TaxConnex Sales Tax Blog

EYE ON Missouri Sales Taxes

Posted by Jeff Meigs on Wed, Feb 22, 2017 @ 10:30 AM

eye on missouri.pngThe Missouri sales and use tax is imposed on taxable retail sales of tangible personal property and certain services.  The statewide general tax rate is 4.225%. 

Cities and counties are authorized to impose sales and use taxes for various purposes. These local sales and use taxes are generally imposed in the same manner, on the same subject, and collected in the same way as the state sales and use tax. 

However, in many jurisdictions, the local use tax rate is less than the local sales tax rate.  This is unusual in the world of sales and use tax – in almost all states and local jurisdictions throughout the country, the sales tax rate is the same as the use tax rate.  The average local sales and use tax rate in Missouri is 3.66%. 

Missouri also has special taxing districts as follows:

  • Transportation development district sales tax;
  • County Transit Authority sales tax;
  • Museum district sales tax;
  • Fire protection district sales tax;
  • Theater, cultural arts, and entertainment district sales tax; and
  • Branson/Lakes tourism community enhancement district sales tax.

There are special/lower local rates on food and sales of qualified machinery and equipment used in manufacturing, while food and manufacturing purchases are entirely exempt from the state sales and use tax.  Further, there is no state or local USE tax imposed on qualified manufacturing machinery and equipment. 

Contrary to logic, Missouri requires that a paper sales and use tax paperwork piles.jpgreturn be filed when there are more than 150 local jurisdictions to report – there is no electronic upload option.  A paper return for a taxpayer with customers throughout the state can be as many as 50 pages.  An e-file option is available to those taxpayers with less than 150 local jurisdictions to report. 

Somewhat unique to Missouri is that sales and use tax are reported on different returns.  Sales tax is reported on form 53-1, vendor’s use tax on form 53-V and consumer’s use tax on form 53-C. 

With a combined average sales tax rate of 7.885%, Missouri is an average state from a sales and use tax burden perspective. However, compliance with Missouri’s local tax rates and filing requirements are a bit more taxing than most states. 

 Stay tuned for more of Jeff's EYE ON series as he blogs aboout sales and use tax State by State.

 

Topics: sales tax, Missouri

TaxConnex Honored at Bulldog 100 Dinner

Posted by Kate Bennett on Wed, Feb 08, 2017 @ 10:30 AM

TaxConnex was recognized as the No. 100 fastest-growing business owned or operated by a University of Georgia graduate during the 2017 Bulldog 100 Celebration February 4 at the Atlanta Marriott Marquis in downtown Atlanta.

 Bulldog 100 photo.jpg

TaxConnex founding Partner and UGA graduate Robert Dumas (BBA '84) center, with Partners Jeff Meigs and Brian Greer.

 

TaxConnex, “your outsourced sales tax department", is America’s leading independent sales and use tax outsourcing and consulting firm. Using a team of experienced tax and accounting professionals, TaxConnex provides sales tax outsourcing, sales tax consulting and VoIP tax service to businesses of all sizes with a focus on technology companies, small and mid-sized businesses, and VoIP providers.

 

The Bulldog 100, coordinated by the UGA Alumni Association, recognizes the 100 fastest-growing businesses owned or operated by UGA graduates.

2017 Bulldog 100 Class Photo.jpg

To recognize the 100 businesses and the 131 alumni who lead them, the UGA Alumni Association hosted the 2017 Bulldog 100 Celebration February 4 in Atlanta. The evening began with an exclusive reception for honorees hosted by FirstData, a global leader in commerce-enabling technology and solutions. This year’s keynote speaker was Debbie Storey, retired Executive Vice President of AT&T Mobility Customer Service and author of the book Don’t Downsize Your Dreams. Storey spoke about the importance of strong vision, adaptability and creative thinking in an ever-changing economic and technological landscape.

 

“The UGA Alumni Association is excited to honor our graduates who are founding and leading these prosperous enterprises,” Ruth Bartlett, president of the UGA Alumni Association board, said. “It is inspiring to see the influence these businesses have on our students. Student participation in Bulldog 100 allows our scholars a unique opportunity to network with these accomplished business leaders, and also to observe the best examples of success from people who once were where they are now.”

