The More you know

Frequently Asked Questions

Accounting and Finance

What accounting and finance services does Clearview Group offer?

Clearview provides a comprehensive suite of accounting and finance services, including interim staffing, business transformation, software implementation, audit readiness and support, technical accounting, and transaction advisory. Clearview has the experience to support any accounting needs your business may have and will partner with you to understand your business and determine what those needs are for your current situation.

What is pre-IPO?

Pre-IPO refers to the phase a company goes through as it prepares to become publicly traded through an Initial Public Offering (IPO).

The preparation includes strengthening the company’s financial reporting systems, undergoing rigorous financial audits, establishing strong corporate governance policies, and ensuring compliance with regulatory requirements.

Companies must also develop a robust investor relations strategy, set a realistic valuation, and often engage with investment bankers and legal advisors to navigate the complex IPO process.

How do I prepare for an audit?

The three main steps to preparing your business for an audit are reviewing internal policies and procedures, reviewing account balances, and reviewing technical accounting.

What is audit readiness?

Audit readiness is the process to help a business prepare for a financial statement audit. The process is ongoing and involves enhancing transparency, strengthening internal controls, and continuously updating reporting mechanisms. It ensures that an organization’s financial information is accurate and current.

A business could benefit from audit readiness if it’s about to experience a first-time audit, there were changes in accounting standards, the business has complex transactions, or it’s experiencing resource constraints.

Do I need accounting for mergers and acquisitions?

Yes, accounting services are crucial for a smooth and successful M&A process. We can help you with due diligence, post-close transaction support, transaction readiness, and more.

What are the benefits of outsourcing accounting and finance services?

Outsourcing accounting and finance services provides access to specialized expertise and advanced accounting technologies without the overhead costs of hiring full-time staff. Outsourcing also allows for scalability and flexibility, enabling companies to adjust the level of support to their needs.

When a company chooses to hire over utilizing interim staffing, it must worry about employee benefits, training, and onboarding expenses. Instead, when a company decides to outsource, it can focus on its core competencies by entrusting financial tasks to dedicated experts, ensuring that financial practices are up-to-date with the latest standards and technological advancements.

What is interim staffing?

a. Interim staffing can also be referred to as staff augmentation. It’s the temporary provision of employees to fill employment needs within a company. Interim staffing can be used for any short-, mid-, or long-term staffing needs. It often addresses workforce gaps caused by seasonal peaks, employee leave or absences, special projects, or specific needs.

For example, a company needs help with its financial close or reporting process. Currently, they do not have the right expertise in-house. The Clearview Group team would work with the company to identify and deliver the right team to ensure accurate and timely reporting.

Audit and Assurance

What areas are covered in an audit of a defined contribution plan?

Audit teams will determine testing strategy based on their initial risk assessment of the plan; however, the following areas would typically be covered:

Participant and employer contributions
Participant data
Benefits paid from the plan
Participant loans
Expenses paid from the plan
Nondiscrimination testing compliance
Parties-in-interest transactions

What are common mistakes with employee benefit plan audits?

The three common areas of errors are:

Mistakes in the determination of eligible wages (e.g., excluding bonuses when they should be included)
Late remittances of contributions
Mistakes in the computation of vesting

When would an audit warrant an ERISA attorney involvement?

Whenever significant operational errors occur, plan sponsors should consider engaging ERISA counsel.

Plan sponsors can self-correct many operational errors – such as late remittances and minor errors in the calculation of eligible wages, contributions, or vesting. When larger errors are identified, such as material errors in the calculation of eligible wages, or it’s determined that there is a missing plan amendment, then it’s recommended to talk with ERISA counsel.

What areas does the Department of Labor (DOL) focus on in audits?

The DOL tends to focus on:

Participant data and eligibility
Delinquent payroll deposits
Proper vesting
Lost participants

What is ERISA?

ERISA stands for the Employee Retirement Income Security Act of 1974. It’s a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to protect individuals in these plans.

ERISA requires plans to provide participants with plan information, including:

Important information about plan features and funding.
Minimum standards for participation, vesting, benefit accrual, and funding.
Fiduciary responsibilities for those who manage and control plan assets.
Grievance and appeals process for participants to get benefits from their plans.
The right to sue for benefits and breaches of fiduciary duty.

There may also be certain state laws that affect employee benefit plans, but ERISA is a federal law that supersedes any state laws that relate to private employer-sponsored retirement and health plans.

What triggers a Department of Labor (DOL) audit?

