Sales and Use Tax Compliance for the QuickBooks® User

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mail: P.O. Box 509 Eau Claire, WI 54702-0509 • telephone: 866-352-9539 • fax: 715-802-1131email: customerservice@lorman.com • website: www.lorman.com • seminar id: 403982

Matthew Hammond Avalara

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Sales and Use Tax Compliance for the QuickBooks® User

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mail: P.O. Box 509 Eau Claire, WI 54702-0509 • telephone: 866-352-9539 • fax: 715-802-1131email: customerservice@lorman.com • website: www.lorman.com • seminar id: 403982

Prepared By:Matthew Hammond

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Matthew Hammond 

National Sales Manager(919‐627‐9784)

matthew.hammond@avalara.com

Get compliant with sales tax in 2018!

Integrated

600+ integrations into ERP, POS, ecommerce, billing, 

and CRM systems 

Efficient

Born and managed in the cloud: real‐time updates to sales tax rules and rates

Accurate

End‐to‐end tax compliance solution: calculation, tax document management, and returns

(c) 2014 Tax Technology Group, Inc.

Learning Objectives

Why should I care about sales & use taxes?

What technology solutions are available to assist?

Which type of solution is right for my organization?

What can I do to ensure a technology project is successful?

Q&A

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Sales & Use Tax Overview

©Avalara. Confidential and proprietary. 4

Your company is responsible for collecting & remitting sales tax on behalf of it’s customers for taxable sales.

Over 12,000 taxing jurisdictions in the United States.

Exceptions:

•Product / service‐based statutory exemptions.

•Customer‐based exemptions (exemption certificates).

•Taxability exemptions vary by state.

Key transaction inputs:

•WHO ‐ Customer (determination of customer‐based exemptions).

•WHEN ‐ Invoice date (tax rate determination).

•WHERE ‐ Ship‐to, ship‐from, order acceptance  addresses (taxing authority, or “sourcing”).

•WHAT ‐ Product / service (determination of product‐based exemptions).

Nexus – where should you be collecting sales tax?

Calculation and Reporting

Product and Service Taxability

Jurisdictional Rate Assignment 

Exemption Certificate Management

Sales Tax Returns

What are the Elements of Your Compliance Profile?

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A   G ROW ING   L I S T

NEXUS‐CREATING ACTIVITIESNEXUS‐CREATING ACTIVITIES

Affiliates

Trade shows

Commissions to resellers 

Investors / board meetings

Marketing / web advertising

Drop shipments

Multistate locations

Affiliates

Trade shows

Commissions to resellers 

Investors / board meetings

Marketing / web advertising

Drop shipments

Multistate locations

Maintenance / service / repairs

Owned / leased real property

Hosted data centers

Field sales / service staff

Licenses / royalties / fees

Direct / online sales

Inventory

Maintenance / service / repairs

Owned / leased real property

Hosted data centers

Field sales / service staff

Licenses / royalties / fees

Direct / online sales

Inventory

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7©Avalara. Confidential and proprietary.

Why is sales tax management so hard?

Content Changes

Transactions

Government Filings

Records

Rate / Jurisdictional Changes

Business Processes

Multiple Systems

Filings & Deadlines

Payments and Receipts

Collections 

Real‐Time Requirements

Immediate Determination

24/7/365 accuracy required

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©Avalara. Confidential and proprietary.

Understanding sourcing rules – “situs”

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Origin‐based states for products (destination‐based for services) 

Arizona, Illinois, Missouri, New Mexico, Ohio, Pennsylvania, Tennessee, Utah, Virginia

Mixed source states

California Counties are origin‐based; Cities & 

STJs are destination‐based Services are always destination‐

based

Texas  Cities and counties are origin‐based 

based; STJs are destination‐based Some services are destination‐

based

Destination‐based states

All the Rest

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ZIP Codes: The Wrong Tool for the Job

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Taxing jurisdictions don’t always follow ZIP Codes!

Individual counties and municipalities levy sales taxes in addition to state rates

Tax rates can vary significantly within a ZIP code

ZIP codes Are a blunt instrument for determining sales tax rates and boundaries

Will almost certainly lead to calculation mistakes.

Can lull you into a false sense of security

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©Avalara. Confidential and proprietary. 11

What Does This Mean for the Amazon FBA Merchant Seller?

Amazon FBA States

Means state has no sales tax

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©Avalara. Confidential and proprietary. 12

Thank you for using Avalara! What did you do en route to the office today?

• Bought a coffee

• Filled up your car with gas

• Made a few calls on your way into the office

• Did you purchase bagels?  

• Less than 6 or more than 6?

• Sliced or whole?

Avalara will calculate more than 6 billion transactions this year, most days you probably use 

us and didn’t even know it.

Step Two:  

Configure your administration console for all of your business units, product lines, or connected solutions

Step One: 

Connect Avalara into any one of your order entry points

• ERP, E‐Commerce, Billing, CRM, POS, or all of the above

Cloud Based Connected System

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AvaTax does not support cash basis accounting ‐ must be accrual

TransactionalData

Returns & Remittance

Rates & Rules

Connector

How AvaTax works ‐ a Tax Engine in the Cloud

Avalara Tax Decision

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Address Validation

Lat/Long Conversion

Reference Your Nexus Profile

Rate Assignment• Sourcing rules, tax holidays, thresholds

Product Taxability Laws• Thousands of Avalara managed tax codes

Exemption Certificates

Real Time Tax Decision

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POSPOS

eCommerceeCommerce600Pre-builtintegrations

+

including all major ERPs

ERPERP

CRMCRM

Avalara Integrations and Ecosystem

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Implementation Overview

Estimate: 5 minutes Estimate: 5 ‐ 60 minutes Estimate: 20‐60 minutes

Calculate Tax

Estimate: 5 minutes per jurisdiction

Estimate: 5 minutes Estimate: 60 minutes

Remit Tax

Implementation Expert with Quick Start

Avalara Help CenterWebinars, Videos, How To

5 Steps to Reduce Risk

1. Evaluate where you have collection responsibilities (Nexus) and on which products and services you provide.

2. Ensure systems are properly tax sensitized/front‐line resources understand the importance of accurate information.

3. Objectively evaluate the costs and risks of your current sales and use tax environment. 

4. Evaluate technology solutions – objectively determine the must haves from the nice to haves!

5. Make sure you have buy‐in from all impacted internal stakeholder groups on technology/process improvement projects. 

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Notes