This document discusses bundled transactions from a sales tax perspective. It defines a bundled transaction as the sale of multiple taxable and non-taxable items together with a single price. It explains that states vary in how they determine the taxability of bundled transactions, with some using legal tests and others taxing the entire bundle if any item is taxable. The growth of services complicates determining taxability. For vendors, options include getting state approval to allocate prices, stopping bundling, or risking adverse audit results.
This seminar covered:
- Alternative delivery models: key model structures and procurement considerations
- MCA and DoLS: the latest legal landscape
- Local authority property update
- The Independent Inquiry into child sexual abuse: an update and key learning points
- Sentencing update and how to reduce the level of fine.
purchase price allocation (PPA) is an application of goodwill accounting whereby one company (the acquirer), when purchasing a second company (the target), allocates the purchase price into various assets and liabilities acquired from the transaction.
This talk describes the representations and warranties clauses in a typical business purchase contract, the clauses limiting time in which such clauses may be enforceable, the dollar limits on same, and other non-contract ways to enforce your deals, such as reps and warranties insurance, fraudulent transfer litigation, arbitration, and suits against negligent deal intermediaries
The purpose of this document is to outline the background to purchase price allocation, the process as well as commonly used methodology in valuing intangible assets
Legal Issues and Regulatory Requirements for Business AcquisitionsLawPlus Ltd.
Types of Business Acquisitions
Legal Issues for Acquisitions of Shares
Legal Issues for Acquisitions of Newly Issued Shares
Legal Issues for Acquisitions of Assets
Latest Development of M&A Regulations
Legal Factors to Consider on Acquiring Businesses in Other AEC Countries
Materi Workshop Legal Due Diligence (LDD) yang di selenggarakan oleh EMLI Training. Materi di sampaikan oleh Bapak Dendi Adisuryo, beliau adalah Partner at ADCO Attorneys at Law.
This seminar covered:
- Alternative delivery models: key model structures and procurement considerations
- MCA and DoLS: the latest legal landscape
- Local authority property update
- The Independent Inquiry into child sexual abuse: an update and key learning points
- Sentencing update and how to reduce the level of fine.
purchase price allocation (PPA) is an application of goodwill accounting whereby one company (the acquirer), when purchasing a second company (the target), allocates the purchase price into various assets and liabilities acquired from the transaction.
This talk describes the representations and warranties clauses in a typical business purchase contract, the clauses limiting time in which such clauses may be enforceable, the dollar limits on same, and other non-contract ways to enforce your deals, such as reps and warranties insurance, fraudulent transfer litigation, arbitration, and suits against negligent deal intermediaries
The purpose of this document is to outline the background to purchase price allocation, the process as well as commonly used methodology in valuing intangible assets
Legal Issues and Regulatory Requirements for Business AcquisitionsLawPlus Ltd.
Types of Business Acquisitions
Legal Issues for Acquisitions of Shares
Legal Issues for Acquisitions of Newly Issued Shares
Legal Issues for Acquisitions of Assets
Latest Development of M&A Regulations
Legal Factors to Consider on Acquiring Businesses in Other AEC Countries
Materi Workshop Legal Due Diligence (LDD) yang di selenggarakan oleh EMLI Training. Materi di sampaikan oleh Bapak Dendi Adisuryo, beliau adalah Partner at ADCO Attorneys at Law.
Be a social media magician | Learn to leverage digital marketingSocial Panga
Having a great following on social media can not only increase user loyalty with the brand but also result in improved business figures. Today, creating content is of no use until and unless it is engaging. Here's a presentation by Gaurav Arora, co-founder - Social Panga, about how have brands become social media magicians and leveraged their user engagement as a part of digital media strategy
Фестиваль "Остров детства" 24-26 апреля, 2015 Экспоцентр Гарден Сити, СПбNataliaLeonova
Isle of Childhood - special event for parents and children in St.Petersburg.
Остров детства - фестиваль для родителей и детей в Сантк-Петербурге.
Путешествия с детьми, детский активный отдых, спорт, досуг, творчество, детские лагеря, частные детские сады и школы, медицина для детей.
