Don't Trust Your Software

I hate to say this, because it may tick off some software vendors that might be inclined to buy advertising on this site (hint hint hint), but it's important that the buyers of software understand something important.

I had an email recently from a seminar participant who asked whether or not her company, who had to register in Louisiana, also had to register in the different Louisiana parishes as well. The answer I gave her was that yes, if you have nexus in Louisiana, then any shipments you make to any of the local jurisdictions are taxable as well. She said that their software vendor had not brought this up, so they hadn't done anything about it. She was new, so she was asking questions, poor soul.

I have this problem in the payroll and wage-hour seminars that I teach (occasionally) as well the sales tax courses. Please don't expect your software vendors to keep you compliant with the law. Their job is to provide you with software that will do what you want it to do. If you don't want to file taxes in local jurisdictions in Louisiana, they're OK with that, and will provide you with that option. The software support people you deal with probably don't understand what nexus is, let alone what the local jurisdictions expect.

And if you buy payroll software and don't mention that you need it to do the regular rate of pay calculation, they're not going to bring it up (and probably won't know about it even if you ask). This is entirely off the subject of SUT, but it illustrates the point.

I had lunch with a software company a while back and we got on the topic of Louisiana. The owner of the firm, who we'll call "Mike", knew the Louisiana law very well. Mike said that he had more than a few customers who chose not to collect the local taxes and file the local returns. The attitude was, "let them come and get me." And Mike was not going to argue with paying customers.

I don't encourage any of you to do what Mike's customers are doing. While some of the local tax collectors aren't highly sophisticated, the larger parishes ARE pretty smart, and they also hire independent auditors to do out-of-state audits. And those auditors are paid on commission. This is not a good thing.

So don't count on your software vendor to do any more for you than provide quality software to do the job that you say you need done. It's up to you to figure out what you need done.

Finally, if your computer room looks like the one above, I see a big upgrade in your future.

Sales Tax Guy