Estimated reading time: 17 minutes, 46 seconds

I know. It’s almost the end of tax season and here I go telling you to add another item to your to do list. But wouldn’t you rather have me messing with your workload than a state tax auditor?

Members of our profession have been burying our collective heads in the sand when it comes to sales tax. We just don’t worry about this bothersome, nit- picky tax and expect our clients to handle this one on their own.  Sure, we review their sales tax liability account at the end of the year. But paying the amount reported on the sales tax return is the easy part.

With states desperate for revenues and businesses desperate for expansion into new markets, we are going to see increased sales tax assessments for our clients.  State auditors will be looking at nexus issues, but will also be seeking to identify use tax liability. This is an area where most small and medium businesses are at risk.  Once they identify the use tax due, they will look at the sales taxes being collected by these businesses. From there, they will move on to your client’s customers and vendors and in no time their coffers will be full of revenues.  Your clients will be left struggling to cover the added expense and repairing any damaged customer relationships.

Sales tax compliance involves a number of critical decisions – many of which are made at the point of sale.  Wrong decisions at any point in the process can leave your client at risk for audit adjustments that convert a pass-through tax into a profit killer.  At a time when every sale is precious, no one wants to see their client hit with a big audit assessment.

Now is the time to help your clients get a handle on sales tax.  Fortunately, you can help them without having to hire an army of sales tax experts. You can turn to our group of sales tax vendors, each of whom provides a slightly different option for helping your clients keep the auditors at bay.

These are the areas where an automated solution can assist your clients:

·         Determining what’s taxable.
·         Deciding who to pay.
·         Deciding what rate to apply.
·         Paying and computing use tax.
·         Preparing and filing returns.
·         Remitting taxes to the proper jurisdiction.
·         Managing exemption certificates.
The solutions

Let’s take a look at the vendors (in alphabetical order) who are helping businesses address the complexities of sales tax management. The offerings vary in depth, method of deployment, focus, and pricing but all offer benefits for CPAs looking to deliver better client service and help their clients reduce audit risk.   Many of the vendors also offer revenue opportunities for firms who wish to function as their clients’ sales tax service bureau.

Avalara – AvaTax

Avalara was the first of the reviewed sales tax management solutions to apply the software as a service (SaaS) model to sales tax. They started offering SaaS before anyone knew what those two little “a’s” between the two capital “S’s” stood for. They rolled out their hosted solution, now called AvaTax OnDemand , in 2004. At that time they began offering accounting application plug-ins to compute sales tax at the source – during invoicing. Incidentally, they also offer an option, called AvaTax OnSite for those companies (some might call them luddites) who want their entire information resident on their servers. Avalara will be launching their Accountants Advantage Program shortly and hope to enlist accountants as influencers and resellers of their solutions.  Avalara can address virtually every aspect of the sales tax compliance challenge through a combination of one or many of their offerings:

1. Taxability, rate, and jurisdictional decisions are handled by the addition of AvaTax Pro to AvaTax OnDemand . Their solution offers jurisdictional accuracy to the street level. 

2.      If you just want to get information on the correct rates to apply, you have a choice of three different options : AvaRates Now for individual item lookups, you can access their AvaRates Database and lookup a batch of transactions, or you can integrate the rates into your ERP application using AvaRates Database Connect.

3.      Use tax compliance can be addressed using the “universal connector” included in their AvaLink desktop application. 

4.      When it comes to use tax, few vendors offer integration to the AP module, but Avalara has a desk-top solution calledAvaTax CU that does just that.  

5.      Payment, filing and remittance are handled by one of three product offerings: AvaFile, TrustFile, or LaserBridge. AvaFile is an addition to the AvaTax OnDemand solution which is designed to manage sales and use tax returns and remittance. The TrustFile solution is a streamlined filing and payment only option for companies who have less complex needs. And finally, for those clients who just want to prepare a form, they can turn to Avalara’sLaserBridge offering to do just that. 

6. Your clients can also store exemption certificate information via the ECMS (exemption certificate management system) component of the AvaTax OnDemand dashboard and have plans to extend their workflow capabilities in the future.   Author’s note: After writing all of the above information, I can’t help but wonder how many combinations  you can make by using “Ava” in concert with other words to form a product name. I am starting to think of “Ava” as a very prolific mother, akin to Nadya Suleman with her 14 children, minus that scary obsession and without the bad parenting skills.

