Wednesday, February 29, 2012

Great Article: Sales Tax Audits - If Nothing Goes In, What Can Come Out?


He's got his eye on you

from salestaxsupport.com and Lloyd Geggatt

If you don't provide the auditor with the information they need, they have to use "indirect" methods of figuring out what your sales were.  You don't want that.  There are two parts to this article - a story about a very uncooperative taxpayer, and the nitty gritty details of the cost plus markup indirect audit method.  Enjoy the article.




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

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, February 28, 2012

Great Articles: Clothing Confusion

 Pittsburgh International Airport

from Avalara and Mark Wilhelm
In the few states that have clothing exemptions, the rules are very confusing.  The first article deals with New York and the second, Massachusetts.  But for you poor folk in the rest of the country, you can only dream.  Enjoy the articles: NY and MA.




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

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, February 27, 2012

Great Article: Can Sales Taxes Bankrupt a Company?

Something horrible happened here

These articles should scare the hell out of you.  It's a true sales tax horror story. The first is from Bellatoris Consulting, LLC who linked to the far nastier story from the Portland Business Journal that tells the tale of a mattress retailer in Portland, Oregon who got tangled up with nexus issues in Washington.  I've always figured that states preferred to avoid bankrupting businesses.  It's bad policy to put voters out of work.  But this is a business in Oregon.  So what the heck does Washington care?

Read the article and be scared.  Particularly if a significant amount of your business comes from the state just across the river.   Enjoy the article.  




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

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, February 20, 2012

FAQ: What are the Different Types of Exemption Certificates?

An exemption certificate is presented to the seller by the buyer.  Properly completed, it relieves the seller of the responsibility of collecting sales and use tax from the buyer.

Generally, certificates are needed for exemptions based on buyer's organization, or how the buyer will use the purchase. The forms required vary by state.  Sometimes there is one form that works for all exemptions, and sometimes there are specific certificates for certain sets of exemptions.

There are several types of exemption certificates:

Resale
The buyer is intending to resell the purchase or use it as an ingredient in something he will manufacture.


Agriculture
The buyer will be using the purchases for farming, cattle, or nursery-type activities.  This category also sometimes include forestry and aqua-culture.

Direct Payment 
The buyer has made a deal with the state to allow them to pay their use taxes directly.  Therefore, they do not have to pay sales and use taxes to the seller.

Most states have the above exemptions.  The following are exemptions that are used in most states, but are nowhere near universal.

Non-profit organizations
Charitable organizations usually have to be registered with the state and provide a certificate to the seller if the purchase will be tax free.

Government agencies
Often these exemptions are documented by other paperwork, such as contracts or purchase orders.  However some states do use certificates for this exemption. 

Manufacturers
If they're going to use equipment and supplies in manufacturing, many states give an exemption which the buyer must document with a certificate.

You'll also see exemption certificates used for other exemptions including mining, commercial fishing, out of state custom printing, enterprise zones, research and development, etc.

Note, despite the disclaimers plastered all over, some people still bust my chops about a particular rule not being the case in their state.  Remember, the rules are different where you are!  Sheesh.



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/

Monday, February 13, 2012

Oldie but Goodie: The moral and ethical issue of not complying with sales and use tax laws

Justice of the PeasSometime, paying the correct amount of sales and use taxes just drives you crazy.  I expect you to pay the right taxes.  But there may be situations where it just costs too much!  I take apart the issue in this classic, spruced up, and improved article.





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, February 09, 2012

Beware of sales tax seminars in state capitals.

Actually Doing My Job

This article may not be terribly helpful to most of you. But it’s kind of funny. And there’s a point to the story. But it’s mostly kinda sorta interesting. Oh, what do I know? Read the dang story.

A couple of years ago, I was doing a sales tax seminar in a hotel that just happened to be in the state capital. It was a small city (as many state capitals are) and the class wasn’t very big. I was sitting at the registration table waiting for the first folks to arrive. I scanned the roster and came to “Joe Smith, XXXX Department of Revenue.”

“Oh, great,” I thought. That’s just what I need - a sniper, and from the state too. All I could hope for was that the participant worked in accounting.  Revenuers have accounting departments, right?
A “sniper” in public speaking and training circles is someone in the audience who thinks they know more than the speaker, and is anxious to show off their dazzling brilliance. I’ve found pepper spray is helpful.
As it happened, Joe was the first one to arrive. I asked him, as he was signing in, what he did at the Department of Revenue. “I’m the director of the sales tax audit division.”

Oh, great. This was shaping up to be a bad day.

I wanted to chat, but other folks started arriving and he wandered off to take a seat in the front row. In the front row! This day was looking even worse.

I decided I needed to make sure the rest of the group knew he was in the room. I didn’t want someone blurting out, “Yeah, I need some sales tax advice. I’m the accountant for Arnold’s Pizza Place, over on 31st and Hillside. In fact, my boss gave me a bunch of coupons for everyone in the class. Our address and a map are right on the coupon.  Here, pass them around. Make sure everyone gets one. Don’t forget that guy in the front row. Anyway, we’ve been collecting sales tax for years but never paid it to the state. Is that a big problem?”
And yes, I’ve had that question in my seminars. Really.
I didn’t really feel comfortable just starting the seminar saying, “Attention everyone, this is Joe.  He runs the audit division for the state.  You might want to shut up.  Just saying.”   Instead I did something I never do, “OK, it’s a small group, let’s go around the room and introduce ourselves.” 