Be a social media magician | Learn to leverage digital marketingSocial Panga
Having a great following on social media can not only increase user loyalty with the brand but also result in improved business figures. Today, creating content is of no use until and unless it is engaging. Here's a presentation by Gaurav Arora, co-founder - Social Panga, about how have brands become social media magicians and leveraged their user engagement as a part of digital media strategy
Фестиваль "Остров детства" 24-26 апреля, 2015 Экспоцентр Гарден Сити, СПбNataliaLeonova
Isle of Childhood - special event for parents and children in St.Petersburg.
Остров детства - фестиваль для родителей и детей в Сантк-Петербурге.
Путешествия с детьми, детский активный отдых, спорт, досуг, творчество, детские лагеря, частные детские сады и школы, медицина для детей.
Katherine Cxypoliski of Avalra offered a much needed and often underestimated topic, the impact of global taxation issues on ecommerce and business generally, at the 2nd Annual eCommerce Expo South Florida sponsored by Rand Marketing in Fort Lauderdale, Florida.
The presentation focused on sales tax challenges, including why sales tax matters, product taxability, how to automate the process, sales tax compliance challenges, and taxation issues as they relate to zip codes and geolocation.
Understanding the advantages of having an expert review your company’s sales and use tax transactions; awareness of opportunities that potentially exist for obtaining refunds of sales and use tax already paid by your organization; learning more about the ins and outs of sales and use tax.
There is an old carpenters’ expression, “measure twice, cut once.” M&A work is just one of many areas in business and law where this expression resonates. Buyers and sellers, like chess players anticipating many moves in advance, should envision and plan the route to get a deal done, including anticipated detours, at the onset of the transaction.
This webinar discusses the similarities and differences between basic M&A transaction structures; purchase price payment concerns; the most common issues that arise in the early stages of M&A transactions of all kinds; the relationship between ostensibly unrelated sections of an M&A agreement; and transaction timeline. One focus of this episode is a threshold question in many deals: whether the buyer will buy equity or assets. This episode will, in summary form, cover many of the issues discussed in greater depth in subsequent episodes.
Part of the webinar series: M&A Boot Camp 2021
See more at https://www.financialpoise.com/webinars/
eCommerce and US Sales Tax – why companies are automatingJanSobczak5
Sacha Wilson
Director, Tax Technology Solutions EMEA Avalara
If you sell to customers in the US, get prepared for the major tax changes taking effect across the United States. The Supreme Court ruling in South Dakota v. Wayfair Inc, is only the beginning of a wave of change impacting companies that sell crossborder in the US. Get the latest updates and learn how companies are turning to tax technology solutions in their ecommerce checkouts, billing systems and ERPs to automate compliance.
Sacha Wilson is Avalara’s Director, Tax Technology Solutions EMEA, whose team helps businesses of all size automate the complexities of global tax compliance. Sacha’s background in business development and ecommerce spans over 20 years and covers blue-chips such as Amazon and Arcelor-Mittal as well as several dotcom start-ups. During 11 years at Amazon he launched and grew a number of programmes including Amazon’s Marketplace, Fulfilment by Amazon, Amazon Pay and Product Ads. He brings a depth in understanding of ecommerce and the tax issues facing European businesses involved in global trade.
Multi-state businesses face increasing financial burdens and a web of conflicting rules and complex tax issues - not only because of the sheer number of taxing jurisdictions, but also because state and local tax rules are not consistent from one jurisdiction to another. This complexity is further magnified for a multi-jurisdictional business involved in a merger/acquisition transaction ...
Structuring and Planning the M&A Transaction (Series: Private Company M&A Boo...Financial Poise
There is an old carpenters’ expression, “measure twice, cut once.” M&A work is just one of many areas in business and law where this expression resonates. Buyers and sellers, like chess players anticipating many moves in advance, should envision and plan the route to get a deal done, including anticipated detours, at the onset of the transaction.
