Sales and Use Tax: What your Firm Needs to Know
Transcript of Sales and Use Tax: What your Firm Needs to Know
DIGITAL CPA WEBCAST SERIES:
SALES AND USE TAX: WHAT YOUR FIRM NEEDS TO KNOWMay 26, 2016
Agenda Opportunity in the Sales and Use Tax Niche
Top 3 Things Trusted Advisors Need to Know
What to do Next
CPA.com, an AICPA company• Empowering CPAs and Businesses for the Digital Age
Erik Asgeirsson, President and CEO, CPA.com• Industry leader with over 20 years of experience leading
technology organizations• Consistently recognized as one of Accounting Today’s
“Top 100 Most Influential People”• BS Electrical Engineering, George Washington
University, and MBA in Finance, NYU Stern School of Business
Host
Guest Panelist
Andrew Johnson, CPAManaging Partner, Peisner Johnson
• Co-founded Peisner Johnson & Company in 1992• Experienced professional in state and local tax matters• Consulted hundreds of companies in virtually every
industry nationwide• Member of AICPA and Texas Society of CPAs• Master’s degree in accounting with emphasis in taxation
from Brigham Young University
Vishal Thakkar, Marketing Director, CPA.com
• Marketing Director, CPA.com• Helps lead the strategic marketing planning and development at
CPA.com• Over 15 years of direct and digital marketing experience in B2B
verticals including media and trade organizations• MBA, Marketing, College of William and Mary, VA
Guest Panelist
OPPORTUNITY IN THE SALES AND USE TAX NICHE
EMERGINGESTABLISHED
SALT Compliance
HR Reporting& Compliance
Financial Planning & Financing
Budgeting & Forecasting
Cloud Accounting
Traditional Tax Services
Bill Payment
Vertical Add Ons
Payroll
Expense Mgt
New BPO – Client Accounting Services
Drivers Behind Automation & Compliance Support
BUDGET SHORTFALLS
=MORE PRESSURE FOR
TAX REVENUE
Greater chance of audit for your clients
Confidential. All Rights Reserved.
Under-Collecting
The Greatest Tragedy in Sales Tax
Paying tax, plus penalty and interest, out of your own pocket that you could have collected at the time of the transaction.
Common Mistake
TOP 3 THINGS TRUSTED ADVISORS NEED TO KNOW
Nexus
1. What is nexus?
Nexus: A connection; a link or tieMinimum level of physical presence that allows a jurisdiction to require you to register, collect, and remit sales and use tax
Let's Go to Court
Quill Corporation v. North Dakota, 112 S.Ct. 1912 (1992)
For sales and use tax purposes, the Supreme Court held that a taxpayer must have MORE than the “Slightest” physical presence in the state.
Scripto v. Carson, 362 US 207 (1960)
Tyler Pipe v. Wash. Dept. of Rev., 483 US 232 (1987)
Court Cases
What Creates Nexus?
Obvious
Obvious
Less Obvious
Less Obvious
Less Obvious
Less Obvious
Trade Shows
Downloaded Software
Creates Nexus?
Challenge to Quill
● Alabama○ Effec. January 1, 2016○ Sales More Than $250K
● South Dakota○ Effec. May 1, 2016○ 200 Transactions or More Than $100K
But What’s My Real Risk Of Being Found?
● Auditing your customers
● Information sharing with other states and the IRS
● Special task forces
● Leadso Former employeeso Competitors
How do states find you?
THE PROBLEM NEVER GOES AWAY…
IT ONLY GETS
BIGGER
2. Taxability
● Things that are taxable in one jurisdiction may not be taxable in another…
● Except when it is.
● Rules are constantly changing - many changes each year.
Fundamentals
Taxable By Default
Tangible Personal Property (TPP)
Not Taxable By Default
Fundamentals
● What about digital products?
● Bundling of TPP and Service?
Tax Rates
3. Exemption Certificates
Exemption Certificates Are Low-Hanging Fruit
Annual Review
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Three Things to Know How Nexus is Created
Taxability
Exemptions
WHAT TO DO NEXT
What Next?Think About Your
ClientsWhat do they sell?
Where do they have Nexus?Are they billing the correct tax?
What about exemption certificates?
They (you) may be at risk
Sales & Use Tax Transactional PlatformAccountant Console• Management• Dashboard • Resources
ConfigurationTax Rates
CalculationsExemptions
Returns GenerationReporting Dashboard
Tax Engine
Direct IntegrationAccounting Package/ Ecommerce Platform
Returns Reports
CPA ADVISORY SERVICES:• Nexus Studies• State and Jurisdiction Registrations• Exemption Certificate Management• Audit Management• Refund Review
SUPPORTS TAX COMPLEXITIES:• More than 10,000 jurisdictions• Thousands of tax rates• Hundreds of monthly rate changes • Multiple payment options
Sales Tax Automation Program
CPA Firm & Clients
• Sales and use tax is a complex area. • States differ in their rules, rates,
exemptions and exceptions.
• The Sales Tax Automation Program is a cloud-based solution that provides the data and the detailed tax decisions and taxability information rates for you.
• It takes the compliance complexity away from having to research every single jurisdiction – which saves you (and your clients) time and money.
• Nearly any client who has a company – no matter their service – can benefit.
Key Features of the Sales Tax Automation ProgramCALCULATIONS AND RETURNS IN ONE SOLUTIONPerform tax calculations and generate signature-ready PDF returns in one solution.
CONSUMER USE TAXCalculate consumer use tax and file your consumer use tax returns.
EXEMPTION CERTIFICATE MANAGEMENTStore, update, and maintain exemption certificates.
RATE FILESDownload rate files by state or upload addresses for your specific business needs and access tax rate files.
RETURNS ONLY OFFERINGUpload tax data files from any data source and generate signature-ready PDF returns. Access analytics to determine if your tax calculations are accurate.
Sales Tax Automation Program
Confidential. All Rights Reserved.
FIRM REFERRAL PROGRAM
FIRM ADVISOR PROGRAM
Two Options to Expand Your Trusted Advisor Role
Erik AsgeirssonPresident & CEO, CPA.com
Andrew Johnson, CPA Managing Partner, Peisner Johnson
DISCUSSION AND PARTICIPANT QUESTIONS
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Resources“The Time is Right for Sales and Use Tax Automation”o White paper o CPA.com/SalesTax
Follow us on Twittero @CPAcomo #DigitalCPAo @VertexSMBo @AndyJohnsonCPA
Sales Tax Automation Programo Accountant Consoleo Advisor and Referral
optionso Vertex SMB, a preferred
partner of CPA.com
PeisnerJohnson.como Webinarso SALTsource newslettero Blogo Charts and white papers
CPA Firm & Clients
Digital CPA Webcast Series – Building a community of digital CPAs who embrace change and the transformational effects of technology on today’s practice
• Will Your Firm Thrive or Just Survive? The Critical Competency for Today’s PractitionerJuly 20, 2016
• How the Cloud Impacts Modern Day Financials
September 20, 2016
• “Taking the Lead” in Las VegasDecember 5-7, 2016
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Thank you!#DigitalCPA