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PrestaShop Barcamp 5 - Avalara : Keeping Compliant in the Changing Landscape of Internet Sales Tax
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  • Non taxable as it’s below the $55 threshold rule in New York for State & City sales tax rates
  • Taxable only at the State and Metro Transit Special Taxing Jurisdiction Rates, still exempt on City tax.
  • Now it’s all fully taxable which includes the City sales tax rate as the transaction goes over the $110 threshold rule for New York City.
  • Digital downloadable Non-taxable
  • If you buy the physical media at a store - Taxable
  • What if you buy both the downloadable version and physical media - Taxable
  • High Cost/Low Risk – You hire outside firms. They charge you a fortune to be in compliance. Because of the costs, you limit what you do and never really have that full solution.Low Cost / High Risk – You generally do the minimum amount, or nothing at all, and hope that you get by and never run into an audit. High Risk / High Cost – This is where many businesses are today. They hire people with no experience at all in dealing with sales tax and assume that they can do the job for them.Avalara – Low Cost, Low Risk. Free up resources to work on things that are more valuable.

PrestaShop Barcamp 5 - Avalara : Keeping Compliant in the Changing Landscape of Internet Sales Tax Presentation Transcript

  • 1. Keep Compliant in the Changing Landscape of Internet Sales Tax Clete Werts OEM-ISV Channel Manager © Copyright Avalara, 2012Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
  • 2. The Ecommerce Sales Tax Challenge Automate with Technology Top 10 Compliance Tips Avalara at a Glance Questions? AgendaClete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
  • 3. 11,000+ distinct tax jurisdictions in North America 100,000+ distinct taxability rules Exempt Products Exempt Organizations Tax Holidays Thousands of changes each year State-provided info often missing, misleading, or wrong Sourcing rules differ Nexus triggering rules vary and legislation is changing for Internet Purchases!!Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
  • 4. The Sales and Use Tax Landscape for Internet Retailers Massive state More than 16 states have budget pressures enacted or are considering Internet Sales Tax legislation Federal Pressure Increased State to legislate Enforcement Internet Sales Tax Activities collectionClete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
  • 5. States define Nexus as a ‘tangible physical presence’ which creates the requirement to collect & remit Sales Tax. Nexus triggering events can include: Traveling Salespeople Agents or Distributors Employees on Payroll Training Trade Show Attendance Inventory / Warehousing Servicing Tangible Personal Property AffiliatesClete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
  • 6. 6 5ZIP Codes don’t mean zip 1 4 3 2 LOCATION 1 2 3 4 5 6 TOTAL 4.0% 7.5% 5.1% 7.0% 8.1% 6.6% SCIENTIFIC/CULTURAL 0.1% 0.0% 0.1% 0.1% 0.1% 0.1% REGION TRANSIT DISTRICT 0.0% 0.0% 1.0% 0.0% 1.0% 1.0% FOOTBALL DISTRICT 0.0% 0.0% 0.1% 0.0% 0.1% 0.1% CITY 0.0% 3.6% 0.0% 3.0% 3.0% 1.5% COUNTY 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% STATE 2.9% 2.9% 2.9% 2.9% 2.9% 2.9%
  • 7. A State by State Look at Sourcing Rules Sourcing determines the location (situs) of a sale and what jurisdiction the tax collected from a transaction is owed • Origin-Based States for Products (Services Destination) – Arizona, Illinois, Missouri, New Mexico, Ohio, Pennsylvania, Tennessee, Utah, Virginia • Mixed Source States – California • Counties are Origin-based; Cities & STJs are Destination-based – Texas • Cities and Counties are Origin-Based based; STJS are Destination-based • Destination-Based States – All the RestClete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
  • 8. Taxable or Non-Taxable in New York? Price $50Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
  • 9. Taxable or Non-Taxable in New York? Price $85Clete Werts – Avalara | Making sales tax less taxing
  • 10. Taxable or Non-Taxable in New York? Price $125Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
  • 11. Taxable or Non-Taxable in CA? Download Adobe Acrobat 9 Pro Extended https://www.adobe.com/downloads/Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
  • 12. Taxable or Non-Taxable in CA?Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
  • 13. Taxable or Non-Taxable in CA? Download Adobe Acrobat 9 Pro Extended https://www.adobe.com/downloads/Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
  • 14. Understanding Product & Service Taxability Exceptions Product Taxability in States & Jurisdictions is not consistent throughout the United States The following industries have varying taxability rules: Software / Hardware Digital Goods Services Medical device / equipment Food / Beverage Clothing / Apparel School Related Products Dietary Supplements And many other industries / products!Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
  • 15. The Ecommerce Sales Tax Challenge Automate with Technology Top 10 Compliance Tips Avalara at a Glance Administrative Console Demonstration AgendaClete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
  • 16. HIGH COST LOW COST The Manual Continuum Sales Tax Detailed Consumers Use LOW RISK outsourced Automate with jurisdictional Cloud-based Tax research and technology Compliance & calculations Low Risk / High Value Remittance Exemption Diligent but wasteful Certificate Management A company using automated sales tax no manageme HIGH RISK solutions nt system,sales tax for all research, ge functions breaks out of the but not a neralized tax web-service calculations manual method continuum, instead residing hiding from in a low-cost,& expensive low-risk ‘sweet reality inaccurate spot’.Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
  • 17. Benefits of Cloud-based Lower TCO Eliminates Maintenance Sales Tax Technology Automate Higher Level Customer Benefits Scalable non-revenue Of Compliance Reduces processes Complexity Pricing Speed to Ease of Market Integration Efficiencies of SaaS Reduced Access Audit Lower Anywhere Improved Risk Support Customer Costs Relationships Ease of Accelerated Use ReleasesClete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
  • 18. The Ecommerce Sales Tax Challenge Automate with Technology Top 10 Compliance Tips Avalara at a Glance Questions? AgendaClete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
  • 19. Summary of Compliance Tips Top 10 Tips to Reduce Penalties & Audit Exposure: Complete a Nexus Study Solution that delivers ‘Roof-Top’ Accuracy Leverage the appropriate Sourcing Rules Automate Sales Tax Updates Product Taxability Coverage Centralized Access to Reporting & Transaction History Outsource Filing Consistency Across Platforms (ERP, POS, Mobile) Report Consumers Use Tax Automate Exemption Certificate ManagementClete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
  • 20. The E-Commerce Sales Tax Challenge Automate with Technology Top 10 Compliance Tips Glance Avalara at a Glance Questions? AgendaClete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
  • 21. About Avalara Started in 2004; 300+ Employees 7,500+ Customers Today End-to-End Sales Tax Solution for Calculation, Certs & Returns Professional Services: Nexus Study, Registrations, Audit Defense Certified Provider Streamlined Sales Tax (SST) Project Inc. 500 Fastest Growing Companies; 2010 Deloitte Technology Fast 500; 2010, 2011 Microsoft ISV Partner of the Year 2010 AvaTax Connector Certified for PrestaShopClete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
  • 22. Avalara Solutions for End-to-End ComplianceClete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop
  • 23. Clete Werts http://www.avalara.com OEM-ISV Manager http://developer.avalara.com E-commerce Team t: 503-747-7644 clete.werts@avalara.com Questions?Clete Werts – Avalara | Making sales tax less taxing March 20, 2012 - Barcamp 5 PrestaShop