 

To view the complete list of 2017 Bulldog 100 businesses, photos from the event or nominate a business for the 2018 Bulldog 100, see www.alumni.uga.edu/b100.

 

Topics: Robert Dumas, Bulldog 100, University of Georgia

Super-Bowl Favorite Sees 20% Increase…

Posted by Noelle Ard on Thu, Feb 02, 2017 @ 10:30 AM

RISE UP ATLANTA FANS – Super-Bowl Sunday is just three short days away!  While I’ve been falcons.pngstudying up on Matt Ryan, Julio Jones, and the rest of the Falcons team, I’ve also been planning my Super-Bowl Sunday Snacks and I love some chips, salsa, and home-made guacamole.

 

Late last week, I heard some ramblings about our new administration and the fact that Mexican imports could soon be imposed with a 20% tax.   A 20% tax…wow that is steep.  A ripe green avocado which normally sells for around $1.50 could graze the $2.00 per piece rate because the best avocados are imported from Mexico.  How could this possibly be?  What did the helpless avocado do to us? 

 

Here’s the skinny:  White House Press Secretary, Sean Spicer announced last week that one of Trump’s ideas to fund the border wall is a 20% tax on Mexican imports.  The additional tax would raise $10 billion a year (which would easily pay for a border wall, which has an estimated cost of $8 - $20 Billion) – not to get political, but, I know that I wasn’t supposed to have to pay for that wall…but by taxing my favorite Mexican produce, it appears I am going to be paying for that wall. Hmm…. 

 

I wanted to do some more research and really get to the bottom of this.  Did you know that the US Department of Agriculture has indicated each year since 2013 that Mexico is responsible for almost 70% of our imported fruit and produce?  So while the proposed 20% tax would be assessed on the importer of such goods, you can rest assured that the impact will be passed down to the consumer. 

 

This means that fruits, and produce will increase in stores, as well as in restaurants, and then restaurant prices will increase to include the additional tax.  So while the avocado, in recent years, has shot to the spotlight of healthy produce, American’s may soon have a new reason to pass on the guacamole or avocado spring rolls with this new tax.  In addition to fresh fruits and produce, Mexico is also responsible for the following imports where American consumers would see a stiff increase:  Tomatoes, Beer, Tequila, and Sugar. 

 

How will Mexico react?  Word on the street is that just as our legislation is discussing this 20% increase in tax, Mexico could easily impose similar or more expensive tax tariffs on imports from the U.S.

 

So while you enjoy your Super-Bowl Sunday snacks, think about how your diet would be impacted by a 20% tax?  Will this tempt you to try your hand at gardening and growing your own fresh fruit and produce? Or do you see the potential impact as small enough that it isn’t worth all the hoopla?  Regardless, we at TaxConnex wish you an exciting and yummy Super-Bowl and have (with the help of Bobby Flay) included a recipe below for our favorite snack-time spicy guacamole!  http://www.cookingchanneltv.com/recipes/bobby-flay/spicy-guacamole.html

 

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Topics: sales tax

Arizona – Transaction Privilege Tax Simplification is HERE!

Posted by Noelle Ard on Thu, Jan 26, 2017 @ 10:30 AM

The long awaited day has finally come, the day in which all Sales & Use tax compliance addicts rejoice as Arizona finally rolls out the TPT Simplification.  That’s right folks, after a couple of false starts in recent years, TPT Simplification is LIVE on the Arizona website and I’m going to tell you all you need to know to quickly make the transition.

aztaxes.png

First things first – are you a new user?  If so, you will need to complete the New User Enrollment located at https://www.aztaxes.gov/Home.  Want to have some step by step help?  Check out the step-by-step tutorial by Arizona located here: https://www.azdor.gov/tutorials/enrollmentstart.html.  Arizona has done a fantastic job providing documentation and step by step tutorials for all aspects of this launch.

Need to file a TPT return?  Check out the step by step instructions and tutorial located here:  https://www.azdor.gov/tutorials/filingstart.html.  Not seeing your local level accounts or need some additional assistance with troubleshooting?  Check out this page and if you don’t see the tutorial you are looking for and you can browse on additional resources:  https://www.azdor.gov/tutorials/index.html.  If you choose additional resources, you will be provided with links to the AZ DOR website, the AZ DOR Education Website, and the AZ DOR YouTube Channel.