A DOL audit can be triggered by various factors, such as significant assets or liabilities, late or incomplete filings of the annual report (Form 5500), complaints from plan participants, or indications of noncompliance with ERISA regulations. Random selection by the Department of Labor (DOL) can also trigger an audit.

Beyond compliance, what are the benefits of financial statement audit?

During the course of a financial statement audit, we may uncover situations that you may want to pay attention to, such as: instances of fraud, rebate opportunities (e.g., state and local tax), phishing scams and security risks, property tax rebates, or instances of foul play.

We can also provide deeper insights and advice regarding good governance and best practices. A financial statement audit, completed with a trusted audit partner, can provide the appropriate level of assurance AND help you improve your business.

How do I know what level of assurance is needed for my financial statement audit?

You likely need a financial statement audit, review, or compilation because someone, such as a lender or contractor, has requested it from you.

The lender or contractor will specify whether they request a full audit, a review, or a compilation. For larger amounts of money being lent, you will likely need a higher level of assurance, whereas a contractor may simply request a review. If you're going out to raise funds, getting a full audit may be a good idea.

What are the potential consequences of not being compliant with your EBP audit?

Companies found to be non-compliant with the auditing requirements under ERISA can face fines from the Department of Labor of up to $100,000.

What are some of the typical issues that come up during employee benefit plan audits?

Communication issues are among the most common problems that come up during Employee Benefit Plan (EBP) audits. Communication from an auditor may be inconsistent or incomplete, resulting in missed deadlines, last-minute requests, and unnecessary stress.

Another common issue identified during EBP audits relates to errors in plan operation. For instance, sometimes, a business will misinterpret a plan document's definition of wages, resulting in incorrect 401k deferral or employer matching amounts.

While the latter can be rectified during the audit process, a company can do little if its audit partner is not communicating effectively with them. That's why at Clearview, we are committed to erring on the side of over-communication, ensuring consistency and transparency to every EBP audit client.

What number of participants requires an annual employee benefit plan audit?

Plans with 100 participants or more require an annual employee benefit plan audit.

There is an exception to the 100-participant threshold. ERISA allows employers with between 80 and 120 participants, as of the first day of the plan year, to file Form 5500 in the same category (large or small) as indicated on Form 5500 for the previous year. Large plans are required to attach audited financial statements to their Form 5500 filing.

What happens when my business gets audited?

When your business is audited, an auditor examines your financial records and processes to ensure accuracy, compliance with accounting standards, and the absence of misstatements. The audit process will typically include preparation, examination of records, analysis and testing, feedback, reporting, and recommendations.

What is an employee benefit plan audit?

An Employee Benefit Plan (EBP) audit is a specialized audit of a company's employee benefit plans, such as 401(k) or pension plans. It's typically required for plans with a significant number of participants (100 participants or more).

The purpose is to ensure the plan operates according to the plan documents and the applicable laws and regulations. The audit also confirms the plan's financial statements are accurately presented and comply with regulations, such as those under the Employee Retirement Income Security Act (ERISA).

Lastly, an EBP audit certifies that the funds are used solely to benefit the plan participants and their beneficiaries. It helps identify operational errors, inefficiencies, or areas for improvement in the plan's administration.

How do audits affect my business?

Audits impact businesses by ensuring financial statements' accuracy, compliance with accounting standards, and identifying areas for operational improvements. They enhance credibility with investors, lenders, and other stakeholders and can uncover inefficiencies or risks in financial processes. Audits may require resource allocation for preparation and payment of additional taxes or penalties.

Who needs a financial statement audit?

A financial statement audit is typically required for publicly traded companies due to regulatory requirements, such as those mandated by the SEC. However, private companies may also need an audit for investor or shareholder requirements, banking and financing, regulatory compliance, preparation for sale or IPO, grant applications, contractual obligations, or internal planning.

What is a financial statement audit?

A financial statement audit thoroughly examines a company's financial records and reporting activities. Conducted by an independent auditor, this audit aims to provide assurance that a company’s financial statements are free from material misstatement and are presented fairly in accordance with applicable accounting standards (like GAAP or IFRS).

What are the three levels of assurance?

The three levels of assurance are audits, reviews, and compilations.

Audit provides the highest level of assurance. It involves an in-depth examination of financial records, internal controls, and accounting systems. An auditor tests the information provided and gives an opinion on whether the financial statements are free of material misstatement and accurately represent the company's financial position.

A review offers a moderate level of assurance. It’s less extensive than an audit and mainly involves analytical procedures and inquiries to assess the financial statements. While an accountant reviews the statements to ascertain whether they are plausible, no opinion is given. Instead, a conclusion is drawn that nothing has come to the accountant’s attention that causes them to believe the financial statements are not presented fairly.