AvaTax OnDemand currently integrates with more than 85 small and medium sized accounting software applications including offerings from Microsoft, Sage, Intuit, NetSuite and many others. They have continued to expand the depth of their offering by purchasing all of the components that influence accurate sales tax compliance, filing, and remittance.  Avalara offers a free rate calculator on their website, and share current information and interesting perspectives on their blog www.salestaxbuzz.org.

BNA Software -- Sales & Use Tax Rates and Forms

BNA has a long history of providing tools for CPAs. Their straightforward, checklist-based reference guides were certainly a staple of my early years in public accounting. You might expect them to make the process of sales and use tax compliance a snap for companies and their accountants and when it comes to rates and return filing that is the case.  Here’s what BNA offers your clients:

1.      BNA Sales & Use Tax™ Rates Online is a Web-based solution that pushes rates to your application on demand. The system prompts you when it’s time for a new update at which point you can export the information for use in your application.

2.       There is an optional CD version of BNA Sales and Use Tax Rates if you happen to be one of the unfortunate 4 people on the planet who is still without a decent Internet connection. 

3.       If you have tired of completing and mailing those old paper-based forms, BNA Sales & Use Tax Forms might be the solution for you. They provide online access to an extensive library of over 3400 forms, which can help you quickly get your clients on the right track with state, city and local jurisdictions. Their library includes exemption certificates, business registrations, and power of attorney forms in addition to those pesky sales tax returns. Their built-in calculations can also help to improve the accuracy of any filings.

BNA makes a single copy of their complete forms library available for the bargain price of $925 for a year’s subscription plus updates. If you need the rate service as well, you can add that for another $925 a year. Both products can be ordered online and include a year’s worth of telephone support. (But if you need technical support to type information into a form, you might consider hiring a young person to handle that job for you.)

CCH, a Wolters Kluwer business -- CorpSystem Sales Tax Online

CCH, now part of Wolters Kluwer, is known for its research tools, so it’s no surprise that their sales tax solutions put a heavy emphasis on taxability rules and research. They offer a web-based application for completing monthly returns (supported by a team of outsourced professionals) but the majority of their tools are desktop deployable with integration available for a select group of accounting applications.  They don’t just offer product information; they also have a team of experts who are ready to assist you or your clients with issues that go beyond basic compliance challenges.

CCH, as a part of Wolters Kluwer has the buying and marketing muscle to offer a wide list of solutions so your biggest challenge might just be navigating through the long list of sales tax solutions offered on their website.

These are the areas where CCH/Wolters Kluwer can help your clients cope with the trials of sales tax compliance:

1.      CorpSystem® Sales Tax Office is their core application. Sales Tax Office is a desktop solution that can be used stand alone or integrated with your accounting application. It captures transactions at the point of entry and logs them for use in month end reporting. Tax rates are updated monthly via an upload.

2.       For retailers struggling to comply at the point of sale, CCH offers tools in its “ZIP” family of products which include the stand alone CorpSystem® ZIPSales Lookup, and Corpsystem® ZIPSales Database. These tools provide tax rates by zipcode.

3.       If you are using Microsoft Dynamics AX, Microsoft Dynamics GP, Microsoft Dynamics SL, Sage Accpac  ERP, Sage MAS 500, or Sage MAS 200/90 you can upload sales and use tax rates into your application using CCH's Sales Tax Load Utility.

4.       When it comes to filling out sales tax returns, CCH’s CorpSystem® Sales Tax Returns Online lets you review, edit and print returns via their online offering.

5.       If you’re worried about keeping track of exemption certificates, CCH has partnered with Imaging Science and Services, Inc. (ISSI) to offer the Tax Exemption Administrative System (TEAMS) to manage both sales tax exemption certificates and resale exemption certificates.

You might want to talk with one of the CCH sales representatives for assistance in choosing the right solution to meet your particular needs.