In addition to the tutorials listed above, the AZ DOR has a webpage designed specifically for TPT tax where you can find additional guidance, resources, and subscription opportunities.  To find this page, navigate to:  https://www.azdor.gov/TransactionPrivilegeTax(TPT).aspx

Here is a snippet from the page that provides insight into the information that you can find and the guidance available:

The State of Arizona and its Cities and Towns (Cities) continue to work together to achieve the goal of simplifying the manner in which taxpayers report and pay their Transaction Privilege Tax (TPT) through the centralization of licensing and reporting of TPT liabilities for all Cities with the Arizona Department of Revenue. 

  • The Arizona Department of Revenue (ADOR) is the central licensing and reporting for Transaction Privilege Tax (TPT), as required by law, effective January 1, 2017.
  • ADOR strongly encourages all businesses to register and file their transaction privilege taxes using AZTaxes.gov.
  • All businesses must file by location number on the city detail section of your return. The location number can be found on your TPT License. Taxpayers registered in AZTaxes may access their location list online.
  • State law requires businesses with more than one physical location in Arizona to file tax returns electronically via AZTaxes.gov (see A.R.S. § 42-5014.H.
  • ADOR no longer accepts the TPT-1 form for reporting periods beginning on or after June 1, 2016. Two new forms are available to accommodate location-based reporting for filing periods beginning on or after June 1, 2016. The TPT-EZ is a simplified tax form for businesses with one location or jurisdiction. The TPT-2 replaces the outdated TPT-1 for use by multi-location or multi-jurisdiction businesses. 
  • ADOR staff is available weekdays between 8 a.m. and 5 p.m. (M.S.T.) if you have questions or need assistance on using AZTaxes.gov, contact us toll-free at 1(844) 698-9176 or by email at AskTPT@azdor.gov.

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Topics: transaction privilage tax

The Rapidly Changing Landscape of Sales & Use Tax

Posted by Kate Bennett on Fri, Jan 20, 2017 @ 11:39 AM

Like self-driving cars, some things are best not 100% automated - sales and use tax is one of those things. 

In OPPORTUNITY IN COMPLEXITY, THE RAPIDLY CHANGING LANDSCAPE OF SALES & USE TAX, as seen in the latest supplement from Accounting Today, TaxConnex’s Managing Partner, Robert Dumas explains the importance of working with an experienced Sales Tax Outsourcing Service Provider, with a breadth of knowledge of sales and use tax accounting, and not solely a sales tax technology solution.

Robert Dumas AT.png

At TaxConnex we focus on providing service. Whether that be through our sales tax outsourcing practice or our consulting practice where we assist with sales tax nexus reviews, audits, VDA’s, and taxability reviews. Service is key – understanding clients’ issues, developing solutions, following through on our commitments, being responsive to questions and requests – all are critical. Technology complements the great service, but never replaces it.

 

Click below to read entire article in Accounting Today  

OPPORTUNITY IN COMPLEXITY

THE RAPIDLY CHANGING LANDSCAPE OF SALES & USE TAX


 

Topics: sales tax outsourcing

Sales Tax Returns Are Not Commodities

Posted by Brian Greer on Wed, Jan 18, 2017 @ 10:30 AM

I’m not sure when a sales tax return turned into a widget.  It seems that in the almost 17 years I’ve been in the sales tax compliance outsourcing business, sales tax returns have been treated like a commodity with contracts awarded all too often to the lowest cost provider.  My income tax brethren may feel the same way about the commoditizing of income tax returns.

 


I was reminded of this fact recently when a long standing customer asked me to reduce our fees in order to keep their business. 
Granted this is a client that we’ve successfully served for seven years who was outsourced to a low cost competitor prior to switching to TaxConnex seven years ago. The low cost competitor missed various filings, overpaid some jurisdictions, failed to take credits where applicable, and overall provided a poor level of service.  However, the current decision makers were not at this business seven years ago and did not feel the pain of poor service. 
commodity.jpg
They see a sales tax return and believe it’s a commodity and the lowest cost provider should get the work.

