Adding Sales Tax to Your Accounting Practice Joni Johnson-Powe, JD, CPA & Andrea Steffes-Tuttle
Your Presenters Joni Johnson - Powe, JD, CPA CEO Andrea Steffes-Tuttle Marketing Director
Agenda 1. The Need for Sales Tax Support 2. How to Get Started 3. Challenges to Expect 4. Options for Getting Started 5. Q & A
The Need for Sales Tax Support The Call for Service Expansion On-demand client services are needed by today s competitive landscape Expand advisor role and provide unprecedented value Augmenting services with a sales tax offering - a key differentiator
The Need for Sales Tax Support Complex Jurisdictions and Changing Rates Expansion of nexus - clients need navigation to reduce calculation errors and lower audit risks. Sales tax represents 40% of state, nearly $400 billion in 2015. Governments are struggling to fill post-recession revenue gaps, thus increased the types of goods and services that are subject to sales tax. There are more than 7,000 tax rates - way too many for smaller business to keep up with.
The Need for Sales Tax Support Pending Legislation Adds to the Complexity Marketplace Fairness Act (MFA) & Remote Transaction Parity Act Would require out-of-state sellers making internet sales to collect sales tax Would increase the need for business owners to stay on top of rate changes and maintain compliance across states Remains stalled in Congress but promise for movement by House
The Need for Sales Tax Support Changing State Legislation Adds to the Complexity: Expansion of Nexus
The Need for Sales Tax Support Changing State Legislation Adds to the Complexity: Expansion of Nexus Click Thru Nexus New York and 19 other states have enacted similar rules to force remote sellers to collect and remit sales tax. E.g. For an out-of-state retailer where an instate retailer to refers purchasers by link on a website or thru other means for commission creates nexus. Sales must exceed $10,000 during the preceding 12 months. Economic Nexus South Dakota passed a law effective May 1, 2016 requiring some online retailers to collect and remit sales tax. Multiple law suits have been filed: Intentional Challenge to Quill 1992. Alabama rule effective January 1, 2016 - Out of state sellers without physical presence nexus, yet have significant economic nexus must collect and remit sales tax. 34 Bills in 22 state introduced 2016 to collect tax from online retailers.
Polling Question
The Need for Sales Tax Support Will You Be Ready? State tax issues are no longer a consideration only for large multinational companies: Any size company can sell online and may be doing business in multiple states just because they sell online.
How to Get Started How to Structure Your Sales Tax Service: Consulting or Compliance or Both Compliance and consulting services are entirely different practice lines that both generate considerable revenue when staffed in the appropriate model. Knowing them well helps choosing the practice type that better applies to your firm.
How to Get Started Understanding Sales Tax Service Style Options Compliance Services Tax registrations Calculation and collection of tax due Tax return filing Transmission of tax collected Handling notices Account maintenance Consulting Services Nexus determination Product taxation Sales tax audit defense Sales tax planning Due diligence Tax refunds Voluntary disclosure Risk assessment
How to Get Started Pricing Structures Revenue Stream of Compliance Pay-per-compliance cycle Regular, steady, predictable Lower return but opens other services lines Revenue Stream of Consulting Rate-per-hour Fluctuated, inconsistent High value & return
How to Get Started Business & Staffing Models Models of Compliance Timeline Based Collect information from clients, find irregularities and errors, and deliver results before filing deadlines. Missed filing deadlines results in penalties, extra cost and lose of clients. Needs a detailed planned, deadline-based process. Models of Consulting A Long-term Commitment Takes longer to build up the skill set than compliance but high dollar projects. Many of the practitioners have 10+ years of experience and have served as managers and higher level at the Big Four. Higher rates and return value based billing. Rich experience in risk assessment and accurate strategies.
Polling Question
How to Get Started With Any Opportunity Expect a Challenge Time Planning Investment
Challenges to Expect Not A Panacea For Everyone Consider the industries you serve when determining the value for clients... What s the value proposition?
Challenges to Expect Think Before You Move Understand before you move forward: Do my clients need this service? Do they need compliance or consulting service? How many of my clients would benefit from this service? Will this service significantly boost the value of my services to clients? Can I support this new service business model? Will this service differentiate my firm?
Challenges to Expect Partner and Staff Buy In Buy-in can be a major obstacle Sales tax services tend to be more expensive staffing expertise Partners may have a hard time understanding the value and business model Client may treat these services as an afterthought until they are hit with a big audit
Challenges to Expect Knowledge Sells Be prepared to answer questions and sell the value of the service: Get partner buy-in first Have a business plan designed, including a pricing model 3 4 2 1 Identify potential future revenue Present staff expertise to support sales tax services.
Challenges to Expect Sales Tax Software Solutions A fair amount of time will be spent on finding (researching and testing) a right system to support the firm and client with managing sales tax within a streamlined, automated workflow.
Challenges to Expect Make it Happen Do your research Conduct a complete inventory of client base Select the RIGHT technology The best cloud based and offer a robust accountants console Name a champion 3 4 2 1 Serve as the point of contact Be accountable for enhancing the service as needed Consistently communicate progress and monitor implementation
Challenges to Expect Sales Tax Can Be Complicated Constant changes in sales rates More than 10,000 jurisdictions Tentative legislative changes Partner with SALT industry Expert for more complicated issues
Challenges to Expect Stage Roll-out f Service Offering: Test Before Full Service Testing on a few clients allows you to more easily correct issues in: Technology Workflow Staff 3 4 2 1 Invest in staff and train them. Once model working efficiently and effectively, expand your sales tax client base.
Key Steps to Success Be Bold: Take Advantage of Opportunity Define Your Workflow and Find Right Software Solutions Invest in Your a Team and Evaluate Your Service Offering Strategy Partner with RIGHT Resources to provide value to clients
Options for Getting Started 30-Year Leader in Enterprise Tax Compliance Over 40 attorneys on staff Part of Government Initiatives
Q&A
Options for Getting Started The Taxify Advantage 50-State Coverage Automated rules, rates and filing in 12,000+ Tax Jurisdictions. Enterprise for SMB Part of Sovos, the world s trusted leader in tax for the past 30 years. Lots of Love Live experts are always available to make sure tax is never in your way.
Polling Question
Options for Getting Started Partner Program Options Practice Partners Pay for and manage accounts on behalf of your clients Discount % increases with number of clients Improve your margin on sales tax services Add a line of business of sales tax management Preferred Partners Refer your clients to Taxify and get commissions % increases with number of referrals
Options for Getting Started Partner Tools Dashboard Add a Client What to Do Next Go to http://taxify.co/partner-program/ and fill out form at bottom. Or go to taxify.co and click sign up for a 30 day free trial
Thank You! Joni Johnson - Powe, JD, CPA CEO of Taxnologi jpowe@taxnologi.com 303-955-5970 Andrea Steffes-Tuttle Marketing Director of Taxify andrea@taxify.co