The document provides an agenda and schedule for a seminar on sales and use tax presented by Wade Farquhar. It includes breaks throughout the day-long seminar and an evaluation period at the end. The seminar will cover the differences between sales tax and use tax, specific transaction types and exemptions, nexus and interstate commerce rules, and how to determine a company's tax profile.
Whistleblower and Class Action Lawsuits in Sales Tax: Dammed if You Do, Damne...Levenfeld Pearlstein, LLC
This presentation will discuss recent cases including decisions/settlements that have never been reported as well as best practices/strategies to minimize an area in which even the most conscientious of taxpayers are at risk.
Whistleblower and Class Action Lawsuits in Sales Tax: Dammed if You Do, Damne...Levenfeld Pearlstein, LLC
This presentation will discuss recent cases including decisions/settlements that have never been reported as well as best practices/strategies to minimize an area in which even the most conscientious of taxpayers are at risk.
On June 21st, the United States Supreme Court issued its long-awaited decision in South Dakota v. Wayfair, overturning the requirement that an out-of-state seller have physical presence in order for a state to require the seller to collect and remit state and local sales tax. Under Wayfair, substantial nexus exists if the taxpayer “avails itself of the substantial privilege of carrying on a business in that jurisdiction.”
State and Local Tax Nexus Issues and the Impact on Mergers and AcquisitionsSkoda Minotti
Would you sell a home before making it attractive enough to turn a profit? Selling a business is no different. Before you plan to sell, there are essential tax implications you should understand and steps you should take to ensure smooth sailing for a successful transaction
H.R.25 - Fair Tax Act of 2009
To promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States
Taxation, Direct and Indirect Tax Macro Economicsckeebakhattak
this presentation tell about what is tax and what is the difference between direct and indirect taxation and its advantages(Pros) and disadvantages(Cons).
There is huge demand for importing goods into the US. In 2013, $2.273 trillion worth of goods were imported.
Key imports included agricultural products, industrial supplies, capital goods (computers, telecommunications equipment, motor vehicle parts, office machines, electric power machinery) and consumer goods (automobiles, clothing, medicines, furniture, toys).
However, every year thousands of importers unnecessarily delay their entries into the US. This is because they make mistakes and are not compliant to US Customs Border
Here we help you to avoid those mistakes.
Advertising Tax Impact Accomplishments And The FutureAffiliate Summit
Discussion on the Advertising Tax by industry leaders that have played a key role in organizing industry advocates and educating legislators on the impact of state tax nexus legislation.
Brian Littleton, President / CEO, ShareASale.com (Twitter @Brianlittleton) (Moderator)
Karen Garcia, Partner, GTO Management (Twitter @karengarcia)
Beth Kirsch, Volunteer, Performance Marketing Alliance (Twitter @bethkirsch)
Melanie Seery, President, Affiliate Voice (Twitter @mellies)
The Importance of State and Local Tax NexusSkoda Minotti
This course will lay out some of the important aspects of state income tax and sales tax nexus concerns, then address the importance of performing detailed state and local tax due diligence. It will also discuss the importance of performing due diligence to address the potential sins of the past before actually entering the M&A market.
On June 21st, the United States Supreme Court issued its long-awaited decision in South Dakota v. Wayfair, overturning the requirement that an out-of-state seller have physical presence in order for a state to require the seller to collect and remit state and local sales tax. Under Wayfair, substantial nexus exists if the taxpayer “avails itself of the substantial privilege of carrying on a business in that jurisdiction.”
State and Local Tax Nexus Issues and the Impact on Mergers and AcquisitionsSkoda Minotti
Would you sell a home before making it attractive enough to turn a profit? Selling a business is no different. Before you plan to sell, there are essential tax implications you should understand and steps you should take to ensure smooth sailing for a successful transaction
H.R.25 - Fair Tax Act of 2009
To promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States
Taxation, Direct and Indirect Tax Macro Economicsckeebakhattak
this presentation tell about what is tax and what is the difference between direct and indirect taxation and its advantages(Pros) and disadvantages(Cons).
There is huge demand for importing goods into the US. In 2013, $2.273 trillion worth of goods were imported.
Key imports included agricultural products, industrial supplies, capital goods (computers, telecommunications equipment, motor vehicle parts, office machines, electric power machinery) and consumer goods (automobiles, clothing, medicines, furniture, toys).
However, every year thousands of importers unnecessarily delay their entries into the US. This is because they make mistakes and are not compliant to US Customs Border
Here we help you to avoid those mistakes.
Advertising Tax Impact Accomplishments And The FutureAffiliate Summit
Discussion on the Advertising Tax by industry leaders that have played a key role in organizing industry advocates and educating legislators on the impact of state tax nexus legislation.
Brian Littleton, President / CEO, ShareASale.com (Twitter @Brianlittleton) (Moderator)
Karen Garcia, Partner, GTO Management (Twitter @karengarcia)
Beth Kirsch, Volunteer, Performance Marketing Alliance (Twitter @bethkirsch)
Melanie Seery, President, Affiliate Voice (Twitter @mellies)
The Importance of State and Local Tax NexusSkoda Minotti
This course will lay out some of the important aspects of state income tax and sales tax nexus concerns, then address the importance of performing detailed state and local tax due diligence. It will also discuss the importance of performing due diligence to address the potential sins of the past before actually entering the M&A market.
