2. The Ecommerce Sales Tax Challenge
Automate with Technology
Top 10 Compliance Tips
Avalara at a Glance
Questions?
Agenda
Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
3. 11,000+ distinct tax jurisdictions in North America
100,000+ distinct taxability rules
Exempt Products
Exempt Organizations
Tax Holidays
Thousands of changes each year
State-provided info often missing, misleading, or wrong
Sourcing rules differ
Nexus triggering rules vary
and legislation is changing for Internet Purchases!!
Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
4. The Sales and Use Tax Landscape for
Internet Retailers
Massive state
More than 16 states have budget pressures
enacted or are considering
Internet Sales Tax legislation
Federal Pressure
Increased State to legislate
Enforcement Internet Sales Tax
Activities collection
Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
5. States define Nexus as a ‘tangible physical presence’ which
creates the requirement to collect & remit Sales Tax.
Nexus triggering events can include:
Traveling Salespeople
Agents or Distributors
Employees on Payroll
Training
Trade Show Attendance
Inventory / Warehousing
Servicing Tangible Personal Property
Affiliates
Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
6.
7. 6 5
ZIP Codes don’t mean zip 1 4
3
2
LOCATION 1 2 3 4 5 6
TOTAL 4.0% 7.5% 5.1% 7.0% 8.1% 6.6%
SCIENTIFIC/CULTURAL 0.1% 0.0% 0.1% 0.1% 0.1% 0.1%
REGION TRANSIT DISTRICT 0.0% 0.0% 1.0% 0.0% 1.0% 1.0%
FOOTBALL DISTRICT 0.0% 0.0% 0.1% 0.0% 0.1% 0.1%
CITY 0.0% 3.6% 0.0% 3.0% 3.0% 1.5%
COUNTY 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%
STATE 2.9% 2.9% 2.9% 2.9% 2.9% 2.9%
8. A State by State Look at Sourcing Rules
Sourcing determines the location (situs) of a sale and what
jurisdiction the tax collected from a transaction is owed
• Origin-Based States for Products (Services Destination)
– Arizona, Illinois, Missouri, New
Mexico, Ohio, Pennsylvania, Tennessee, Utah, Virginia
• Mixed Source States
– California
• Counties are Origin-based; Cities & STJs are Destination-based
– Texas
• Cities and Counties are Origin-Based based; STJS are Destination-based
• Destination-Based States
– All the Rest
Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
9. Taxable or Non-Taxable in
New York?
Price
$50
Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
10. Taxable or Non-Taxable in
New York?
Price
$85
Clete Werts – Avalara | Making sales tax less taxing
11. Taxable or Non-Taxable in
New York?
Price
$125
Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
12. Taxable or Non-Taxable in CA?
Download Adobe Acrobat 9 Pro Extended
https://www.adobe.com/downloads/
Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
13. Taxable or Non-Taxable in CA?
Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
14. Taxable or Non-Taxable in CA?
Download Adobe Acrobat 9 Pro Extended
https://www.adobe.com/downloads/
Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
15. Understanding Product & Service Taxability
Exceptions
Product Taxability in States & Jurisdictions is not consistent
throughout the United States
The following industries have varying taxability rules:
Software / Hardware
Digital Goods
Services
Medical device / equipment
Food / Beverage
Clothing / Apparel
School Related Products
Dietary Supplements
And many other industries / products!
Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
16. The Ecommerce Sales Tax Challenge
Automate with Technology
Top 10 Compliance Tips
Avalara at a Glance
Administrative Console Demonstration
Agenda
Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
17. HIGH COST LOW COST
The Manual Continuum
Sales Tax
Detailed
Consumers Use
LOW RISK
outsourced Automate with
jurisdictional Cloud-based
Tax
research and technology Compliance &
calculations Low Risk / High Value Remittance
Exemption
Diligent but wasteful Certificate
Management
A company using automated
sales tax
no
manageme
HIGH RISK
solutions nt system,sales tax
for all research, ge
functions breaks out of the
but not a neralized tax
web-service calculations
manual method
continuum, instead residing
hiding from
in a low-cost,&
expensive low-risk ‘sweet
reality
inaccurate
spot’.
Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
18. Benefits of Cloud-based
Lower
TCO
Eliminates
Maintenance Sales Tax Technology
Automate Higher Level Customer Benefits
Scalable non-revenue Of Compliance Reduces
processes Complexity
Pricing
Speed to Ease of
Market Integration
Efficiencies of SaaS
Reduced Access
Audit Lower Anywhere
Improved
Risk Support Customer
Costs Relationships
Ease of Accelerated
Use Releases
Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
19. The Ecommerce Sales Tax Challenge
Automate with Technology
Top 10 Compliance Tips
Avalara at a Glance
Questions?
Agenda
Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
20. Summary of Compliance Tips
Top 10 Tips to Reduce Penalties & Audit Exposure:
Complete a Nexus Study
Solution that delivers ‘Roof-Top’ Accuracy
Leverage the appropriate Sourcing Rules
Automate Sales Tax Updates
Product Taxability Coverage
Centralized Access to Reporting & Transaction History
Outsource Filing
Consistency Across Platforms (ERP, POS, Mobile)
Report Consumers Use Tax
Automate Exemption Certificate Management
Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
21. The E-Commerce Sales Tax Challenge
Automate with Technology
Top 10 Compliance Tips Glance
Avalara at a Glance
Questions?
Agenda
Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
22. About Avalara
Started in 2004; 300+ Employees
7,500+ Customers Today
End-to-End Sales Tax Solution for Calculation, Certs & Returns
Professional Services: Nexus Study, Registrations, Audit Defense
Certified Provider Streamlined Sales Tax (SST) Project
Inc. 500 Fastest Growing Companies; 2010
Deloitte Technology Fast 500; 2010, 2011
Microsoft ISV Partner of the Year 2010
AvaTax Connector Certified for PrestaShop
Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
23. Avalara Solutions for End-to-End Compliance
Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
24. Clete Werts http://www.avalara.com
OEM-ISV Manager http://developer.avalara.com
E-commerce Team
t: 503-747-7644
clete.werts@avalara.com
Questions?
Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
Notes de l'éditeur
Non taxable as it’s below the $55 threshold rule in New York for State & City sales tax rates
Taxable only at the State and Metro Transit Special Taxing Jurisdiction Rates, still exempt on City tax.
Now it’s all fully taxable which includes the City sales tax rate as the transaction goes over the $110 threshold rule for New York City.
Digital downloadable Non-taxable
If you buy the physical media at a store - Taxable
What if you buy both the downloadable version and physical media - Taxable
High Cost/Low Risk – You hire outside firms. They charge you a fortune to be in compliance. Because of the costs, you limit what you do and never really have that full solution.Low Cost / High Risk – You generally do the minimum amount, or nothing at all, and hope that you get by and never run into an audit. High Risk / High Cost – This is where many businesses are today. They hire people with no experience at all in dealing with sales tax and assume that they can do the job for them.Avalara – Low Cost, Low Risk. Free up resources to work on things that are more valuable.