How To Choose The Right Excise Tax and Compliance Partner In 2022
By Michael Adrian
Companies selling cannabis-derived and
nicotine-based products are turning to partners
for help when navigating complex regulations.
With each new year comes new opportunities and new challenges. This is
especially true for 2022 as jurisdictions
large and small across the United States
prepare to enforce recently enacted
legislation like the PACT Act, new excise
tax rules, and more.
Yes, it can be challenging keeping up with
all of the new and changing regulations.
But you don’t have to do it alone! There
are a couple of compliance partners
to choose from who can benefit you
and your business both now and in the
future. To some, this may appear to
be a daunting task. That’s why we put
together this guide to help you get started.
Follow the money.
The fastest way to get caught in a non-compliance trap is by not paying your taxes.
As long as you are paying your taxes on
time and accurately, you will often find
some flexibility in other non-compliance
situations. Start by acquiring the licensing
necessary to collect sales and excise taxes
from your buyers to help protect your
margins. Then ensure you have a way of
accurately calculating and collecting those
taxes on all of your orders. Finally, find an
efficient, repeatable method for producing
your tax reports and remitting payments.
Usually, outsourcing all or part of this to
your compliance partner(s) makes this
easy, so long as they are reliable.
Get your papers in order.
Anytime reporting is required to a government agency, the reporting needsto be timely, accurate, and comprehensive.
While this includes the tax reports
previously mentioned, it also includes
any other reporting required by law,
like the monthly ATF PACT Act reports
for vaporizer products. Whether you are
in wholesale or retail, if you are selling
vaporizers or any component related to
them, you likely need to report to just
about every state you are selling into.
Since this reporting is required to be
completed each month at the beginning
of the month, it can quickly take much of
your time and it is easy to fall behind or
off track. Save that time and stay current
by outsourcing it to your compliance
partner(s).
Mind the gaps.
Licenses, taxes, and reports are critical
components for operating in compliance,
but there is more to it than that. For
vape and hemp-based products, there are
other requirements to consider, like age
verification (for retailers) and packaging
(for manufacturers and wholesalers).
Make sure you have the appropriate people,
partners, processes and more to comply
with these regulations as well.
Your time is valuable and limited, so
you’ll want to partner with as few
vendors as necessary to meet your
compliance needs
Less [vendors] is more [value].
Working with a partner takes time, especially if the partnership is to succeed
long-term. Your time is valuable and
limited, so you’ll want to partner with
as few vendors as necessary to meet your
compliance needs. Why? So you can
spend less time scheduling and participating in meetings! Also, the more compliance solutions your partner(s) can
provide, the more expertise they will have
in supporting you. And most businesses
offer discounts for bundling their services
together, so you also get the most bang
for your buck.
Already have a partner and it isn’t working out? It’s ok, you’re allowed to “break
up” and “start dating someone new.” Are
you behind on your reports? Speak with
potential partners not only about how
they can help you going forward, but
how they can help you catch up as well.
Haven’t started yet? That’s ok too! It’s
better late than never, and 2022 is a great
time to get started.
When researching potential partners,
it’s important that you do your due
diligence. The more information you
provide them, the better conversation
you will have, which can help you be
successful in the partnership early and
often. To help you get started, here is a
quick breakdown of the top three businesses offering compliance solutions to
the vape and hemp-based products industries.
Now is the time to get compliant. Make
it your New Year’s resolution for 2022
and use this guide to identify the best
partner for you.
www.TokenOfTrust.com