A compilation is the lowest level of assurance. An accountant assembles the financial statements based on information provided by management without performing any audit or review procedures. There is no assurance or opinion expressed on the financial statements; the accountant simply compiles the financial data into the format of financial statements.

What is assurance?

Assurance refers to the professional services provided by auditors or accountants to ensure the accuracy and compliance of an organization’s financial information. It gives stakeholders, like investors and regulatory bodies, confidence that financial statements and processes are reliable, transparent, and adhere to relevant standards and laws.

Compliance and Risk Management

What does Sarbanes-Oxley 404 require, and who does it apply to?

SOX 404 relates to internal controls over financial reporting at public companies.

It requires public companies to include a management report on the company’s internal control over financial reporting (ICFR) and an auditor's attestation in their annual reports.

SOX 404 applies to all publicly traded companies in the United States, including wholly-owned subsidiaries of foreign companies. It also applies to accounting firms that provide auditing services to these companies.

The intent behind SOX 404 is to enhance the reliability and accuracy of corporate financial statements, thereby protecting investors by improving the quality and transparency of financial reporting.

Section 404(a) and (b) require that an independent auditor attest to management's assessment of the effectiveness of internal controls.

Section 404(a) applies to non-accelerated filers - companies with a public float of less than $75 million.

Section 404(b) applies to accelerated filers - companies with a public float of between $75 million and $700 million and large accelerated filers with a public float of $700 million or more.

How long does it take to perform a SOC examination?

If you are undertaking your first SOC examination, we recommend performing a SOC readiness assessment before starting the examination period to help position the organization for a successful examination.

The timeframe can vary based on several factors, but companies should plan on 9-14 months from the onset of the readiness assessment process, through an audit period, and ultimately to having a SOC report they can provide their customers.

How often should risk managers perform a risk assessment?

The exact answer will vary depending on your organization’s size, structure, operations, industry, and various unique factors. However, a risk assessment should not be a one-time event, as your organization's risk landscape will change over time.

Work with your advisor to determine the right cadence and structure for routine risk assessments so you can re-evaluate how your company is performing related to known risks and have a process in place to identify emerging risks continuously.

How does a SOX program benefit my company beyond compliance?

While SOX compliance has its challenges and can be an added financial burden, a well-defined SOX program can offer many benefits to an organization, including:

Enhanced internal controls
Improved risk management
Minimization of human error through process automation
Predictable financials
Standardized processes
Streamlined audits

Further, by implementing a SOX program, your organization will reduce accounting complexity as you move to a centralized system and simplify your internal processes.

Are SOC audits required?

Legally speaking, no governing authority requires service organizations to undergo a SOC audit. The absence of such an audit will not result in any penalties or fines.

Who needs a SOC audit?

There are various reasons why an organization would need a SOC audit; they include:

You are providing a service to clients.
Your existing clients are asking for a SOC report.
When submitting a proposal to a new client, they ask if you have a SOC report.
You want an edge over your competitors.

What are the types of SOC reports?

There are three types of SOC reports – SOC 1, SOC 2, and SOC 3

What is SOC compliance?

SOC (Service Organization Control) compliance involves audits of the controls at a service organization, especially those related to information security. SOC reports assure the effectiveness of these controls, which is crucial for businesses handling sensitive information.

What is enterprise risk management (ERM)?

Enterprise Risk Management (ERM) is a comprehensive approach to identifying, assessing, managing, and mitigating potential risks that could affect a company's objectives.

It encompasses risk identification, assessment,response development, and monitoring.

ERM is integral in ensuring that risks are managed within a level acceptable to the organization. It is a holistic approach that considers the interrelationships between various risk types across an organization and integrates risk management with existing planning and strategy processes. Specific details of ERM include the use of risk appetite statements, risk governance structures, and risk reporting systems.

ERM aims to provide a top-down view of all risks and their potential impact, allowing for better strategic planning and decision-making.

When do I need an IT audit?

You may need an IT audit after any significant IT changes, after a security breach or incident, if your business has gone through a merger or acquisition, or even if your stakeholders need assurance.

Besides these specific events, it’s a best practice for your business to establish a regular audit schedule, mainly if your business operates in a regulated industry. In these industries, IT audits are required to ensure compliance.

Other best practices include staying informed about the latest cybersecurity threats, ensuring alignment with industry standards, and engaging with experienced auditors who can provide a thorough and unbiased analysis of your IT operations.