I know, you hate it when we do that, don’t you?

The last person to introduce himself was Joe.   After doing so, I noticed that everyone else had the look people must have when they get to the top of the first drop on the roller coaster.  Joe then said, “Now I’m not here to collect names for our auditors.  You folks have nothing to worry about.  We got the seminar brochure in the mail, so we thought we'd see what Jim here was saying.”

Oh, yeah.  This was shaping up to be the worst day of my life.  I also made a mental note to tell the marketing department to, in the future, not send brochures on tax topics to any state agencies.

Joe’s statement that he wasn’t looking for people to audit apparently wasn’t believed.  This turned into the most boring seminar I ever taught.  For six hours, there were NO QUESTIONS.  The audience, other than Joe, simply stared at me in absolute terror.  There was an AUDITOR in the room!

Nobody would talk to me, even at the breaks.  The only person that didn’t clamp their hand over their mouth and run from the room was Joe.  So I picked his brain and got a lot of good insights into revenue department strategies, etc.  So there was that silver lining - for me.

Here’s the relevant point for you folks.  And I’m serious.  Reconsider before going to a seminar on sales tax, or any tax or regulatory topic, in a state capital.  There’s a good chance that there will be an auditor in the room.  And you will not get the dynamic, interactive seminar that you paid for. I've done seminars in several state capitals over the years, and had experiences similar to what I've described in many of them.  I ain't lying here.  And the above is a true story!

Oh, in case you’re wondering, Joe said I got everything right and was pretty good  Yes!  



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: any images above are hosted on Flickr. If you'd like to see more, click on the photo.  And the picture isn't from this seminar.

Wednesday, February 08, 2012

Great Article: On making sure your folks are trained and STAY trained

Gate C37 at DFW

from Tim Freeman and onesourceblog.com

I'm not sure I would have used the metaphor in this article, and I've been known to stretch some. But it gives me an excuse to use an airplane picture.  The point is valid, however. If you're going to invest in systems, you must consider the downstream costs of training and development. Enjoy the article. 




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

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, February 07, 2012

February Newsletter

Greetings and welcome to our monthly newsletter.  If you have any feedback or questions, please let us know at jfrazier@gadwall.com. And we only send this out once a month, so don't panic!
Services
We offer webinars on a very densely packed schedule, allowing us to do
Taxing Policy webinars for the 10 biggest states on a monthly basis, with other states on an almost quarterly basis.  And our multistate webinars (Golden Rules, Nexus and Best Practices) are scheduled almost weekly. 

Please remember that we do custom scheduling, in case you just can't find the right combination of date, time and topic. 

We also offer private, on-site, highly customized training for individual organizations.  If you have more than 10 people to train, this can be a better solution for you, allowing more interactivity and problem-solving among your staff.  If you're interested in exploring this, please drop me a line at jfrazier@gadwall.com

Recent updates to The Sales Tax Guy blog

New Articles

Movie Production Equipment

One way of treating your auditors


Oldies but goodies: Older articles that we've spruced up and revised.


Use Local Experts



Links to great articles from others


12 Sales Tax Tips for Small Businesses


The Biggest State Tax Story of 2011: Internet Sales Taxes

Open Your Mail


I hope you've enjoyed (or at least found useful) this newsletter.  Please remember that if you're not interested in receiving these in the future, feel free to unsubscribe.  And if you have any thoughts, please let me know at jfrazier@gadwall.com
Thanks for your continued interest.  And please feel free to forward this email.

Jim Frazier

salestaxguy.blogspot.com
salestax-usetax.com
takechargeseminars.com
gadwall.com



Follow us on Twitter to get the latest sales tax news and instant updates on the blog.

Like us on Facebook to get the latest blog updates.


This is the text of our monthly email newsletter.  If you'd like to receive it via email, please subscribe here.

Friday, February 03, 2012

Great Article: Beware of Posting Sales Tax Questions on Social Media Sites

There's a first time for everything

from www.salestaxsupport.com

My heart always sinks when I do a public sales tax seminar and see a sales tax auditor shows up.  I know that the rest of the class will go completely quiet and not ask questions.  They're terrified that the auditor will notice.  And with all this social media flopping around, you just never know when those auditors are lurking, waiting to pounce.  Enjoy the article




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

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 yes, I once did a seminar in a room with a mirror ball.  Actually, now that I think of it, a couple of times.  Sigh.

Thursday, February 02, 2012

Great Article: Open Your Mail

Paperweight

from Kelly Phillips Erb, at http://www.forbes.com

I've written about this myself, but it's a really evergreen topic. While the author discusses the need for you to read and respond to notices from the IRS, you get 'em from the state too.  Read the dang notices.  Enjoy the article.




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

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, February 01, 2012

Oldie but Goodie: How do I find a sales tax professional?

I get a fair amount of questions from people who are in need of a sales and use tax professional, particularly one who can handle multiple states. I don't do that type of work, so I give these suggestions in this old article that I've touched up.  You may like the picture too.


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

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