adding sales tax to your accounting practice€¦ · the taxify advantage 50-state coverage...

Joni Johnson-Powe, JD, CPA & Andrea Steffes-Tuttle

Adding Sales Tax to

Your Accounting Practice

Your Presenters

Joni Johnson - Powe, JD, CPA Andrea Steffes-TuttleCEO 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


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.


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


Changing State Legislation Adds to the

Complexity: Expansion of Nexus


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


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

• Consulting Services

• Nexus determination

• Product taxation

• Sales tax audit defense

• Sales tax planning

• Transmission of tax collected

• Handling notices

• Account maintenance

• 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?


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?

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



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

• Identify potential future revenue

• Present staff expertise to support sales tax services.

1

3

4 2

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.



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

• Serve as the point of contact

• Be accountable for enhancing the service as needed

• Consistently communicate progress and monitor implementation

1

3

4 2

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



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

• Invest in staff and train them.

• Once model working efficiently and effectively, expand your sales tax client base.

1

3

4 2

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


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


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


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 Andrea Steffes-TuttleCEO of Taxnologi

[email protected]

303-955-5970

Marketing Director of Taxify

[email protected]

mailto:[email protected]

adding sales tax to your accounting practice€¦ · the taxify advantage 50-state coverage...

Documents