Why is an IT audit important?

IT audit and compliance are vital to ensure that a company’s information technology systems are secure, reliable, and in line with industry standards and regulations.

What is an IT audit?

An IT audit comprehensively examines an organization's information technology systems, management, operations, and related processes. The primary objective of an IT audit is to assess the systems to ensure they are adequately safeguarded, provide reliable information to users, and align with the organization's objectives.

What is the purpose of internal audit?

Internal audit assesses and improves the effectiveness of a company’s governance, risk management, and internal control processes. It involves evaluating the efficiency of operations, the reliability of financial reporting, compliance with laws and regulations, and safeguarding assets.

What is Sarbanes-Oxley (SOX) compliance?

Sarbanes-Oxley (SOX) compliance is adhering to the Sarbanes-Oxley Act of 2002, a U.S. federal law established to protect investors and the public from accounting fraud by imposing strict requirements on public companies and accounting firms. It's crucial for public companies as it mandates strict financial reporting and internal control requirements to prevent corporate fraud.

When a business needs help to meet SOX compliance requirements, Clearview Group provides various services and support, including internal controls rationalization and optimization, Workiva Integrated risk/compliance technology implementation, SOX staff augmentation, process improvement and enhancement, and policy and procedure advisory and development.

ESG Advisory

What is the CSRD?

The Corporate Sustainability Reporting Directive (CSRD) introduces stringent reporting criteria for EU businesses on environmental, social, and governance (ESG) aspects. Positioned as an advanced version of its predecessor, the Non-Financial Reporting Directive (NFRD), the CSRD focuses on bringing forth the significance of ESG factors, suggesting their deep-rooted financial implications

Why is ESG important?

Adhering to ESG standards can enhance a company's reputation, attract responsible investors, reduce regulatory risks, and contribute positively to society and the environment.

What is ESG?

ESG stands for environmental, social, and governance. It’s a type of compliance that involves a business's commitment to sustainable and ethical operations.

Business Income Tax

Can I still claim the Employee Retention Tax Credit?

The IRS halted new ERTC claim processing in September 2023 due to an increase in ERTC fraud and scams. The IRS has reallocated its resources to prioritize reviewing ERTC claims, emphasizing compliance and legitimacy.

How do I claim the Employee Retention Tax Credit?

Employers can claim the ERTC by reporting their total qualified wages and the related health insurance costs for each quarter on their federal employment tax returns, typically using Form 941.

Who qualifies for the Employee Retention Tax Credit?

Businesses that experienced a significant decline in gross receipts or were subject to full or partial suspension of operations due to government orders related to COVID-19 may qualify for the ERTC. Specific eligibility requirements are outlined by the IRS.

What is the Employee Retention Tax Credit (ERTC)?

The Employee Retention Tax Credit (ERTC) is a refundable tax credit that businesses can claim on qualified wages paid to employees during the COVID-19 pandemic. It was introduced to encourage businesses to keep employees on their payroll despite experiencing economic hardship due to the pandemic.

Can I avoid being audited by the IRS?

Not really. But you can take steps to avoid raising red flags that would trigger an audit.

File your tax returns on time.
Report all your income to avoid discrepancies from other taxpayers.
Only claim the deductions and credits you qualify for.

With all the complicated tax laws, you don't have to find the answers yourself. The best thing you can do for your business is to partner with a trusted team of experienced CPAs who genuinely care for your best interests.

Can I benefit from the Inflation Reduction Act of 2022?

The Inflation Reduction Act was signed into law in August of 2022, offering three tax credits that benefit individuals and small businesses.

These credits are:

The Clean Vehicle Credit, which can be taken for the purchase of new and previously owned clean vehicles.
The Energy Efficient Home Improvement Credit, which offers credits for a variety of specific types of home improvements.
The Residential Clean Energy Credit, which applies to those who have installed various clean sources of energy, such as geothermal, small wind, and solar installations.

Can business expenses be deducted without a receipt?

The answer is, maybe.

The IRS allows businesses to deduct "reasonable and necessary" expenses. The best way to prove your expenses are reasonable and necessary is to keep good records and documentation (i.e., receipts) of all your business expenses.

An experienced CPA can help you determine what expenses are deductible and how to document them best.

What are the penalties for not paying my business taxes?

Paying your business taxes on time is crucial because the late penalties compound each month they are overdue.

The late payment penalty is 0.5% of the unpaid tax for each month or part of a month that the payment is late. The maximum late payment penalty is 25%. In addition to the late payment penalty, you will be responsible for paying interest on any unpaid tax. These figures can add up quickly.