 

 


 

Commodity buyers gravitate to return prep providers.  Return prep providers do just that and only that – and sometimes they fail at that task.  Decision making is pushed back to the customer, risk is pushed back to the customer, flexibility is not allowed, and be ready for frequent turnover with the primary point of contact.

 

Contrarily, I believe that sales tax returns are not commodities.  I believe there’s a level of skill involved in preparing the returns.  I believe a reliable, consistent, and available point of contact is important.  I believe answering questions thoroughly and timely means something.  I believe providing sales tax guidance and expertise as part of the compliance service is important.

If you are currently outsourced to a return prep provider or are evaluating return prep providers, let’s talk.  There really is a better way.

The TaxConnex Difference

 

Topics: sales tax, sales tax outsourcing

Sales Tax Nexus and Drop Shipments

Posted by Brian Greer on Thu, Jan 12, 2017 @ 10:31 AM

TaxConnex held a webinar yesterday regarding sales tax nexus and drop shipments.   The webinar was organized into three topics:

  • sales tax nexus
  • new developments related to sales tax nexus – for example economic nexus and notification requirements,
  • and finally drop shipments

The discussion of drop shipments sometimes seems out of place with a nexus discussion; however, it’s critical to understand the role of sales tax nexus in determining how to manage drop shipment transactions.  Interestingly, most of the questions from the audience were related to drop shipment rules and how to exempt certain transactions from sales tax.

The real key piece to understand with drop shipments is that there are two distinct transactions involved.  drop shipment 3.jpg

Generally, there’s a sale between a manufacturer and a distributor where the manufacturer ships product to the distributor’s customer and invoices the distributor for the sale.  Sales tax applies based on the destination of where the product is shipped and if the manufacturer has sales tax nexus in that state then the manufacturer charges sales tax.

Separately, the distributor is making a sale to their customer.  Sales tax is applied based on where the product is being shipped and if the distributor has sales tax nexus in that state, then they charge sales tax to their customer.

For the distributor, a problem exists when the manufacturer has sales tax nexus in the destination state and thus charges sales tax; but the distributor does not have sales tax nexus in the destination state and therefore does not charge sales tax to their customer.  The distributor wants to exempt this transaction from sales tax by providing a resale exemption certificate to the manufacturer.  This resale exemption certification needs to be valid for the destination state.  This is where we take a turn…..

Some states, Georgia is one, will allow an out of state distributor to exempt the sale in Georgia with their home state resale exemption certificate or their home state sales tax id number on the Georgia resale exemption certificate.  California is not so friendly.  California requires a sales tax registration and a California sales tax id on the California resale exemption certificate.

For the distributor, and the manufacturer, it’s critical to know which states are like Georgia and which states are like California.  IPT publishes a bi-annual (every other year) guide that can help.  You can purchase this survey through IPT for $275 (https://www.ipt.org/IPT/Publications/Books_and_Surveys/IPT/Publications/Books%20and%20Surveys.aspx)  Sometimes the states are not entirely clear on the responses they provide to IPT and IPT does not attempt to interpret the responses from the various states.  For more thorough assistance, you might need the help of a sales tax firm like TaxConnex to understand exactly how to exempt various drop shipment transactions.

 

Want to hear more?

Download link to recorded webinar NOW. 

 

Topics: sales tax nexus, drop shipments

Sales Tax Outsourcing vs. Return Prep Outsourcing

Posted by Brian Greer on Thu, Dec 15, 2016 @ 10:30 AM

As sales tax outsourcing has grown in popularity, I sometimes see situations where the “service provider” (I use that term loosely as these are generally software firms that try to provide service) is misaligned with the requirements of the client. 

In the early days of sales tax outsourcing, it was all about return prep. 

Vendors focused on the large end of the market – Fortune 1000 businesses, who possessed significant in-house sales tax expertise.  These large businesses needed access to efficient return preparation, not sales tax expertise.  Many vendors thrived in this environment, building more and more efficient return preparation shops and reducing the overall cost per-return.  These vendors were successful at creating a commodity driven marketplace.

However, the large end of the market ultimately became saturated and vendors started moving downstream to the small and mid-size businesses.  These small and mid-size businesses often lack the internal sales tax department that their Fortune 1000 brethren possess. 

