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Growth & Taxes III: Open a New Location
- 2. Crowds with Cash Alternative Financing is a Mixed Moneybag of Opportunity for Small Business Hello! Welcome to MantaTrends: Up-to-the-minute small business webcast Thanks for joining us today. We’ll get started right at 2 p.m. EDT #mantatrends
- 3. Growth & Taxes: Open a New Location #mantatrends Sponsored by
- 4. @ivylmb How It Works @Manta Attachments Ask a Question For technical questions, email webinarhelp@manta.com
- 5. Are You Ready? • Are you profitable? • Do you have other key resources? • Can you duplicate your business?
- 6. Make a Plan • Location • Funding • Staffing • Hidden costs
- 7. Regional Sales Manager, Avalara Meet Sam Bedford
- 8. Sales Tax Compliance • New location, new tax rules • What is nexus? • Every state is different
- 9. Steps to Take • Factor in sales tax exposure and costs when evaluating locations • Contact DOR/BOE to start registration • Test your accounting system
- 10. Questions? Sponsored by Click on “Attachments” to get more information about our upcoming and on-demand webinars!
- 11. Manta believes in empowering small businesses to achieve success. We’re inspired by your determination and energy. And we understand that every company is unique. We strive to provide the marketing tools and educational resources you need to stand out, connect with your customers and your peers, and grow your business. Send us a note and let us know what you’d like to learn from upcoming webinars like this one. events@manta.com
Editor's Notes
- Lobby Slide CF CLICK at 2 p.m.
- IL Hello everyone and welcome to the MantaTrends webcast. My name is Ivy Lamb, and I’ll be your host for today’s event, “Grow Your Small Business: Add New Products and Services.” We’re happy to have you with us today, and we hope you’ll tweet about today’s event using hashtag mantatrends. Click to next slide
- IL Before we dive in, I want to cover some important housekeeping items about the event. Let’s first talk about your screen. During the webinar, you should see a slide area, which will allow you to view the webinar. On top of the slide area are three tabs, Ask a Question, Attachments, and Rate This. Click on the Ask a Question tab to ask a question any time during the webcast. We’ll do our best to respond during Q&A at the end of the event. If you’re having technical difficulties, please email webinarhelp@manta.com. My colleague Graham is answering your technical questions, so just send him a note. Click to next slide
- IL Are you truly in a position to manage the risk of opening a second location? Take a hard look at your actual profits Decide whether your current location handle the migration of key personnel/your attention Consider if your business is even replicable. If it is, what’s made your business successful and how will you duplicate that success at the new location? Click to next slide
- IL If you are ready to open a new location, it’s important to have a plan in place before you move forward. Manta recommends finding a mentor or other expert to help you with this process (reference SCORE?), but here are a few topics you’ll need to consider. Where will your new location be? Will it help your business reach new customers or expand into a new market? Is there existing competition nearby? Do some research to answer these questions before you settle on a specific area or building. How will you pay to get your new location off the ground? In most cases, it’s best to treat your new location as a separate venture financially, otherwise it could destabilize your first location. What positions will you need to hire for to staff your new location? Is there a pool of qualified candidates in the area you are looking at? How will you handle unexpected or hidden costs? If you plan ahead for potential budget overruns, you’ll be able to handle the unforeseen costs of the new location without going under. Click to go to next slide http://www.istockphoto.com/photo/it-s-not-about-ideas-it-s-about-making-them-happen-gm471207118-63414351?st=dcfc2ed
- IL Our guest expert, Sam Bedford, is here to help us understand how adding new a new location can change the way you handle sales tax. Thank you so much for joining us today, Sam. (Sam introduces himself.) Click to next slide
- Thanks Ivy and thank you all for joining the webinar! A great opportunity for businesses like yours to reach new markets or gain a logistical edge in the market is to open up a new location. When opening a new location, an important consideration that is often overlooked is your sales tax process. States and jurisdictions have their own taxability rules, exemptions, tax holidays, filing rules, forms, deadlines, etc. I recommend reaching out to your current CPA or Accounting firm and asking if they have experience with Sales Tax in the states where you are looking to open up a location. Something to keep in mind is that many CPA’s and accounting firms do not specialize in Sales Tax for other states, so ask if they can provide you a recommendation to another accounting professional in that state or even partners, like Avalara, who have multi-state Sales Tax expertise. Once you gain an understanding of the Sales Tax implications associated with your products in a new state, you will need to contact the Department of Revenue or Board of Equalization in that state, and find out what the specific guidelines are to get registered as a Sales Tax Remitter. Some states have local level registration in addition to the state level. Understand all levels of exposure prior to opening up your new location and be sure to give yourself ample time to complete the registration process. From my experience when dealing with registrations, states take on average 4-6 weeks to finalize your paper work. I recommend allowing 2 months to get this finalized with the state. Avalara’s Professional Services team can help with getting registered and I am sure there are other options if you do not have the time, whether that be an accounting professional you work with or other multi-state Sales Tax professionals. When you add another location, especially if its in another state, in most cases you will create nexus. As a recap, NEXUS is loosely defined as sufficient physical presence, which means that you will need to collect and remit sales tax in yet another location. As your business continues to grow, and you add more and more locations, or start selling online to customers in many different areas, a process that was good enough before just might not work anymore. It becomes incredibly more difficult to manage.
- I’d like to cover a few steps that I think are important to include into your evaluation of adding a new location. I think it is safe to assume that all of you understand the importance of location & logistics along with the costs and your addressable market in a new location so I am going to focus on the steps that are often forgotten. Understanding your requirements in a new state can be overwhelming, so take a deep breath and understand that you can strategically approach Sales Tax. Contacting a tax professional is always the first step in regards to Sales Tax. Gain an understanding of whether you need to register or not, as I mentioned before, chances are you should register if you are opening a physical location. Identify if your products or services are taxed differently in the new state. Understand any local jurisdictional requirements you may have. AL, LA, CO are a few states that I run across on a regular basis with local jurisdictional requirements. Understand how the state requires you to file and remit the sales tax you collect. Some states have made it very easy while others require a much more detailed filing. How much time is it going to take you to stay compliant? Will you need to hire additional employees to mange this compliance? Are there solutions that you can leverage as an outsource for compliance? Lastly, What are the overall costs of compliance for my business? After considering the total cost of Sales Tax Compliance does it still make sense to open up a location in this particular state or should you consider another location? Once you identify the location, start the Registration process as soon as possible to allow time to configure your rate calculation and test to ensure your invoices will have proper calculation and finally understand how frequently you will need to file Sales Tax and implement a process to ensure you are filing on time and in the correct format. I am happy to be a resource for you in regards to NEXUS creating activities and product taxability. In addition to me as a resource, Avalara.com/learn provides informative videos and white papers on most any Sales & Use tax questions you may have or areas where you would like to gain further understanding. Thank you all for your time and I will turn things back over to Ivy for the Q&A.
- IL Thanks, Sam! We’ll open it up now for a few questions from the audience. NEW PHOTO TK Q&A IL We’ve got to wrap up now, but be sure check out other webinars linked in Attachments. Thank you Sam for presenting and everyone for attending!