Because of this, it's important to partner with a well-rounded tax advisor who can help your business plan for its tax responsibilities.

What happens if I miss the business income tax deadline?

If your business misses the income tax deadline, you may incur penalties and interest charges on the unpaid tax amount. However, if you miss the April deadline, your business can file for an extension for the October 15 deadline.

What is the business income tax extension deadline?

The extended business income tax deadline is October 15.

When are business income taxes due?

Business income taxes are due on April 15.

Sole Proprietorships and Single-Member LLCs have tax obligations reported on Schedule C (Form 1040 or 1040-SR), due on April 15.

Partnerships and Multi-Member LLCs report taxes using Form 1065. They must also provide Schedule K-1 to partners, due March 15 or the 15th day of the third month after the end of the fiscal year.

Corporations (C Corps) file using Form 1120, typically due on April 15 for corporations on a calendar year. For fiscal year corporations, it's due on the 15th day of the fourth month after the fiscal year's end.

S Corporations file using Form 1120-S, with the same due date as partnerships, March 15, or the 15th day of the third month after the end of their fiscal year.

What are the benefits of hiring a tax advisor for my business?

Professional tax advisory services provide expert guidance on tax matters, helping to navigate complex tax laws, identify tax savings, and ensure compliance. Businesses and individuals benefit from customized advice, reduced risk of errors or non-compliance, and optimized tax strategies.

What is ASC 740?

ASC 740, formerly FAS 109, is a section of the Accounting Standards Codification (ASC) that deals with accounting for income taxes. It provides guidelines on how companies should recognize, measure, present, and disclose income taxes in their financial statements.

What is accounting for income tax?

Accounting for income taxes involves identifying and documenting a company’s income tax obligations and assets.

Managed IT

Are we too big for managed IT?

The size of a business does not typically limit the usefulness of Managed IT Services. Large businesses can benefit from Managed IT due to its scalability.

The Managed IT provider can supplement in-house IT teams by providing specialized expertise, handling routine tasks, or offering additional support during peaks in demand.

Are we too small for managed IT?

Many small businesses will weigh the costs and advantages of hiring an IT person versus a Managed IT Services provider.

Due to our simple, transparent pricing, we have found that many small businesses actually spend less for our services than they would for full-time IT personnel, and they receive a higher and more expansive level of experience and service.

Who is a good candidate for an outsourced managed IT provider?

A good candidate for an outsourced Managed IT provider includes businesses that:

Lack of In-House IT Expertise
Need to Focus on Core Business Functions
Require Scalable IT Solutions
Seek Cost-Effective IT Management
Desire Enhanced Cybersecurity
Must Comply with Regulations
Experience Frequent IT Issues
Plan to Modernize Systems

What industries do you serve with managed IT services?

We work with clients in all types of industries, including but not limited to:

Law Firms
Non-profits
Electricians
Construction
Marketing & Advertising
Sports & Entertainment
Engineering
Professional Services
and more!

Do you offer co-management options?

Our Managed IT Services package provides an all-in-one solution for your business's IT needs. As such, we provide the best value to businesses without an internal IT staff.

If something goes wrong in the middle of the night, can I contact someone?

Yes. Emergency response is available 24/7 and is included in your monthly cost. Schedule a consultation for more details.

What type of managed services pricing model do you use?

We use an "all you can eat" pricing model. You pay one fee that covers everything - including on-site support.

Get started with our Custom Quote Builder.

What type of managed services pricing models are available?

Common pricing models for Managed IT Services include a monthly or annual fixed fee, per-device or per-user pricing, tiered service levels offering different packages, and a la carte pricing for specific services. Each model has different implications for cost predictability and alignment with business needs.

What's the difference between outsourcing and managed services?

Outsourcing generally refers to the transfer of any business process or function to a third party, while managed services specifically involve ongoing management and responsibility for a defined set of services. Managed services are typically proactive and strategic, offering continuous support and improvement.

For more information on IT services, check out How to Select a Reliable IT Services Provider.

What should businesses look for in a managed IT service provider?

Businesses should look for providers with a strong track record of reliability, a clear understanding of their industry's needs, robust security measures, scalability, transparent pricing models, and positive customer reviews. They should also seek providers who offer proactive management and strategic planning services.

What’s included in managed IT services?

Managed IT Services can encompass various solutions, including network and infrastructure management, cybersecurity services, cloud computing, data backup and recovery, help desk support, and software management and support. The scope of services will depend on the specific needs of the business.

What are the benefits of managed IT services?

