Monday, October 31, 2011

Great Article: True, Scary, Funny Tax Stories*

"I'm not dead yet!"

from Avalara

I love horror stories.  And these are stories from the "other side" - where the auditors' souls reside.  Boo!

Happy Halloween

This link is part of a series called "Excellent articles that I wish I had written."  The short name is "Great Articles."  Enjoy.



The Sales Tax Guy
http://salestaxguy.blogspot.com

Don't forget our upcoming seminars and webinars.
http://www.salestax-usetax.com/
Picture note: the image above is hosted on Flickr. If you'd like to see more, click on the photo. 

Thursday, October 27, 2011

Great Article: The Marketplace Equity Act: The New Competition on the Block

Tourists at the White House II

from Sylvia F. Dion at www.salestaxsupport.com

At the time Sylvia wrote this, there were two bills in Congress to allow states to force tax collection on companies that do not have nexus in their state (what have been commonly and annoyingly called the Amazon.com laws).  Now there are three such pieces of legislation that have been introduced.  I try to avoid looking at proposed laws until someone actually signs them.  Thank goodness Sylvia finds this interesting, and she's written a nice summary and comparison of the first two bills.  I'm sure that the third bill will fall under her pen shortly.

In the meantime, if you want to get up to speed on the concepts and the first two versions, here ya go


This link is part of a series called "Excellent articles that I wish I had written."  The short name is "Great Articles."  Enjoy.



The Sales Tax Guy
http://salestaxguy.blogspot.com

Don't forget our upcoming seminars and webinars.
http://www.salestax-usetax.com/
Picture note: the image above is hosted on Flickr. If you'd like to see more, click on the photo.  And yeah, the picture isn't of Congress or the Capitol.  But I don't have a good picture of either, so you'll have to enjoy this one.  Sheesh.

Wednesday, October 26, 2011

Let the other guy do it!

Ice Fishing
I wrote an article yesterday where the customer was insisting that they weren't taxable and I suggested that they were.  I also suggested that the customer provide the seller with proof that the purchase was exempt.  I wanted to link to an article I wrote on this narrow subject, but found that I never did write anything.  So here ya go.  And yes, I'm going back and adding the link to yesterday's article.

I've written many times about where to find answers.  Most of these resources require that you spend money, and all of them require that you spend your valuable time.  But here's the thing.  If you're a regular reader of this blog, or other sales and use tax publications, then you are probably much more well-informed on sales and use taxes than just about anyone else you're going to routinely meet.  

When you find yourself in a situation where a vendor or customer is insisting that the sales tax law is different than you believe, make them prove it.  Don't waste your time researching the issue when they are probably wrong.  Remember, you're smarter than they are.

By the way, proof isn't "well, that's what my boss said."  Proof is in writing with references to statutes, regulations, bulletins or court cases.  "Well, the auditor told us to do it this way," isn't enough either.  

Here's one way the dialogue might go:

You: "I understand what you're saying, but my boss and I have been to several sales tax seminars and webinars* and I read a lot about sales and use taxes and I've never heard about that rule.  Can you email me the statute that gives the details.  I'm going need something to show my boss."  

Remember to always use your boss's persnicketiness as an excuse.  

Them: "Well, I don't have that.  That's just what my boss told me to do." 

You: "And I appreciate that.  But I still have to charge you tax unless I can show my boss something authoritative that shows it's exempt.  You must have something like that in the files.  Maybe you can call your CPA." 

Let them pay the money to have the CPA research it.  Remember that you're smarter than them.  Relax.  Go fishing. **



* an admittedly shameless plug 
** picture tie-in

The Sales Tax Guy
http://salestaxguy.blogspot.com

See the disclaimer - this is for education only.  Research these issues thoroughly before making decisions.  Remember: there are details that haven't been discussed, and every state is different.  Here's more information

Get these articles in your inbox - subscribe at http://salestaxguy.blogspot.com

Don't forget our upcoming seminars and webinars.
http://www.salestax-usetax.com/
Picture note: the image above is hosted on Flickr. If you'd like to see more, click on the photo. 

Tuesday, October 25, 2011

Who CARES if they have nexus?!?

Hope she's not on my colonoscopy teamI've heard these two questions so many times, including today, that I feel the need to put them to rest.  So if I've suggested you read this article in response to an email, then ya best read it now.

Question 1: My vendor has nexus in our state.  Shouldn't THEY be charging tax?  