Electronic Sales & Use Tax, Inc. — eFileSalesTax.com
The name says it all. This is a no frills solution for clients who just need to transmit their returns and in some cases their payment. This solution is all about filing returns – although it is currently only available for filings in Florida, California and Illinois. The company offers a QuickBooks import feature to populate their electronic form but the majority of their clients just go online and type summary information into a form which is then validated before transmission to the state.
One unique aspect of this offering is that clients can pay by the form. In California, they pay the bargain rate of $6.95 per form, with different pricing models available in other states.  Another benefit of particular interest to procrastinators is that they can enter their information at 11:59 on the day it is due and still meet the return filing deadline. Clients have the option to mail a check in directly or to have eFileSalesTax.com remit it electronically along with their sales tax return.  The company has 50,000 registered users in California which means they have done their part to reduce the number of trees sacrificed in the name of sales tax. The company has had some success in Florida with CPAs using their service to file returns for multiple clients -  they offer  special pricing for this purpose.
FileYourTaxes.com — California Sales
Tax If you’re looking for a quick return filing solution for California, this website might be just the thing for you. www.FileYourTaxes.com lets you file your first three California Sales and Use Tax returns free. After that you pay nine dollars per return to electronically file them on their website.

FileYourTaxes.com began as an individual tax return filing service and has broadened their offering to include more business filings. You complete the return online and they file it for you. Don’t expect any services or tax law support from this site, they expect you to be able to capture and enter your own information correctly.

SpeedTax, Inc - SpeedTax

SpeedTax offers a web-based sales tax solution that is double certified by the SSUTA (Streamlined Sales and Use Tax Agreement) member states. Whether you believe that all 50 states will ever come together to hold hands and sing Kumbaya around the sales tax revenue bonfire or not, you can still benefit from the SSUTA certification process. The certification is a multi-state seal of approval for vendors who have been through the process. A complete list of SSUTA certified vendors is at the end of this article.

As the second company to offer a web-deployed option, SpeedTax has helped to redefined sales tax compliance. Their well-designed screens and dashboard make it easy for their customers to configure their solution while their integration with leading accounting applications ensures that the correct amount of tax is computed on each invoice. They also offer a multi-client view for accountants who want to review or manage their clients’ sales tax compliance.

CEO and founder Anton Donde is no stranger to the service bureau model as he previously built and eventually sold a web-based payroll solution. As for marketing, with a name like SpeedTax, I fully expect the company to be sponsoring a NASCAR driver any day now. (Excuse me, are my redneck roots showing again?)

SpeedTax offers the following components to help companies meet their sales tax burden from the source transaction through to filing and remittance:

1.       To manage sales tax compliance from the source transaction to tax calculation, SpeedTax CORE, is the solution for you. Starting at the source transaction via integration with key ERP, Ecommerce, and Point of Sale solutions, this SaaS offering allows customers to manage every aspect of sales tax compliance via a dashboard. Transactions are checked against a comprehensive rules engine that considers addresses, jurisdictions, exemptions, and rates.

2.       You have options to use SpeedTax PLUS as a stand alone review and approval, return submission, and remittance processing solution or to combine it with the SpeedTax Manager CORE solution.

3.       Designed especially for tax professionals, SpeedTax PRO offers a specially designed dashboard that allows professionals to manage and review sales tax compliance for multiple clients.

SpeedTax also offers a risk assessment questionnaire at www.salestaxquestionnaire.com.

The questionnaire can be quickly completed online to generate a report that visually displays any areas of potential risk. The report is designed to be forwarded directly to a client’s tax professional for assistance in correcting any identified weaknesses.  SpeedTax is also working closely with their affiliated partners to help them with their sales, marketing, and PR efforts.

Taxcient

Taxcient is a company made up of former tax auditors. While that distinction won’t make them your first choice as the entertainment for your next holiday party, it does make them respectable as a sales tax solution provider. Their management team is a talented bunch with pertinent experience including CEO, Larry J. Wolfe, who left Intuit as a senior vice president in the tax division. They have a fairly narrow focus and are all about “The Science of Tax” (hence the name “Taxcient.”)

Their main claim to fame is vCert, their Exemption Certificate collection and management offering which is delivered as a hosted solution. Exemption Certificate management can be a huge issue for companies with high volume and multi-state reporting requirements.

I have to admit that I haven’t figured out their product naming convention. I’m not clear on the source of the “v” preceding each of their product names, but then I’m a CPA. What do I know about marketing and product naming?

1.      They can help your clients address rates, exceptions, and jurisdictional information via their vRates solution which delivers a monthly rate update over the Internet. Using vRates, you can perform tax rate lookups by zip-code.

2.      vCert helps businesses collect and manage Exemption Certificates. It uses a wizard to help employees determine which form of exemption certificate is appropriate, creates a database of completed certificates, and prompts for renewal of any expiring certificates.

