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DIGITAL CPA WEBCAST SERIES: SALES AND USE TAX: WHAT YOUR FIRM NEEDS TO KNOW May 26, 2016
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Sales and Use Tax: What your Firm Needs to Know

Jan 08, 2017

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Page 1: 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

Page 2: Sales and Use Tax: What your Firm Needs to Know

Agenda Opportunity in the Sales and Use Tax Niche

Top 3 Things Trusted Advisors Need to Know

What to do Next

Page 3: Sales and Use Tax: What your Firm Needs to Know

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

Page 4: Sales and Use Tax: What your Firm Needs to Know

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

Page 5: Sales and Use Tax: What your Firm Needs to Know

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

Page 6: Sales and Use Tax: What your Firm Needs to Know

OPPORTUNITY IN THE SALES AND USE TAX NICHE

Page 7: Sales and Use Tax: What your Firm Needs to Know

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

Page 8: Sales and Use Tax: What your Firm Needs to Know

Drivers Behind Automation & Compliance Support

BUDGET SHORTFALLS

=MORE PRESSURE FOR

TAX REVENUE

Greater chance of audit for your clients

Confidential. All Rights Reserved.

Page 9: Sales and Use Tax: What your Firm Needs to Know

Under-Collecting

Page 10: Sales and Use Tax: What your Firm Needs to Know

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

Page 11: Sales and Use Tax: What your Firm Needs to Know

TOP 3 THINGS TRUSTED ADVISORS NEED TO KNOW

Page 12: Sales and Use Tax: What your Firm Needs to Know

Nexus

Page 13: Sales and Use Tax: What your Firm Needs to Know

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

Page 14: Sales and Use Tax: What your Firm Needs to Know
Page 15: Sales and Use Tax: What your Firm Needs to Know

Let's Go to Court

Page 16: Sales and Use Tax: What your Firm Needs to Know

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

Samantha Mansfield
in the prep meeting Andy mentioned cases on AL and ND. Should we add these in here for topics now?
Page 17: Sales and Use Tax: What your Firm Needs to Know
Page 18: Sales and Use Tax: What your Firm Needs to Know

What Creates Nexus?

Page 19: Sales and Use Tax: What your Firm Needs to Know

Obvious

Page 20: Sales and Use Tax: What your Firm Needs to Know

Obvious

Page 21: Sales and Use Tax: What your Firm Needs to Know

Less Obvious

Page 22: Sales and Use Tax: What your Firm Needs to Know

Less Obvious

Page 23: Sales and Use Tax: What your Firm Needs to Know

Less Obvious

Page 24: Sales and Use Tax: What your Firm Needs to Know

Less Obvious

Page 25: Sales and Use Tax: What your Firm Needs to Know

Trade Shows

Page 26: Sales and Use Tax: What your Firm Needs to Know

Downloaded Software

Creates Nexus?

Page 27: Sales and Use Tax: What your Firm Needs to Know

Challenge to Quill

● Alabama○ Effec. January 1, 2016○ Sales More Than $250K

● South Dakota○ Effec. May 1, 2016○ 200 Transactions or More Than $100K

Page 28: Sales and Use Tax: What your Firm Needs to Know

But What’s My Real Risk Of Being Found?

Page 29: Sales and Use Tax: What your Firm Needs to Know

● Auditing your customers

● Information sharing with other states and the IRS

● Special task forces

● Leadso Former employeeso Competitors

How do states find you?

Page 30: Sales and Use Tax: What your Firm Needs to Know

THE PROBLEM NEVER GOES AWAY…

IT ONLY GETS

BIGGER

Page 31: Sales and Use Tax: What your Firm Needs to Know

2. Taxability

Page 32: Sales and Use Tax: What your Firm Needs to Know

● 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.

Page 33: Sales and Use Tax: What your Firm Needs to Know

Fundamentals

Page 34: Sales and Use Tax: What your Firm Needs to Know

Taxable By Default

Tangible Personal Property (TPP)

Page 35: Sales and Use Tax: What your Firm Needs to Know

Not Taxable By Default

Page 36: Sales and Use Tax: What your Firm Needs to Know

Fundamentals

● What about digital products?

● Bundling of TPP and Service?

Page 37: Sales and Use Tax: What your Firm Needs to Know

Tax Rates

Page 38: Sales and Use Tax: What your Firm Needs to Know

3. Exemption Certificates

Page 39: Sales and Use Tax: What your Firm Needs to Know

Exemption Certificates Are Low-Hanging Fruit

Page 40: Sales and Use Tax: What your Firm Needs to Know
Page 41: Sales and Use Tax: What your Firm Needs to Know

Annual Review

Page 42: Sales and Use Tax: What your Firm Needs to Know

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Three Things to Know How Nexus is Created

Taxability

Exemptions

Page 43: Sales and Use Tax: What your Firm Needs to Know

WHAT TO DO NEXT

Page 44: Sales and Use Tax: What your Firm Needs to Know

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

Page 45: Sales and Use Tax: What your Firm Needs to Know
Page 46: Sales and Use Tax: What your Firm Needs to Know

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

Page 47: Sales and Use Tax: What your Firm Needs to Know

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.

Mansfield, Samantha
remove branding and just talk through technology is a way to make it happen.
Page 48: Sales and Use Tax: What your Firm Needs to Know

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.

Page 49: Sales and Use Tax: What your Firm Needs to Know

Sales Tax Automation Program

Confidential. All Rights Reserved.

FIRM REFERRAL PROGRAM

FIRM ADVISOR PROGRAM

Two Options to Expand Your Trusted Advisor Role

Page 50: Sales and Use Tax: What your Firm Needs to Know

Erik AsgeirssonPresident & CEO, CPA.com

Andrew Johnson, CPA Managing Partner, Peisner Johnson

DISCUSSION AND PARTICIPANT QUESTIONS

Page 51: Sales and Use Tax: What your Firm Needs to Know

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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

Page 52: Sales and Use Tax: What your Firm Needs to Know

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

Page 53: Sales and Use Tax: What your Firm Needs to Know
Page 54: Sales and Use Tax: What your Firm Needs to Know

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Thank you!#DigitalCPA