Client
A Leading Global Food Manufacturing Company
Industry
Food Manufacturing
Project Timeframe
June 2022 - Current
Revenew Services
Sales Tax & Use Recovery
Project Scope
Our client is a large multinational company with $50 billion in US revenue alone. It operates in 34 states, each of which has its own unique sales tax laws and regulations. Because of its size and the number of tax consultants it had already engaged, our client felt confident that its tax filings were being carried out correctly. To validate its work thus far, the client engaged Revenew for its Sales Tax and Use Recovery Services on a no-risk contingency model, expecting to only find about a couple million in potential refunds, if anything.
Revenew’s Approach
In June 2022, Revenew began the auditing process for the client’s operations.
- The team first conducted a thorough review of the client’s data for its operations in a couple of states, at the client’s request.
- The team extracted the data for the previous three years, including purchase orders, accounts payable data, and tax accrual data.
- With all the necessary data, Revenew began the reconciliation process, comparing invoices to what was filed.
- In addition, food manufacturing companies typically have a high infrastructure spend for equipment and supplies to be able to produce the goods, and states commonly give manufacturers large sales tax breaks to incentivize them to do business in a specific state. Recent changes to state laws in the last 2-3 years have also resulted in even more available incentives.
- The client had not previously been aware of many of these rules, while the Revenew team had deep familiarity with these laws and updates across many states.
- The team dove deeper into the legal side of the client’s refund, pushing the envelope in gray or ambiguous areas to achieve more favorable outcomes for the client.
Outcomes
Based on the audit in the first state, Revenew identified a high incidence of overpaid sales tax. After an initial presentation of the team’s audit findings, the client quickly expanded Revenew’s scope of work to provide Sales Tax and Use Recovery services in several other states.
The claim submitted to the first state came back with a 100% approval rate for the client’s refund, and similar trends followed across the seven remaining states. All in all, Revenew found nearly $40 million in potential recoveries for the client and worked quickly to file for it—as the statute of limitations meant that every month that elapsed represented at least a million dollars lost.