sales and use tax compliance for the quickbooks user · sales and use tax compliance for the...
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Sales and Use Tax Compliance for the QuickBooks® User
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This manual was created for online viewing. State specific information in this manual is used for illustration and is an example only.
mail: P.O. Box 509 Eau Claire, WI 54702-0509 • telephone: 866-352-9539 • fax: 715-802-1131email: [email protected] • website: www.lorman.com • seminar id: 403982
Matthew Hammond Avalara
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mail: P.O. Box 509 Eau Claire, WI 54702-0509 • telephone: 866-352-9539 • fax: 715-802-1131email: [email protected] • website: www.lorman.com • seminar id: 403982
Prepared By:Matthew Hammond
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Matthew Hammond
National Sales Manager(919‐627‐9784)
Get compliant with sales tax in 2018!
Integrated
600+ integrations into ERP, POS, ecommerce, billing,
and CRM systems
Efficient
Born and managed in the cloud: real‐time updates to sales tax rules and rates
Accurate
End‐to‐end tax compliance solution: calculation, tax document management, and returns
(c) 2014 Tax Technology Group, Inc.
Learning Objectives
Why should I care about sales & use taxes?
What technology solutions are available to assist?
Which type of solution is right for my organization?
What can I do to ensure a technology project is successful?
Q&A
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Sales & Use Tax Overview
©Avalara. Confidential and proprietary. 4
Your company is responsible for collecting & remitting sales tax on behalf of it’s customers for taxable sales.
Over 12,000 taxing jurisdictions in the United States.
Exceptions:
•Product / service‐based statutory exemptions.
•Customer‐based exemptions (exemption certificates).
•Taxability exemptions vary by state.
Key transaction inputs:
•WHO ‐ Customer (determination of customer‐based exemptions).
•WHEN ‐ Invoice date (tax rate determination).
•WHERE ‐ Ship‐to, ship‐from, order acceptance addresses (taxing authority, or “sourcing”).
•WHAT ‐ Product / service (determination of product‐based exemptions).
Nexus – where should you be collecting sales tax?
Calculation and Reporting
Product and Service Taxability
Jurisdictional Rate Assignment
Exemption Certificate Management
Sales Tax Returns
What are the Elements of Your Compliance Profile?
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A G ROW ING L I S T
NEXUS‐CREATING ACTIVITIESNEXUS‐CREATING ACTIVITIES
Affiliates
Trade shows
Commissions to resellers
Investors / board meetings
Marketing / web advertising
Drop shipments
Multistate locations
Affiliates
Trade shows
Commissions to resellers
Investors / board meetings
Marketing / web advertising
Drop shipments
Multistate locations
Maintenance / service / repairs
Owned / leased real property
Hosted data centers
Field sales / service staff
Licenses / royalties / fees
Direct / online sales
Inventory
Maintenance / service / repairs
Owned / leased real property
Hosted data centers
Field sales / service staff
Licenses / royalties / fees
Direct / online sales
Inventory
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7©Avalara. Confidential and proprietary.
Why is sales tax management so hard?
Content Changes
Transactions
Government Filings
Records
Rate / Jurisdictional Changes
Business Processes
Multiple Systems
Filings & Deadlines
Payments and Receipts
Collections
Real‐Time Requirements
Immediate Determination
24/7/365 accuracy required
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©Avalara. Confidential and proprietary.
Understanding sourcing rules – “situs”
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Origin‐based states for products (destination‐based for services)
Arizona, Illinois, Missouri, New Mexico, Ohio, Pennsylvania, Tennessee, Utah, Virginia
Mixed source states
California Counties are origin‐based; Cities &
STJs are destination‐based Services are always destination‐
based
Texas Cities and counties are origin‐based
based; STJs are destination‐based Some services are destination‐
based
Destination‐based states
All the Rest
©Avalara. Confidential and proprietary.
ZIP Codes: The Wrong Tool for the Job
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Taxing jurisdictions don’t always follow ZIP Codes!
Individual counties and municipalities levy sales taxes in addition to state rates
Tax rates can vary significantly within a ZIP code
ZIP codes Are a blunt instrument for determining sales tax rates and boundaries
Will almost certainly lead to calculation mistakes.
Can lull you into a false sense of security
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©Avalara. Confidential and proprietary. 11
What Does This Mean for the Amazon FBA Merchant Seller?
Amazon FBA States
Means state has no sales tax
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©Avalara. Confidential and proprietary. 12
Thank you for using Avalara! What did you do en route to the office today?
• Bought a coffee
• Filled up your car with gas
• Made a few calls on your way into the office
• Did you purchase bagels?
• Less than 6 or more than 6?
• Sliced or whole?
Avalara will calculate more than 6 billion transactions this year, most days you probably use
us and didn’t even know it.
Step Two:
Configure your administration console for all of your business units, product lines, or connected solutions
Step One:
Connect Avalara into any one of your order entry points
• ERP, E‐Commerce, Billing, CRM, POS, or all of the above
Cloud Based Connected System
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AvaTax does not support cash basis accounting ‐ must be accrual
TransactionalData
Returns & Remittance
Rates & Rules
Connector
How AvaTax works ‐ a Tax Engine in the Cloud
Avalara Tax Decision
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Address Validation
Lat/Long Conversion
Reference Your Nexus Profile
Rate Assignment• Sourcing rules, tax holidays, thresholds
Product Taxability Laws• Thousands of Avalara managed tax codes
Exemption Certificates
Real Time Tax Decision
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POSPOS
eCommerceeCommerce600Pre-builtintegrations
+
including all major ERPs
ERPERP
CRMCRM
Avalara Integrations and Ecosystem
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Implementation Overview
Estimate: 5 minutes Estimate: 5 ‐ 60 minutes Estimate: 20‐60 minutes
Calculate Tax
Estimate: 5 minutes per jurisdiction
Estimate: 5 minutes Estimate: 60 minutes
Remit Tax
Implementation Expert with Quick Start
Avalara Help CenterWebinars, Videos, How To
5 Steps to Reduce Risk
1. Evaluate where you have collection responsibilities (Nexus) and on which products and services you provide.
2. Ensure systems are properly tax sensitized/front‐line resources understand the importance of accurate information.
3. Objectively evaluate the costs and risks of your current sales and use tax environment.
4. Evaluate technology solutions – objectively determine the must haves from the nice to haves!
5. Make sure you have buy‐in from all impacted internal stakeholder groups on technology/process improvement projects.
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Notes