How familiar are you with AP best practices, rules, and regulations? Here's a question on sales and use taxes: Are there any use tax implications if you move a taxable item from one tax jurisdiction to another that has a higher tax rate?
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Ferguson should not do anything. Once the item is paid for it is not the responsibility of the AP department to track where equipment gets moved to after the initial purchase and delivery/installation.
MMUELLER on December 16
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Thanks for your comment. We assume here that AP has the responsibility. In any event, the company is liable for the difference to State B.
ADZAMBA on December 18
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Tracking this movement would be near impossible for A/P and also for State B. Pay what is due when and if this is found in an audit by State B.
KBRANDT on December 18
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The purpose of this question was to illustrate the concept and what a company is legally obligated to do. Of course, the decision to implement a policy to comply is up to each company depending on its own facts and circumstances. We can not endorse a policy of not doing anything in the hopes of not getting caught. When the states or the feds get wind of noncompliance, you can get a feeding frenzy--it's happening with unclaimed property (state), nonresident alien payments and employee expense reports (IRS), etc. etc. Now, I'm not saying this issue is on a par with those, but keep in mind that if the potential exposure is material, you'd not only have to worry about the government, but your internal and external auditors as well.
ADZAMBA on December 18
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We have a fixed asset department who is responsible for tracking the movement of assets and for determining the taxability of each move.
WSMITH on December 21
