC is the #1 Tennessee-based professional services firm and one of the Southeast’s largest accounting and advisory firms serving more than 11,000 clients nationwide with diverse needs across a spectrum of industries. Primary client groups include privately-owned and private-equity-backed middle market companies in the healthcare, manufacturing/distribution, real estate, and technology spaces. LBMC leverages advanced business intelligence and AI technologies to drive growth, efficiency, and strategic insights for our clients. Founded in 1984 as a traditional accounting firm, LBMC today is an industry leader in audit, tax, advisory, technology, human resources, and wealth advisory services for businesses and individuals. LBMC has more than 1,000 team members, with offices in Nashville, Chattanooga, Knoxville, and Memphis, Tennessee; Louisville, Kentucky; and Charlotte, North Carolina and remote offices. For more information on LBMC’s experts and comprehensive services, visit our website or call 615-377-4600. Discover career opportunities and learn more about how LBMC’s services and culture can support your business goals. Connect with us on LinkedIn for the latest insights on talent, client engagement, and business growth.
- Thoughtful strategies can help minimize risk for leaders when filing state and local taxes.