The benefits of Managed IT Services include cost efficiency, as it reduces the need for in-house IT staff. It also provides businesses with access to a wider range of expertise and the latest technologies, ensures proactive monitoring and maintenance, enhances cybersecurity, and allows internal resources to focus on core business activities.

What are managed IT services?

Managed IT Services refer to the delegation of a company's IT operations and tasks to an external provider, known as a Managed Services Provider (MSP).

This service encompasses a range of IT disciplines designed to alleviate the burden of managing and maintaining complex IT systems internally. The different types of Managed IT Services include:

Remote Monitoring and Management (RMM): Continuous monitoring of IT infrastructure to anticipate and resolve issues before they impact business operations.
Cybersecurity Services: Implementation and oversight of security measures, including firewall management, intrusion detection, and virus and malware protection.
Cloud Computing Services: Management of cloud-based services and infrastructure, such as cloud storage, server hosting, and Software as a Service (SaaS) applications.
Network Installation and Support: Setting up and maintaining network systems, including wireless and wired networks, VPNs, and connectivity solutions.
Data Backup and Disaster Recovery: Ensuring critical business data is regularly backed up and that there are robust systems in place to recover data in the event of loss or damage.
IT Helpdesk and Support: Providing end-users with access to technical support for troubleshooting and resolving hardware or software issues.
Hardware Procurement and Management: Assisting with the selection, purchase, and ongoing management of IT hardware equipment.
Software Licensing and Management: Managing software assets, ensuring that all software licenses are up to date and compliant.
Communications Services: Managing communication technologies like VoIP and unified communications systems.
Consulting and Strategy: Offering expertise to help plan IT strategy aligned with business goals, including technology roadmaps and IT budget planning.

State and Local Tax

Are personal property tax rates the same in every state?

No, personal property tax rates vary widely from state to state and even within local jurisdictions – some states impose higher tax rates, some have assessment ratios, and some even have additional local taxes added to the overall tax rate.

How do I determine the value of my tangible personal property?

The value of tangible personal property is usually determined by taking the original purchase price of the asset and accounting for depreciation over time. Assessing jurisdictions have specific depreciation schedules and methods for calculating useful life and assessed value, which vary across the country.

What types of assets are typically subject to personal property tax?

Personal property tax generally applies to tangible, movable assets used for business purposes. These may include machinery, equipment, furniture, computers, and unlicensed vehicles.

In some jurisdictions, leased equipment or even intangible assets like software might also be subject to personal property tax, but this varies by location.

How often do I need to file a personal property tax return?

States and localities that impose a business personal property tax require businesses to file those returns annually if you meet the minimum threshold of assets. These filings typically list all taxable personal property owned or leased by the business. Deadlines and filing requirements will vary by jurisdiction.

How can I stay compliant with unclaimed property laws?

To stay compliant, maintain accurate policies and procedures, conduct regular internal audits, and follow state-specific reporting guidelines. Seeking expert advice can help navigate complexities and meet all requirements.

What happens if I don't report unclaimed property?

Failing to report unclaimed property can result in penalties, interest, and audits by the State. Compliance goes a long way to ensuring your company avoids these consequences and fulfills your obligation to return assets to their rightful owners.

When should the unclaimed property be reported?

When to report unclaimed property varies by state. Each state has its own deadlines, dormancy periods, and due diligence rules. It's crucial to check specific state requirements to ensure timely and correct reporting.

What are the different types of unclaimed property?

There are dozens of different types of unclaimed property subject to escheatment. These can include uncashed payroll checks, vendor payments, unused credits, unapplied payments, gift cards, refunds, and securities (like stocks and dividends).

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Where should unclaimed property be reported?

Unclaimed property should be reported to the State where the owner's last known address is listed in the company records. If the owner's address is unknown or outside the U.S., report to the State where your company is incorporated. You must report to all applicable states based on these rules, regardless of Nexus.

Are services subject to sales tax?

Whether services are subject to sales tax depends on the state. Some states tax a wide range of services, while others tax very few or none at all. Commonly taxed services include repair, installation, and personal services. Check your state's tax guidelines to determine if the services you offer are taxable.

When do I need to pay use tax?

Use tax is a tax on the use, storage, or consumption of goods and services when sales tax was not collected at the time of purchase. You typically need to pay use tax if you purchase taxable items from out-of-state vendors or online retailers who do not charge sales tax. The use tax rate is usually the same as the sales tax rate in your state or locality.

Which states have no sales tax?

