What it is
Recurring sales tax returns rely on the client’s data and on its exemption records. The engagement letter should say which jurisdictions are covered and where the firm’s work stops.
This letter sets the filing scope by jurisdiction, what is separate (nexus work and audits), the client’s duties and the fees.
When to use it
- When taking on monthly or quarterly sales tax returns.
- When a client begins to sell in new states.
- When separating compliance from nexus work.
What’s inside
- Jurisdiction table with account numbers and frequency
- Service table showing what is in or out of scope
- Client duties on data, certificates and funding
- Basis and limits paragraph, fees and signature block
Standard cited
This template follows State sales tax. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use.
Questions
Does the firm decide where the client must file?
Not unless a nexus review is in scope. The letter says the firm does not decide it otherwise.
Who keeps exemption certificates?
The client. The firm may sample them but it does not give a legal opinion.
What about notices?
Routine notices are in scope when marked. Representation in an audit is a separate engagement.
Related templates
- Sales Tax Nexus Matrix (Excel)
- Tax Return Preparation Engagement Letter
- Engagement Scope Change Letter (Addendum)
- IRS or State Notice Response Engagement Letter
Last updated 11/06/2026. All free templates.