In a perfect world, yes, they should be charging you tax.  But, you may have noticed that we're not in a perfect world.  Your vendor may not realize they have  nexus, or they do realize it but choose to ignore it.  If you call them and insist they collect, you run the risk of:

a.  Ticking off your vendor
b.  Having to educate them about nexus, which is above your paygrade
c.  Having them say, "OK, we'll start charging tax," just to make you shut up.  This will come back to haunt you

You could rat them out to your state's department of revenue, but that just seems...tacky.

But who cares?  Just accrue and pay the use taxes the vendor should have charged you, and move on.  There's no economic cost to do this, and if you have a decent system in place, not really any more work.

There is a risk however, of the vendor getting caught in a couple of years. They may come back to you for the tax that they didn't collect when they should have.  Protect yourself from this hassle by having a clear audit trail on the invoice showing that you HAVE self-assessed use tax.


Question 2:  My customer is based in Canada.  I'm in Nebraska.  He has nexus in Nebraska.  I know this because I'm delivering the shipment to his warehouse here in Omaha.  He says I shouldn't charge tax because he's in Canada.  What should I do?

Charge Nebraska sales tax.  Their nexus isn't the issue when it's something YOU sell.  Nexus is only relevant to determine if a seller has to charge tax in states the seller ships into.  If you're a customer of this company, see question 1.  You shouldn't care about the buyer's nexus in your state.  What you need to care about is properly taxing your sale.

And generally, that means to base your decisions on where the delivery occurs.  Since that happened in Nebraska, you collect Nebraska tax.  If they claim the purchase is exempt because they're in Canada, ask them for proof.  Point out that if you go to Canada and buy something in a store there, you are not exempt from Canadian tax. 

There might be other exemptions (eg. manufacturing, resale, etc.).  But I know of no exemption in Nebraska for material delivered in Nebraska just because the customer is Canadian.  Again, ask them for evidence that they are exempt.  They should be able to provide you with a Nebraska or US law.

As a point of comparison, if you shipped the goods directly TO Canada, then they would be right.  The delivery point is Canada and Nebraska sales tax would no longer apply.  But that's not what's happening.

See why that delivery point rule is so handy?




The Sales Tax Guy
http://salestaxguy.blogspot.com

See the disclaimer - this is for education only.  Research these issues thoroughly before making decisions.  Remember: there are details that haven't been discussed, and every state is different.  Here's more information

Get these articles in your inbox - subscribe at http://salestaxguy.blogspot.com

Don't forget our upcoming seminars and webinars.
http://www.salestax-usetax.com/
Picture note: the image above is hosted on Flickr. If you'd like to see more, click on the photo.  By the way, I have no clue why I used it.  It just seemed seasonal..

Monday, October 24, 2011

Great Article: Sales Taxes on Services: Yoga Classes, Veterinary Services, and ... Dog Socials?

Pewee Visits the Vetfrom http://www.taxfoundation.org

This article discusses the proposition that sales taxes should apply to both services and stuff.  With which I have no problem, as long as the rates go down.  But the great part is the fine points of taxing services in Connecticut.  A state which has a LOT of fine points.

Click here for the article. 

This link is part of a series called "Excellent articles that I wish I had written."  The short name is "Great Articles."  Enjoy.



The Sales Tax Guy
http://salestaxguy.blogspot.com

Don't forget our upcoming seminars and webinars.
http://www.salestax-usetax.com/
Picture note: the image above is hosted on Flickr. If you'd like to see more, click on the photo. 

Wednesday, October 19, 2011

Great Article: Interviewing Your Sales Tax Outsourcing Provider Will Enhance Success

Xena from accounting wants your expense report right now!from http://www.taxconnex.com

What a great idea!  Who'd a thunk it?  When you're hiring a sales tax outsourcer, or any systems company for that matter, don't just make your decision based on the slick sales person and a tour of the nice offices.  Check on the people who will be providing day to day support.  That is where the rubber meets the road.

http://www.taxconnex.com/Blog------/bid/74463/Interviewing-Your-Sales-Tax-Outsourcing-Provider-Will-Enhance-Success

This link is part of a series called "Excellent articles that I wish I had written."  The short name is "Great Articles."  Enjoy.



The Sales Tax Guy
http://salestaxguy.blogspot.com

Don't forget our upcoming seminars and webinars.
http://www.salestax-usetax.com/
Picture note: the image above is hosted on Flickr. If you'd like to see more, click on the photo. 