3.      If you are dealing with retail businesses, you might want to look into their vCert Retail Edition which is designed to capture exemption certificates at the retail point of sale.

4.      If return filing is your client’s main issue, then you might want them to consider vReturn, a hosted application that prepares and files returns in 46 states. Data is imported from your accounting system, validated, and then used to prepare a sales and use tax filing for the appropriate state.

5.      In order to facilitate the flow of information from your client’s accounting software to their forms or rate calculations, you will need to take advantage of vCert Integration Services.

These solutions are aimed at larger organizations who have complex exemption certificate tracking requirements. The company also offers integration to Vertex, Taxware, and Sabrix, as well as high-end accounting software like Oracle and SAP.  Taxcient also has a blog that provides updates from the world of sales tax here http://blog.taxcient.com/.

Thomson Reuters -- ONESOURCE Sales & Use Tax

Thomson Reuters is another sales tax provider with roots in the information business. Their business includes industry publications as well as news organizations and countless reference guides for CPAs. The “ONESOURCE” name is a rebrand resulting from the combination of Tax Partners plus InSource Sales & Use Tax. I think the two lower case names when combined created a more powerful capitalized brand. It’s something like two vertically challenged parents giving birth to a star basketball player.

Thomson offers a wide variety of summary entry solutions – from a hosted return solution for smaller clients to their client/server option for those with more complex needs.  They also offer services.

Their solutions include the following:

1.       To automate the compliance function, companies can turn to ONESOURCE Sales & Use Taxwhich is installed on their server. Summary information is either entered directly into the return facsimiles that are provided or can be imported from an ASCII file. The system also includes tax rates which can be updated monthly via the web or a CD restore.

2.       If exemption certificates are a concern, Thomson offers ONESOURCE Exemption Certificate Managementwhich lets you create, digitally store and search exemption certificates.

3.       For smaller companies who want to purchase only the jurisdictions they need, ONESOURCE Sales & Use Tax Express RS edition might be the right solution. Using an import from an Excel spreadsheet, information for the selected jurisdiction quickly flows to the sales and use tax return.

4.      And for those tax preparers who can’t get through the day without a paper cut, Thomson offers a paper-based rate lookup solution.

Updates arrive via the mail monthly.  Thomson also offers integration with Sabrix for those clients who want a transaction calculation engine. Plans are in the works for what Thomson calls a “remote services” solution that will house the data, streamline the returns, and put control back in the user hands.

Streamlined Sales and Use Tax Certifications
According to www.streamlinedsalestax.org, “Four companies -- SpeedTax, Avalara, Exactor, and Taxware -- have achieved the distinction of being Certified Service Providers and two companies, SpeedTax and Taxware, have also achieved the distinction of being a Certified Automated System. All companies are under contract with the Streamlined Sales Tax Governing Board.”
Certified Service Provider (CSP)
An agent certified under the agreement to perform all the seller’s sales and use tax functions other than the seller’s obligation to remit tax on its own purchases.
Certified Automated System (CAS)
Software certified under the Agreement to perform part of the seller’s sales and use tax functions; must include ability to calculate the tax imposed by each jurisdiction on a transaction, determine the amount of tax to remit to the appropriate state, and maintain a record of the transaction. The seller is responsible for the maintenance of the seller’s data, the security of the system, and remitting the taxes collected.
Now that you’re in the know about sales tax...
Shake that sand out of your ears and get ready to help your clients minimize their exposure to sales tax audits, improve their invoice accuracy, and free up critical resources so they can add more value to their organization. Go ahead and put a check mark next to that sales tax item you just added to your to do list and be grateful that these sales tax vendors have made it so easy for you to look like a hero for your clients.

 

Geni Whitehouse CPA.CITP, CSPM
Geni Whitehouse, CPA.CITP, CSPM is the Founder of Even a Nerd Can Be Heard, an organization focused on communication skills for smart people.  With past roles ranging from partner in a CPA firm to leader of the technology practice in a firm, she has a wide range of experiences to share.  She is a former software company executive and industry analyst and a two-time graduate of the Jeff Justice Comedy Workshoppe. She is passionate about finding interesting ways to talk about what some might consider boring subjects and has discovered that there is no shortage of material. She is the author of How to Make a Boring Subject Interesting : 52 ways even a nerd can be heard.
Last modified on Sunday, 02 June 2013
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