April 2016 Conference Overview

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Bartholomew Black
5 years ago
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Alternate Payment Options and What Might Be the Benefits Presented by Robert Day, weaudit.com I really enjoyed and picked up a lot of good information from Day s session last year in New Orleans.

1 Alternate Payment Options and What Might Be the Benefits Presented by Robert Day, weaudit.com I really enjoyed and picked up a lot of good information from Day s session last year in New Orleans. I found him interesting and engaging, so I was really looking forward to this year s offerings. Mr. Day presented a laundry list of payment types with some expansion/explanation of what those types are with a few ideas on values or drawbacks of each. Perhaps, not as interesting as hearing him for the first time, but Mr. Day s talks are usually animated and full of energy. His PowerPoint presentations are always eyecatching and informative. John Glaze Highland Computer Forms, Inc. FM0166

2 The session I sat in on, Escheatment: Mitigating & Unclaimed Property with speakers Mike Kenehan & Nick Boegel from BDO was very educational. They talked about the basics of unclaimed property, whether your accounts receivable property is subject to unclaimed property requirements and how to minimize your unclaimed property risk. What you need to do to be compliant and to sustain compliance. We learned the many questions that arise with this topic: Should my company continue to write off unresolved credit memos and balances or should we report these to the state? Will there be a penalty or interest charges to me if found non-compliant? Do I pay unresolved credits to the state my company resides in? There was so much information I found to be helpful and useful in this session. I always look forward to attending these conferences because I find I can use this information that I have learned in my day to day experiences. Carol Ritthamel C. E. Printed Products FM0219

Bankruptcy Update Presented by Mary Seymour & Andrew Behlmann, Lowenstein Sandler I attended this presentation and as always came away with some very useful information.

Some of these were Inventory Buildup, % of increase in accounts receivable vs % increase in sales.

3 Bankruptcy Update Presented by Mary Seymour & Andrew Behlmann, Lowenstein Sandler I attended this presentation and as always came away with some very useful information. Mary and Andrew discussed warning signs we may not take into consideration that show up beyond the information received on the Balance Sheets. Some of these were Inventory Buildup, % of increase in accounts receivable vs % increase in sales. Has the company or principal of the company signed a guarantee for someone else, or has the company changed CPA firms recently? These should all be items we check into as a RED FLAG that a company may be headed toward bankruptcy. Mary suggested that we might want to change our Credit Application to include the questions, Is your company subject to any pending litigations at this time and Have you guaranteed for another company or person? At this time we are seeing many larger companies closing their doors and filing bankruptcy. A tidbit I picked up when discussing this happening was that in a company that employs 100 or more people that company must give the employees a 60 day notice of plant closing/mass layoffs. The penalty if this is not done is that the company is liable for the back pay and benefits. This was a very informative session. Gayle Redwine Caprock Business Forms FM0134

4 Sales and Use Tax Workshop Presented by Thomas Smith, BDO Sales and Use Tax may not be the most exciting topic, but it is necessary to be knowledgeable in order to keep your company in compliant with the laws and issues of Sales and Use Tax. Thomas Smith with BDO is well versed in the subject and kept our interest during the workshop. Although there was too much information to put in this article there are a few basic points that I would like to mention from the workshop. States are looking to collect more money, so you must be knowledgeable about Sales and Use Tax in multiple states. Currently, there are 5 states that do not have Sales Tax. The states are Oregon, Delaware, New Hampshire, Montana and Alaska. You may ask the question; What is the difference between Sales and Use Tax? Sales Tax is a transaction tax that is imposed on transfers of tangible personal property and services. Sales Tax generally applies to Intrastate Sales; two companies in the same state doing B2B transactions. Use Tax is a tax imposed of use of property in a state. Use Tax generally applies to transactions involving multiple states. It is the seller s fiduciary responsibility to collect and remit tax to the state. However, it is the Buyers obligation to pay the sales tax. A company is legally responsible to prove and maintain proper documentation for the transaction to be a tax-free sale. It is vital for the seller to keep the Resale and Exemptions Certificates updated and on file. For the Certificates to be valid, they must be taken timely (prior to the sale), taken in good faith and contain the following information. *Name and Address of Purchaser *Purchaser s Permit Number *Purchaser s Statement of Product to be Purchased and Resold *Signature of Purchaser Each State may differ on what is acceptable. An Auditor can reject the Resale and Exemption Certificate if it is not filled out properly or signed. A lot of companies use the Uniform Sales and Use Tax Certificate for multiple jurisdictions because it is used by most of the states and the District of Columbia. However, it is not used in the states of Indiana, Louisiana, Massachusetts, Mississippi, New York, Virginia, West Virginia and Wyoming.

5 When maintaining Resale Certificates from your customers, it is a good idea to maintain and update resale certificates periodically. When going through an Audit you may be required to show the Resale Certificate from a specific time frame. So you may have to show an older resale certificate instead of the most recent. This will be your supporting documentation for the resale transaction. Some of you may require to collect and remit sales and use tax to states. Currently there is a bill that is called, Marketplace Fairness Act of 2013.This bill is expected to pass. The Act requires that states must simplify their sales tax laws in order to ease those concerns and make multistate sales tax collection easy. States have two options, they can join the Streamlined Sales and Use Tax Agreement as 24 states already has done or they can adopt the simplification mandates included in the bill. Another important topic is Nexus. Nexus is determined if you have sufficient physical presence. It is the determining factor of whether an out-of-state business selling products into a state is liable for collection sales or use tax on sales into the state. Nexus is required before a taxing jurisdiction can impose its taxes on an entity. However, Nexus sometimes is easy to be established. In some states it can be as easy as your company maintaining a temporary or permanent of people (employees, service people or independent sales/service agents) or property (inventory, offices, warehouses). The temporary presence is created through traveling people visiting states to call on customers or prospects, trade show attendance, or consigned inventory in a warehouse. Unfortunately, Nexus can be defined differently by each state. It can vary by 1 day to a number of days. The number of days that can create nexus can also vary based on the activity performed in the state. Nexus means a business entity has established a direct or indirect (representational presence) within a state. So it would be recommended to try to be as knowledgeable as you can about the many states you do business in. For some companies it could be all 50 states. Pam Johansen Papercone Corporation FM0339

Sales and Use Tax Introduction

Sales and Use Tax Introduction Carlos Hernandez Ernst & Young LLP Chicago, IL Lauren Tallman KPMG LLP Seattle, WA Presenters Carlos Hernandez Ernst & Young LLP Indirect Tax Services 115 N Wacker Drive