Tuesday, October 18, 2011

Great Article: Saying “I Do” to Tax Software

DVD'sfrom http://www.salestaxsupport.com

Suzy Soo outlines five popular sales tax software systems and does a pretty thorough job of reviewing how you can match your needs against what they offer.

http://www.salestaxsupport.com/blogs/sales-use-tax/sales-tax-software-automation/how-to-select-sales-tax-software/

This link is part of a series called "Excellent articles that I wish I had written."  The short name is "Great Articles." Enjoy.


The Sales Tax Guy
http://salestaxguy.blogspot.com

Don't forget our upcoming seminars and webinars.
http://www.salestax-usetax.com/

Picture note: the image above is hosted on Flickr. If you'd like to see more, click on the photo.

Monday, October 17, 2011

Great Article: Three Deal Breakers for Acquisitions

The View from My RoomFrom the good folks at http://salestaxinsight.com

About a year ago, I wrote a true horror story about this problem.  This article summarizes the problem much more succinctly than I was able to do. 

This link is a new series we're offering called "Excellent articles that I wish I had written."  The short name is "Great Articles."  Enjoy and learn.



The Sales Tax Guy
http://salestaxguy.blogspot.com

Don't forget our upcoming seminars and webinars.
http://www.salestax-usetax.com/
Picture note: the image above is hosted on Flickr. If you'd like to see more, click on the photo. 

Friday, October 14, 2011

Great Article: How a Color Coded Map of the US Can Reduce Sales Tax Nexus

LinksThis is from TaxConnex and talks about a simple, graphic and proactive way for a business to manage nexus.

http://www.taxconnex.com/Blog------/bid/70899/How-a-Color-Coded-Map-of-the-US-Can-Reduce-Sales-Tax-Nexus

This link is a new series we're offering called "Excellent articles that I wish I had written."  The short name is "Great Articles."  Enjoy and learn.


The Sales Tax Guy
http://salestaxguy.blogspot.com

Don't forget our upcoming seminars and webinars.
http://www.salestax-usetax.com/


Thursday, October 13, 2011

Dealing with the Home Office

Waiting for the RestroomA recent webinar participant had a couple of complicated questions, so we made a phone-date to chat when I knew I would be spending an hour or so in a Chicago rush hour.  So, while I was in the warm embrace of traffic, we talked sales tax. 

Warning, the language gets a tiny bit crude a little later.  Just letting you know in case you have delicate sensibilities.

A problem she was having that ran through all of her questions was the problem of dealing with her corporate office.  She was kind of the chief-cook-and-bottle-washer in the office at a branch location of a much larger (though not gigantic) company.  She had grown so frustrated at the inconsistent guidance she was getting that she decided to sign up for all four of our webinars.  Yay for her!

The conversation eventually evolved to talking about what she could do to solve the problem with corporate.  Before I tell you the answer I gave her, let me put a different disclaimer than usual here: there's a reason I finally decided to start my own company.

I have spent years in the corporate world and years presenting seminars on regulatory issues (like sales and use taxes).  I have heard this complaint more than a few times. I gave her this precious bit of wisdom:

"These problems are above your paygrade."

Folks, I want you all to learn about sales and use taxes.  I want you to care about sales and use taxes.  I want you to care about your company.  And your company should want these things too.  But if, once you've learned, they refuse to listen to you, then relax.  This problem has now sailed WAY above your paygrade (but you can still be smug knowing you're better informed about sales and use taxes than they are).

See, if you're at the right paygrade, then when you complain, people will listen to you.  And they may change things.  They may do it grudgingly, but they'll at least pay attention and give you explanations.  But if they won't do that; if they pretty much ignore your concerns, or respond in a blow-you-off kind of way, than the issue is above your paygrade.  Simple.  They've just told you in their own special way.

But that doesn't make you feel that much better, does it?  Because when it all blows up, you're still gonna get in trouble, right?

Email is a wonderful thing because it solves a problem that I had back in the day.  Back then, pre-email, we had to write "cover your ass" memos whenever we felt that an issue we had raised had been ignored.  So we wrote something like, "in regards to the meeting we had today on the Johnson Project, I just want to confirm that you said that I should just forget about it."  And our bosses would immediately spot that as a CYA memo.  This was not a career enhancing move, but was usually the only thing we could do that would get us off the hook when the proverbial poop hit the fan. 