The states that do not impose a state sales tax are Alaska, Delaware, Montana, New Hampshire, and Oregon. However, some local jurisdictions within Alaska may still impose sales taxes.

How do I know what sales tax rate to charge?

The sales tax rate you charge depends on the location where the sale occurs. This includes the state, county, city, and sometimes special district rates. To determine the correct rate, you can use tools like state government websites, sales tax rate lookup services, or tax software that calculates the combined rate based on the delivery address of the goods or services.

How do I know if my business has sales tax nexus in a state?

By conducting a sales tax nexus study, you can pinpoint the states where you have surpassed the nexus thresholds. You will need your physical locations and sales records from previous years to analyze both revenue and transaction numbers per state.

What is Nexus?

Nexus is the connection between a taxpayer and a state, ultimately deciding when the state has the jurisdiction to levy taxes on the taxpayer.

Should I appeal my commercial property tax assessment?

If you believe that your commercial property tax assessment is inaccurately high, you should consider appealing it. Assessments can sometimes be based on outdated information or may not reflect the current market or condition of your property.

Filing an appeal could potentially reduce your tax liability if the assessment is adjusted to a lower value. It's recommended to review the assessment details and consult with a real property expert if necessary, to determine the viability of an appeal.

Do commercial property owners pay property taxes?

Yes, commercial property owners are required to pay property taxes. These taxes are levied on commercial real estate, which includes buildings and land used for business purposes.

The tax is typically based on the assessed value of the property, which is periodically determined by a local or municipal tax assessor.

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Are there opportunities to reduce my business personal property tax liabilities?

Yes.

Unfortunately, most business personal property tax returns are deceptively simple, which often results in companies overpaying tax. There are many things that contribute to inadvertent overpayments, including reporting assets in the wrong categories and reporting assets that have been disposed of but not removed from the books. These issues can be corrected by filing amended returns and working with the taxing jurisdictions to secure refunds.

Our business personal property tax experts can help evaluate opportunities and secure refunds on your behalf. Additionally, we can help appeal current year property tax assessments on the basis of valuation arguments.

What if I don't agree with my real estate assessment? Can I argue that the jurisdiction overvalued my property?

Yes, you can.

Every jurisdiction that values real estate offers an appeals process. The appeals process and timeline varies greatly by jurisdiction. A good practice is to scrutinize every real estate assessment and carefully consider filing appeals to reduce the assessment. If you question whether your real estate assessments are overvalued, we can help to establish the correct value and, depending on the results of this analysis, represent you during the appeals process

If I issue a check to a vendor or an employee and they never cash it, can I just void the check after a period of time?

Unfortunately, no.

Once you issue a check to a person or company, the funds that support the issuing of that check are no longer yours. If a vendor does not cash the check, you are required to attempt to reunite the rightful owner with the funds. If you are unable to locate the rightful owner, then you have to report and remit the funds to the appropriate state as unclaimed property. There are specific laws in each state that govern the steps to locate the rightful owner of the check, as well as when you are required to remit these funds over to the state for safekeeping.

Our unclaimed property experts can help with understanding these requirements and filing responsibilities.

Why is something taxable in one state but exempt in another state?

There are over 7,000 sets of sales and use tax laws in the country. Some states administer their sales tax laws at the state level, with one flat rate that covers both the state and local tax obligations. Other states have allowed the local governments to administer their own local tax rates, including defining what is taxable and what is not. Every state is different as to what is taxable in terms of the purchase of tangible personal property and various services. There are exemptions in the manufacturing, pharmaceutical, agricultural, nonprofit, governmental, and construction industries that vary greatly from state to state. So, if your business sells and purchases goods and services in different jurisdictions across the country, it is important to understand not only if you have nexus in these jurisdictions, but what is taxable and what is exempt.

Depending on the state’s statutes and regulations, as well as, the materiality of the transactions, we suggest that you consider investing in a sales and use tax software tool and/or consult with a state & local tax expert to assist in navigating state specific statutes and regulations, so that you are paying taxes correctly.

Am I required to register in a state for sales and use tax if I only have sales in that state?

It depends on the amount of sales and number of transactions.

Before 2018, a taxpayer was only required to register for sales and use taxes if it had a physical presence in the state. Generally, a physical presence was established by having people or property in the state on a regular and systematic basis. As a result, true remote sellers did not have a sales and use tax registration requirement. In 2018, the Supreme Court ruled in South Dakota v. Wayfair, Inc., 585 U.S, a mere economic presence was enough to establish a sales and use registration and collection responsibility. The Court did not provide guidance on the exact economic thresholds that need to be met to cause a registration and collection responsibility. Instead, it ruled that South Dakota’s threshold of $100,000 in annual sales or 200 individual transactions in a year was reasonable. As a result, each state has developed its own economic nexus thresholds.