This webinar discusses the similarities and differences between basic M&A transaction structures; purchase price payment concerns; the most common issues that arise in the early stages of M&A transactions of all kinds; the relationship between ostensibly unrelated sections of an M&A agreement; and transaction timeline. One focus of this episode is a threshold question in many deals: whether the buyer will buy equity or assets. This episode will, in summary form, cover many of the issues discussed in greater depth in subsequent episodes.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/structuring-and-planning-the-ma-transaction-2020/
EBE 2019 - eCommerce and US Sales Tax – why companies are automatingE-Commerce Berlin EXPO
Sacha Wilson
Director, Tax Technology Solutions EMEA Avalara
If you sell to customers in the US, get prepared for the major tax changes taking effect across the United States. The Supreme Court ruling in South Dakota v. Wayfair Inc, is only the beginning of a wave of change impacting companies that sell crossborder in the US. Get the latest updates and learn how companies are turning to tax technology solutions in their ecommerce checkouts, billing systems and ERPs to automate compliance.
Sacha Wilson is Avalara’s Director, Tax Technology Solutions EMEA, whose team helps businesses of all size automate the complexities of global tax compliance. Sacha’s background in business development and ecommerce spans over 20 years and covers blue-chips such as Amazon and Arcelor-Mittal as well as several dotcom start-ups. During 11 years at Amazon he launched and grew a number of programmes including Amazon’s Marketplace, Fulfilment by Amazon, Amazon Pay and Product Ads. He brings a depth in understanding of ecommerce and the tax issues facing European businesses involved in global trade.
There is an old carpenters’ expression, “measure twice, cut once.” M&A work is just one of many areas in business and law where this expression resonates. Buyers and sellers, like chess players anticipating many moves in advance, should envision and plan the route to get a deal done, including anticipated detours, at the onset of the transaction.
This webinar discusses the similarities and differences between basic M&A transaction structures; purchase price payment concerns; the most common issues that arise in the early stages of M&A transactions of all kinds; the relationship between ostensibly unrelated sections of an M&A agreement; and transaction timeline. One focus of this episode is a threshold question in many deals: whether the buyer will buy equity or assets. This episode will, in summary form, cover many of the issues discussed in greater depth in subsequent episodes.
Part of the webinar series: M&A BOOT CAMP - 2022
See more at https://www.financialpoise.com/webinars/
Key Provisions in M&A Agreements (Series: M&A Boot Camp)Financial Poise
Although every deal is different, understanding any purchase/sale agreement will help you understand other purchase sale agreements. Stated another way, most M&A documents include a similar set of sections and use a similar vocabulary. This episode explains specific, common provisions and discusses how buyers and sellers approach these provisions differently, particularly in light of situational differences (e.g. whether the assets being bought and sold are equity of a company or the assets of a company; whether the seller is going to cease to exists or not). Topics covered will include tax issues; corporate governance; closing conditions; representations and warranties; indemnification provisions; earn-outs; restrictive covenants; antitrust; intellectual property; and employment issues.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/key-provisions-in-ma-agreements-2021/
GST is one indirect tax for the whole nation, which will make India one unified common market.
There is a huge impact on industry and business due to this. We have summarise how and where this impact will be covered in your Microsoft Dynamics NAV ERP.
For more information, you can reach us at inoday.com
Although every deal is different, understanding any purchase/sale agreement will help you understand other purchase sale agreements. Stated another way, most M&A documents include a similar set of sections and use a similar vocabulary. This episode explains specific, common provisions and discusses how buyers and sellers approach these provisions differently, particularly in light of situational differences (e.g. whether the assets being bought and sold are equity of a company or the assets of a company; whether the seller is going to cease to exists or not). Topics covered will include tax issues; corporate governance; closing conditions; representations and warranties; indemnification provisions; earn-outs; restrictive covenants; antitrust; intellectual property; and employment issues.
Part of the webinar series:
M&A BOOT CAMP - 2022
See more at https://www.financialpoise.com/webinars/
3. Making sales tax less taxing
Bundled Transactions: Agenda
• What is a Bundled Transaction?
• How to determine the taxability of bundled
transactions?
• Why are items treated differently at all?
• What are options for vendors?