Today, you kids have email.  So you probably haven't even HAD a meeting.  You've been exchanging emails with your boss that document the entire Johnson Project conversation.  So when someone starts chucking poop, you've got cover.

So make sure you raise the issues via email, then go home at 5 and watch The Simpsons.  Relax.  Then go back to work in the morning, ready to face the bright new day, with a song in your heart, and ready to deal with some fascinating new sales tax issue. 

And if you're corporate, listen!  Those people may actually know more about it than YOU do.  And if they won't listen to YOU, then it's obviously above your paygrade too.

You see, what it comes down to is that if they don't listen to you and respect your opinion, then you obviously don't need to worry about it anymore.

Now I know that some of you more responsible readers are going to still take ownership of the problem and want to solve it for the good of the company.  And that's admirable and I don't want to discourage this.  So please learn and try to solve the problems.  But I don't want you to get ulcers and migraines from the frustration of dealing with people that don't care as much as you do.  I have the ulcers to prove it. 

At some point in time, go home and watch the Simpsons.  

As I said, there's a reason I am out of that world. 

And just to show you how hip I am, feel free to watch Family Guy too.




The Sales Tax Guy
http://salestaxguy.blogspot.com

Don't forget our upcoming seminars and webinars.
http://www.salestax-usetax.com/
Picture note: the image above is hosted on Flickr. If you'd like to see more, click on the photo. 

Tuesday, October 11, 2011

Great Link on Local Sales Tax Rates

This article reviews the local jurisdiction rates running for really low all the way up to real bloodsuckers.  From http://taxfoundation.org.

http://taxfoundation.org/news/show/27645.html

Monday, October 10, 2011

Friday, October 07, 2011

Great Article Link: Surprise! Surprise! Surprise! - The State Auditor Looked at Your Website???

What did he see?!!?Years ago, I came across someone in a seminar who said they got caught by Washington because they had listed, on their website, their manufacturers' reps.  It turns out that one of those reps was based in Washington.  Washington had audited the rep firm and then simply searched the web for any other companies with this firm listed on their web page.  Bingo!

So, as this article from http://dowlohnesprice.blogspot.com says, watch what you put on your web site.




The Sales Tax Guy
http://salestaxguy.blogspot.com

See the disclaimer - this is for education only.  Research these issues thoroughly before making decisions.  Remember: there are details that haven't been discussed, and every state is different.  Here's more information

Get these articles in your inbox - subscribe at http://salestaxguy.blogspot.com

Don't forget our upcoming seminars and webinars.
http://www.salestax-usetax.com/
Picture note: the image above is hosted on Flickr. If you'd like to see more, click on the photo. 

Thursday, October 06, 2011

Link: Groupon, Living Social, etc.

Eat in GalenaA very good explanation from http://dowlohnesprice.blogspot.com/ on the sales tax issues involving these deals that companies like Groupon and Living Social are offering. The article particularly addresses MA and NY, but can be helpful in understanding the issues in any state.

And for some background, here's an article from 2009 on good old-fashioned coupons.




The Sales Tax Guy
http://salestaxguy.blogspot.com

See the disclaimer - this is for education only.  Research these issues thoroughly before making decisions.  Remember: there are details we haven't discussed, and every state is different.  Here's more information

Get these articles in your inbox - subscribe at http://salestaxguy.blogspot.com

Don't forget our upcoming seminars and webinars.
http://www.salestax-usetax.com/
Picture note: the image above is hosted on Flickr. If you'd like to see more, click on the photo. 

Wednesday, October 05, 2011

Link: Top 5 Activities that Cause Nexus for Technology Companies

La Crosse Rail Bridge Closes After We PassTaxConnex recently published an excellent white paper that really covers all the bases when it comes to having nexus in a state.  They describe WHY nexus is a problem and how you get it.  And don't let the title fool you.  While it's directed at technology companies, fishing tackle companies will find it useful as well.

http://www.taxconnex.com/top-5-activities-that-cause-nexus-for-technology-companies/ 




The Sales Tax Guy
http://salestaxguy.blogspot.com

See the disclaimer - this is for education only.  Research these issues thoroughly before making decisions.  Remember: there are details we haven't discussed, and every state is different.  Here's more information

Get these articles in your inbox - subscribe at http://salestaxguy.blogspot.com

Don't forget our upcoming seminars and webinars.
http://www.salestax-usetax.com/
Picture note: the image above is hosted on Flickr. If you'd like to see more, click on the photo.