The wise vendors realized along the way that small and mid-size businesses need more than just return prep, they need guidance, advice, and access to people to address day-to-day sales tax questions. 

The return prep providers failed in this market and continue to fail today.

dinosaur.jpg

Unfortunately for some businesses, these return prep dinosaurs continue to push their return prep service to a market that requires something more. 

If your business does not have a dedicated sales tax resource, be wary of these return prep providers.  You will leave a large gap in your sales tax compliance process which ultimately translates into risk for the business. 

Look for services providers that can help with the day-to-day sales tax questions and issues:

  • I have nexus? 
  • Should I register? 
  • What should I do with this nexus questionnaire? 
  • How risky is it to take this position? 
  • What should I do about this audit notification? 

Return prep providers will not know how, or be able to address these questions for you.

 

The TaxConnex Difference

Topics: sales tax outsourcing

Sales Tax Compliance Outsourcing

Posted by Brian Greer on Thu, Dec 08, 2016 @ 10:20 AM

 

year end.jpgAs year-end approaches, it may be the perfect time to switch sales tax compliance outsourcing service providers.  (I use the term “service provider” loosely as many of the companies that provide sales tax compliance outsourcing are really software companies that aren’t good at providing service.)

Occasionally, businesses find themselves in a situation where their current sales tax provider is not meeting expectations.  Perhaps there’s an inability to reach someone on the phone or there are too many notices. 

Whatever the situation, year-end is a good time to make a change and allow the new service provider to begin the new tax year – which for sales tax means the January returns filed in February.

Something I’ve noticed through the years is that the transition from one provider to another provider is generally not as difficult as the initial outsourcing.  This is because during the initial transition, the business was required to document their filing calendar – tax id’s, filing frequency, e-file credential, etc. – and establish data feeds or Excel spreadsheets that represent their tax liability.  Once the process has been set-up and outsourced to a provider, it can more easily be “lifted” and moved to another provider.

If you’re in an untenable relationship, don’t let the fear of a difficult transition immobilize you.

This guide will provide you some key indicators that it’s time to make a change and also step-by-step instructions on how to make the transition simple.

  Thinking of Making a Switch?  Download Our Step By Step Guide

 

Topics: sales tax compliance, sales tax, sales tax outsourcing

Sales Tax Compliance - The Importance of Good Old Fashion Service

Posted by Robert Dumas on Tue, Dec 06, 2016 @ 10:57 AM

old fashion service-623920-edited.jpg

I heard a story about Chick-Fil-A on the radio this weekend that has reminded me about the importance of service.

My apologies in advance to Chick-Fil-A and the characters in the story to the extent I get the details wrong, but I believe I am getting the moral of the story right.  Here we go…at a strategy meeting of Chick-Fil-A executives, they were discussing the need for faster growth to fend off another competitor that seemed to be growing faster at the time.  After listening intently to the discussion, Truett Cathy – the much revered and respected founder of Chick-Fil-A – stopped the conversation and stated that he did not want to hear anything else about fast growth.  He wanted to discuss how Chick-Fil-A could get better.  He said if Chick-Fil-A gets better, the market will demand they get bigger.  Based on the results, I think Truett Cathy has proven he was right!

As the founder and leader of TaxConnex, I am always trying to push for faster growth.  I measure part of our success on year over year revenue growth because businesses with fast growing revenue are deemed more valuable and exciting. 

There is definitely truth in this, but fast growth does not mean the business is getting better at what they do. 

We see this in the sales tax compliance industry, which is dominated by fast growing technology companies.  These businesses have created and built software applications using the latest technologies – e.g., “the cloud” – and developed a very appealing message of push button simplicity.  There are definitely aspects of sales tax compliance that demand and require the latest and greatest software technologies, but there is a significant aspect of sales tax compliance that also requires good old fashion service.  

It is critically important for businesses in sales tax compliance to strive to get better whether we provide technology or service.

TaxConnex is a premier service provider that uses proprietary and licensed software solutions to manage the financial risk of all or part of a business’s sales tax compliance responsibilities.  I am reminded by Chick-Fil-A that my goal for fast growth will only be achieved if we constantly get better at what we do.  

 

The TaxConnex Difference

Topics: sales tax, sales tax service