3CONFIDENTIAL & PROPRIETARY |
4. Making sales tax less taxing
Bundled Transactions.
• What is a Bundled Transaction?
4CONFIDENTIAL & PROPRIETARY |
5. Making sales tax less taxing
Bundled Transactions: Defined
• A “Bundled transaction” is a sale of multiple
sales tax objects with a single sales price.
The sale may include both taxable and
nontaxable objects.
• The vendor charges a customer one sales
price for all objects sold instead of
separately charging for each individual
object.
5CONFIDENTIAL & PROPRIETARY |
6. Making sales tax less taxing
Bundled Transactions: Defined
An “Object” is a distinct and identifiable
sales tax component of a sale:
• TPP
• Services
• Maintenance Agreement Labor or Parts
• Digital Goods
6CONFIDENTIAL & PROPRIETARY |
7. Making sales tax less taxing
Bundled Transactions: Defined
NOT distinct and identifiable sales tax
components of a sale:
• Packaging
• Promotional Items
• Objects whose inclusion or not does not
affect price
7CONFIDENTIAL & PROPRIETARY |
8. Making sales tax less taxing
Bundled Transactions: Who Decides?
• Most states include certain elements of a sale in
the regulatory definition of “sales price”:
• FL: ““Sales price” means the total amount paid for tangible personal
property, including any services that are a part of the sale …” Fla.
Admin. Code Ann. 12A-1.016 (2).
• IA: “<“sales price” includes> (3) charges by the seller for any
services necessary to complete the sale, other than delivery and
installation charges;(4) delivery charges;(5) installation charges;”
Iowa Code § 423.1 (51) (a).
• These elements are not part of a bundle. They are
part of the “sales price”: the amount on which the
sales tax is based for a given taxable sale.
8CONFIDENTIAL & PROPRIETARY |
9. Making sales tax less taxing
Bundled Transactions: Who Decides?
• “Distinct & Identifiable”
– Is a service contract for labor a “distinct
and identifiable object” when bundled with
a sale of tpp?
– Is a digital subscription a “distinct and
identifiable object” when combined with a
print subscription?
• Some states allow a legal test, others
are less charitable to bundles.
9CONFIDENTIAL & PROPRIETARY |
10. Making sales tax less taxing
Bundled Transactions: Examples
10CONFIDENTIAL & PROPRIETARY |
Object A Object B
Taxable TPP Exempt TPP
ie: Gift Baskets*
Object A Object B
Taxable Services Exempt Services
ie: Installation and Maintenance*
Object A Object B
Taxable TPP Exempt Services
ie: Installation of Sold TPP*
There are a lot of possibilities for bundling, here are a few examples:
* taxability depends on specific state law.
11. Making sales tax less taxing
Bundled Transactions.
• How to determine the taxability of
Bundled Transactions?
11CONFIDENTIAL & PROPRIETARY |
12. Making sales tax less taxing
Bundled Transactions: Taxable or Not?
• “True Object Test” and “Dominant Purpose Test” are
legal tests to determine whether a bundle actually
contains distinct objects or not.
• Some states reference a version of these tests to
determine whether a bundle is a bundle or not for
sales tax purposes.
• Keep in mind these tests were developed when
services were not broadly taxable and when services
made up a smaller segment of our economic activity.
12CONFIDENTIAL & PROPRIETARY |
13. Making sales tax less taxing
Bundled Transactions: Taxable or Not?
An auditor may or may not apply a “true
object” or “dominant purpose” test in a
manner that benefits your position.
The tests are inherently legalistic and at
best require a lot of judgment.
Document the decisions you make and
probably the best thing to keep in mind:
If it quacks like a bundle, it probably is one.
13CONFIDENTIAL & PROPRIETARY |
14. Making sales tax less taxing
Bundled Transactions: Taxable or Not?
• Other states do not provide for a legal test at
all.
14CONFIDENTIAL & PROPRIETARY |
15. Making sales tax less taxing
Bundled Transactions: Taxable or Not?
• Some states: Any object in a bundle is
taxable, the entire bundle is taxable.
