Key takeaways
- Post-Wayfair complexity creates new opportunities: As sales tax rules grow more complicated, accounting firms can expand into high-value advisory services like nexus analysis, VDAs, and product taxability guidance.
- Data-driven insights drive growth: Running nexus studies and compliance scoring helps firms identify risk areas, tailor services, and build recurring revenue streams.
- Proactive compliance builds trust and profit: Offering ongoing monitoring, audit defense, and reconciliation services protects clients from penalties while strengthening long-term client relationships.
In short: Accounting practices can grow by offering sales and use tax (SUT) advisory add-ons. Since the 2018 South Dakota v. Wayfair ruling, economic nexus has made compliance harder for remote sellers. Eight add-ons include state tax registration, VDA support, product taxability guidance, tax technology consulting, compliance management, audit defense, reverse audits and ongoing issue management.
One of the great things about running an accounting practice is the nearly endless ways you can expand your services. This is especially true in today's post-Wayfair world. Businesses now face much more sales and use tax complexity. Complexity brings uncertainty, and for you, that means opportunity. Firms can also see how Taxually works with accounting firms.
Quick Refresher: Post-Wayfair World
South Dakota v. Wayfair is the June 21, 2018, Supreme Court ruling that deemed the physical presence rule “unsound & incorrect.” The ruling enables economic nexus and affects all remote sellers. Physical presence also still applies, which makes compliance even harder. Add today's work-from-anywhere world, and it's no wonder business owners want guidance.
If you want your accounting practice to scale and stay sustainable, you need to future-proof your firm. Most of your clients need help understanding why and how economic nexus affects their business. They also need support when issues come up. So you have lots of room to grow if you get creative with your service add-ons.
First Things First: Time for Some Risk Analysis
Before you expand your services, do some legwork to find your best growth opportunities. How? If you already use LumaTax, use our tool to quickly and easily run nexus surveys on all your clients. LumaTax then scores each client based on their estimated risk.
We call this the LumaTax Compliance Score. If a client has a low score, upload their historical transaction data. LumaTax will generate an in-depth nexus analysis report in minutes. It gives you a state-by-state deliverable showing physical and economic exposure dates, amounts and other details. Not a LumaTax user yet? Request a free demo.
A nexus study opens up a menu of add-on services. You can offer them to clients as they work through their sales tax obligations. Let's go through each one.
What are the 8 SUT advisory add-ons your practice can offer?
- State Tax Registration Services
A state tax registration service helps clients register in states where they have triggered nexus but are not yet collecting and remitting tax. Your nexus analysis shows you these states. This service adds value for clients without much extra work for you. Many business owners will gladly pay to get this chore off their plate.
- Voluntary Disclosure Agreement Support
Some states offer a Voluntary Disclosure Agreement, or VDA. A VDA lets eligible taxpayers who owe back taxes, and haven't filed the related returns, avoid monetary penalties and possible criminal charges. Where available, it is an excellent tool for CPAs. You can approach a state anonymously on your client's behalf to settle past tax liabilities and secure penalty waivers.
You can explain the benefits of VDAs to clients and help with the paperwork, or fill it out for them, in relevant states. This is another great add-on for your practice. A word of caution, though. Each state has different VDA program requirements and nuances, so learn them before you file for a client. Also, protect your client's anonymity until the state(s) and your client reach an agreement.
- Product Taxability Guidance
Product taxability guidance turns your SUT knowledge into a paid service. You know how complex sales and use tax legislation is, but many of your clients don't. As an add-on, you can advise business owners on how different products and services are taxed. Share which states do or don't tax a product or service, offer lookup resources, explain nuanced rules and answer questions as they arise.
- Tax Technology Consulting
Tax technology consulting helps clients choose the right software. Business owners have many software options for running their operations. It's hard to pick the best platform when they all look similar on the surface, especially for clients unsure of what they need. Many read a couple of reviews and make a fairly blind choice. They end up with a system that doesn't support their business well.
Offering tax technology consulting as an add-on can add value while boosting profits. Your team can learn what clients want to achieve, then recommend the tools that best meet their needs. If you already have a few favorite tools, you could set up a referral agreement with those companies. That lets you collect a referral fee or pass on a discount for bringing new clients to the platform.
- Tax Compliance Management
Tax compliance management builds on the risk assessment process covered earlier. Once you run an initial nexus study, it's easy to repeat it. This shows where clients stand for the year against nexus thresholds in each state. Run a monthly or quarterly report refresh, and charge a fee for this service. - Audit Defense Services
Audit defense services guarantee a business will have support if a state ever audits it. This security blanket raises your average bill and helps clients feel safe in your hands. It usually covers responding to audit notices for your client and providing audit representatives. It also covers defending returns in audit hearings and helping clients resolve tax debt. Charge a one-time annual fee or include it in your monthly bill. - Reverse Audit Analysis
Reverse audit analysis helps clients recover overpaid tax. Underpayment of taxes is common, but complex legislation can also lead to overpayments. With reverse audit services, your firm reviews all tax payments and finds chances to recoup overpaid funds. You can offer this service monthly, quarterly or annually. - Ongoing Issue Management and Reconciliation
With constant changes in legislation, your clients will hit tax compliance hurdles from time to time. To ease their worries, consider offering a 'peace of mind' security plan. Your firm commits a set number of guaranteed hours each month to troubleshooting and resolving any issues your client faces.
Once you choose your add-ons, you can specialize them further by industry. After running nexus studies on your clients, combine the data to see which industries face the most risk of audits and penalties.
Once you've found your biggest areas of opportunity, create educational content and services for those industries. At LumaTax, we've seen many opportunities among e-commerce sellers, marketplace facilitators and SaaS companies.
How can you proactively protect clients and boost profits?
You can protect clients and boost profits by staying on top of economic nexus issues. Insights from economic nexus data with a physical presence overlay show a clear trend. Time and again, we've seen the huge value of being proactive.
So it's wise to track your clients' economic thresholds every month or quarter. Building your practice around rich transaction data opens up many future paid services. It gives your clients much better protection and helps grow your annual revenue. Not already using LumaTax to simplify the process? Request a free demo today.
How Taxually handles this
Taxually’s LumaTax runs a nexus analysis on your sales, helps you register in the states where you must collect, and prepares and files multi-state sales tax returns, including Canadian GST/HST. LumaTax is currently available to enterprises and accounting firms. For the full workflow, read how to automate US sales tax filing in every state.
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Frequently asked questions
How did the Wayfair ruling change sales and use tax compliance?
The South Dakota v. Wayfair decision ended the physical-presence rule and introduced economic nexus, meaning remote sellers can owe tax in states where they exceed sales or transaction thresholds — even without a physical location.
Why should accounting firms expand their sales tax advisory services?
Post-Wayfair complexity has left many businesses uncertain about their obligations. Firms that offer services like nexus studies, VDAs, and tax registration support can help clients stay compliant while generating new revenue streams.
What are some high-value add-on services firms can offer?
Common add-ons include tax technology consulting, audit defense, reverse audit analysis, and ongoing compliance monitoring — all of which help clients manage risk and strengthen long-term relationships.