Therefore, we strongly suggest working with a state & local tax expert to review these requirements on a state-by-state basis to ensure proper registration steps are taken to be in compliance.

What are business licenses and gross receipts?

Many local jurisdictions require companies to register for a business license, and these local business license requirements are often overlooked. The fees associated with local business license registrations and renewals range from a nominal fee to a fee based on gross receipts.

What is unclaimed property?

Unclaimed property refers to assets or funds that have been abandoned for a specific period. Examples include uncashed checks, open accounts receivable credits, forgotten bank accounts, and unused gift certificates.

What is the difference between sales tax and use tax?

Sales tax is a tax imposed on the sale, transfer, or exchange of goods and services. It is typically calculated as a percentage of the purchase price and included in the final cost for the end user or ultimate customer.

The sales tax rate varies depending on the location, with individual states and jurisdictions setting their own rates. In the United States, sales tax is not imposed at the federal level but is rather a state and local tax.

Use tax is a tax imposed on the use, storage, or consumption of goods and services acquired without paying sales tax. The rate often mirrors sales tax and is typically enforced by the state or jurisdiction where the goods or services are used.

The purpose of use tax is to ensure that individuals who purchase goods and services from out-of-state vendors or online retailers contribute the same tax amount as if they made the purchase locally.

Is real property tax the same as real estate tax?

Yes, real property tax is essentially the same as real estate tax. Both terms are used interchangeably to describe the tax levied on land and any structures permanently attached to the land, such as buildings or offices.

What is real property tax?

Real property tax is a tax on real estate, including land and structures. It is typically calculated based on the property's assessed value, determined by local government assessors.

What states have personal property tax?

Most states impose a business personal property tax. However, 12 states don’t tax businesses’ personal property. Those include:

Delaware
Hawaii
Illinois
Iowa
Minnesota
New Hampshire
New Jersey
New York
North Dakota
Ohio
Pennsylvania
South Dakota

What is personal property tax?

Personal property tax is a tax on movable assets, including machinery, equipment, vehicles, and sometimes intangible assets. Unlike real property tax, which is for immovable property like land and buildings, personal property tax applies to assets not permanently affixed to a particular location.

What are state and local taxes?

State and local taxes refer to the various taxes imposed on businesses by individual state governments and local municipalities in the United States. These taxes are in addition to federal taxes and vary significantly from state to state and locality to locality. There are over 10,000 taxing jurisdictions in the United States.

Workiva Solutions

What is the Workiva implementation process like?

Most companies choose to work with an implementation partner through Workiva’s vast network of partners. When you choose to partner with Clearview for your implementation, you can expect the following process:

The Solution Architects will design and develop the functional solution within the Workiva platform.
The Engagement Lead will perform the day-to-day delivery of your implementation project.
The Project Manager will track the scope, timeline, and overall status of the implementation.
The Partner will oversee the relationship with the company and be accountable for the overall satisfaction of the implementation.

What are the critical features of Workiva?

Critical features of Workiva include its centralized data management, integrated reporting capabilities, collaborative workspaces, and versatile reporting templates. Additionally, its strong security measures and ability to handle large volumes of data make it a comprehensive solution for business reporting needs.

What is Workiva used for?

Workiva is used for streamlining complex financial, regulatory, and compliance reporting. Workiva offers solutions for:

Annual and Interim Financial Reporting
Banking
Board Report Creation
Capital Market Transactions
Energy and Utilities
Enterprise Risk Management
ESEF Reporting
ESG Reporting
FERD Reporting
Financial Close Reporting
Financial Statement Automation
GRC
Government
Higher Education
Insurance
Internal Audit Management
Internal Controls Management
Investment Reporting
Initial Public Offering
IT Risk and Compliance
Management Reporting
Operational Risk Management
Policy management
Product Line and Business Unit Reporting
SEC Reporting
SEDAR Reporting
SOX Compliance
Statutory Reporting
Tax Reporting
Transfer Pricing
XBRL and iXBRL

Who uses Workiva?

Workiva is used by a wide range of organizations across various industries for its robust data management, reporting, and compliance capabilities. Its users include:

Publicly traded Companies
Private Companies
Government Entities
Educational Institutions
Financial Institutions

What is Workiva?

Workiva is a cloud-based software platform that streamlines complex financial, regulatory, and compliance reporting.

Frequently Asked Questions

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