• AR: “sales tax must be collected on the sales price of a
bundled transaction if any product included in the bundled
transaction would be taxable if sold separately.” Ark. Regs.
GR-93 (A).
• IN: “Sales tax and use tax are imposed on the gross retail
income received by a retail merchant in a retail unitary
transaction.” “A “unitary transaction” includes all items of
personal property and services furnished under a single
order or agreement, for which a total combined charge is
calculated.” Ind. Code § 6-2.5-2-2 (a) & Ind. Code § 6-2.5-1-1
(a).
15CONFIDENTIAL & PROPRIETARY |
16. Making sales tax less taxing
Bundled Transactions: Taxable or Not?
• Some States: Exempt Services are Taxable
when Bundled with Taxable TPP.
• AZ: “Gross receipts from services rendered in addition to
selling tangible personal property at retail are subject to tax
unless the charge for service is shown separately on the
sales invoice and records.” Ariz. Admin. Code R15-5-105.
16CONFIDENTIAL & PROPRIETARY |
17. Making sales tax less taxing
Bundled Transactions: Taxable or Not?
• No states provide for exemption of a
bundled item per se.
• Only states that allow a “true object”
test or “dominant purpose” test will
ever view a bundle as exempt based
on the inclusion of an exempt object in
the bundle.
17CONFIDENTIAL & PROPRIETARY |
18. Making sales tax less taxing
Bundled Transactions.
• Why are tpp and services taxed
differently (or not at all)?
18CONFIDENTIAL & PROPRIETARY |
19. Making sales tax less taxing
Bundled Transactions. Why?
• The states vary in the manner in which they
treat the sales of various objects.
• Services are an area of growth in terms of
taxability.
• The growth of the service economy has
triggered responses state by state.
19CONFIDENTIAL & PROPRIETARY |
20. Making sales tax less taxing
Bundled Transactions. Why?
• As services take a larger and larger role in
commerce, more and more transactions include an
element of service.
• Stand alone services, or at least those separately
stated, present a significant challenge in
determining taxability by themselves.
• Bundling services with tpp compounds the
challenge.
20CONFIDENTIAL & PROPRIETARY |
21. Making sales tax less taxing
Bundled Transactions. Why?
• Evasion of taxes is an issue for the states
when otherwise taxable objects are bundled
with exempt objects (services or tpp).
• States recognize the growth of the service
element of many transactions and are not
keen on allowing exemptions for bundled
transactions even when exempt objects are
included.
• Most states take a dim view of bundling.
21CONFIDENTIAL & PROPRIETARY |
22. Making sales tax less taxing
Bundled Transactions.
• What are options for vendors?
22CONFIDENTIAL & PROPRIETARY |
23. Making sales tax less taxing
Bundled Transactions: Allocation
• Otherwise known as “books and records
unbundling”
• Only about half the states allow this
technique at all. However most of them limit
this strategy to certain industries:
– Telecommunications
– Internet Access
– Audio/Video Programming
23CONFIDENTIAL & PROPRIETARY |
24. Making sales tax less taxing
Bundled Transactions: Allocation
• Allocation or “books and records
unbundling” is not allowed in half the states
at all, and limited in its scope in most others.
• Where does that leave a vendor?
24CONFIDENTIAL & PROPRIETARY |
25. Making sales tax less taxing
Bundled Transactions: Allocation
• In the absence of a binding legal
determination from a state, in the form of a
PLR or specific publication, the practice of
bundling can leave your company exposed
to under or over collection of sales taxes.
• There is no magic bullet.
25CONFIDENTIAL & PROPRIETARY |
26. Making sales tax less taxing
Bundled Transactions: Re-Cap
• What is a Bundled Transaction?
– a sale of multiple sales tax objects with a single sales price
– not applicable to items defined as part of the “sales price”
• How to determine the taxability of bundled
transactions?
– state specific bundling rules
– in some states, the application of a legal test
• Why are items treated differently at all?
– move to a service economy has forced the states to address
their taxability
• What are options for vendors?
– get a specific OK from a state, stop bundling, or risk
adverse audit results
26CONFIDENTIAL & PROPRIETARY |