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Sales and Use Tax Activity Heats Up in 2013

Bruce Krumlauf, CCHNo one expects anything from state and local government other than more aggressive efforts to collect sales-and-use taxes from businesses operating within their jurisdictions. With taxation of Internet sales expected to become a reality at the state and federal levels, companies are going to need tools to handle the increased scrutiny.

While many CPA firms have not dealt with sales-and-use tax issues, their clients are going to turn to them for advice. "They don't want to say ‘I can't help you,'" says Brian Austin, who handles the CPA program for Bainbridge Island, Wash.-based Avalara. That doesn't mean all CPAs need to become experts on these topics. But Austin believes firms must know where to send their clients for help.

So with activity ramping up, the year 2013 is going to be one in which companies that deal with CPAs, particularly Avalara and CCH, are going to ramp up the rate at which they knock on firms' doors offering assistance

CCH had been fairly quiet in its sales-and-use tax efforts since purchasing the former SpeedTax in November. But the company says the customer base has increased by 150 percent since the acquisition as CCH integrated SpeedTax into its CorpTax product line. SpeedTax is now known as CorpTax SaaS.

CCH has also been busy since the purchase of SpeedTax in strengthening the links to major products. That's important because the name of the game is getting links to other packages, such as accounting software, ecommerce and point-of-sale systems that enable these products to take advantage of the data and calculations provided via the sales and use tax applications.

"We've enhanced the NetSuite integration and completely redid the integration of [Microsoft's] Dynamics Ax," says Bruce Krumlauf, product manager for CCH's sales-and-use tax products. "We had a brand new integration to AX in 2012."

Jessica Balfour, a product marketing manager for the line, promises more links more marketing activity this year. Besides working with Microsoft, she says her company has also had success working with Oracle and SAP. "We will focus on building partnerships," Balfour says. "You will see us promote and go to market alongside the partners in 2013."

Avalara continues to add to the number of applications that integrate with its AvaTax product line. Its website lists 55 integrations for ecommerce products, 68 for accounting software, five for mobile applications and eight for point of sales systems with some of these from companies with entries in more than one category.

Although Avalara expects to continue signing partners this year, it is ramping up efforts elsewhere because while CCH is a global company known for its content, Avalara, at this point is neither. It expects to rectify that and is taking its first steps globally in planning a London office and an entry into Europe.

Europe means Value-added Taxes and Avalara already handles those, says Marshal Kushniruk, VP of business development. Kushniruk, who is moving to London to run the European effort, says, "We calculate VAT FOR 72 countries today and we are looking to position ourselves as the global transaction tax leader." The company's products can also handle returns in 38 countries and it expects to increase the numbers in both areas.

To beef up content, Avalara recently purchased UPC Matrix Master from Tax Matrix. The database provides taxability content and tax rates behind 10 million UPC codes. Large retailers will continue to purchase access to the database via subscription. However, Avalara is also integrating it into its product line to reach smaller organizations.

"The retailer no longer has to match the products they sell to the tax categories to get tax decisions made," says Kushniruk.

CCH will be working on increasing functionality, including providing better lookups with rates and decision making reporting. Abbreviated Radar, the new capability will replace all legacy Zip lookups, says Krumlauf. "It is not intended for the really light weight looks up," he adds. "It gives you deep lookups of all the jurisdictions."

The company is providing rates-only lookups, but also those for complete taxability with "much more granularity," he continues. Users will also have the ability to create a search and use it as a template.

CCH also plans to add more vertical products. It already has what Krumlauf calls "deep coverage of food and restaurant industries." That is provided through its point-of-sale portal product. Information can be extracted and imported into POS systems for delivery to retail locations.

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