U.S. State and Local Indirect Tax OverviewAlex Baulf
Please find a copy of the slides from Grant Thornton UK LLP's recent VAT Club seminar, held at our Finsbury Square offices in London. In this breakout session, Adam Raschke discussed key concepts and issues relating to the US state and local indirect tax system.
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.
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.
Business Law Training | State and Local Taxes: Key Developments That Will Aff...Quarles & Brady
Most businesses pay more state and local taxes than federal. This program will update you on some of the key developments in the state and local tax world that will affect your companies now and in the future. Topics include how changes in federal law will affect state taxes, the ongoing debacle over sales tax collection requirements, an explanation of how states are fundamentally changing their corporate taxes, and much more.
California as a Backdrop for Recent State Tax DevelopmentsCBIZ, Inc.
recent California income and franchise tax developments and how those developments compare and contrast with income and franchise tax laws in other states.
Automate your receivables, streamline your payables, put payroll tax and GST on autopilot, and get more time to monitor and manage cash flow. Full agenda at: http://www.leanteams.ca/quickbooksevent.html
Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
Taurus Zodiac Sign_ Personality Traits and Sign Dates.pptxmy Pandit
Explore the world of the Taurus zodiac sign. Learn about their stability, determination, and appreciation for beauty. Discover how Taureans' grounded nature and hardworking mindset define their unique personality.
Personal Brand Statement:
As an Army veteran dedicated to lifelong learning, I bring a disciplined, strategic mindset to my pursuits. I am constantly expanding my knowledge to innovate and lead effectively. My journey is driven by a commitment to excellence, and to make a meaningful impact in the world.
Affordable Stationery Printing Services in Jaipur | Navpack n PrintNavpack & Print
Looking for professional printing services in Jaipur? Navpack n Print offers high-quality and affordable stationery printing for all your business needs. Stand out with custom stationery designs and fast turnaround times. Contact us today for a quote!
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Premium MEAN Stack Development Solutions for Modern BusinessesSynapseIndia
Stay ahead of the curve with our premium MEAN Stack Development Solutions. Our expert developers utilize MongoDB, Express.js, AngularJS, and Node.js to create modern and responsive web applications. Trust us for cutting-edge solutions that drive your business growth and success.
Know more: https://www.synapseindia.com/technology/mean-stack-development-company.html
Putting the SPARK into Virtual Training.pptxCynthia Clay
This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
Accpac to QuickBooks Conversion Navigating the Transition with Online Account...PaulBryant58
This article provides a comprehensive guide on how to
effectively manage the convert Accpac to QuickBooks , with a particular focus on utilizing online accounting services to streamline the process.
3.0 Project 2_ Developing My Brand Identity Kit.pptxtanyjahb
A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
Business Valuation Principles for EntrepreneursBen Wann
This insightful presentation is designed to equip entrepreneurs with the essential knowledge and tools needed to accurately value their businesses. Understanding business valuation is crucial for making informed decisions, whether you're seeking investment, planning to sell, or simply want to gauge your company's worth.
Unveiling the Secrets How Does Generative AI Work.pdfSam H
At its core, generative artificial intelligence relies on the concept of generative models, which serve as engines that churn out entirely new data resembling their training data. It is like a sculptor who has studied so many forms found in nature and then uses this knowledge to create sculptures from his imagination that have never been seen before anywhere else. If taken to cyberspace, gans work almost the same way.
3. Link for this and other
presentations:
www.LeanTeams.ca
www.Slideshare.net/leanteams
4. The (somewhat complicated) nature of sales tax.
What we will cover today:
Sales vs. Use tax.
Specific transactions and exemptions.
Nexus and interstate commerce.
Compliance issues.
Determining a company’s tax profile.
2
3
4
5
6
1
5. Quiz
1) What is sales tax?
a) A straight value-added tax remitted to
the federal government.
b) An age-old practice dating back as far as
ancient Egypt.
c) Completely irrelevant.We should all just
move to Oregon.
6. 2) Who is responsible for knowing the
pertinent tax rate?
a) The seller.
b) The buyer.
c) It depends…
3) T/F: Sales tax is a way for jurisdictions
to raise funds to provide important
public services to residents.
7. 4) Agent of the state refers to:
a) The newestTom Clancy novel.
b) The Internal Revenue Service.
c) The responsibility of a seller to collect an
remit sales tax on receipts.
5) A NOMAD state is:
a) A state you wander through on your
way from NewYork to California.
b) A state that wishes to secede from the
Union.
c) A state that has no sales tax.
10. • A tax on sales or the receipts on sales.
• Questions we need to answer:
• Who is supposed to charge it?
• How is it paid?
• Who is it paid to?
• Value-added tax (V.A.T.):
• Present in many countries, but administered
differently.
What is sales tax?
11. Can be traced back as far as ancient Egypt to
fund public services – Pyramids (?)
First appearance in the colonies.
Consumers were responsible for remitting tax.
Had to keep all receipts for purchases and pay taxes
on all purchases… monthly.
History of Sales Tax
12.
13. A tax on sales receipts to fund public services for
the common good within a jurisdiction.
Sometimes they are temporary in nature, and
end when a certain project is completed.
Other times the taxes stick around and become
permanent.
Sales Tax Now
This leaves us with two certainties in life:
Death and…
15. Can be held, smelled, touched, weighed, seen,
tasted, or otherwise perceived by the senses.
Not bolted to the ground.
Not improvements that become part of a property.
Pertains to the end user or consumer of a product.
Tangible Personal Property (TPP)
16. Personal
• For consumption or
• Not attached to
property.
• Taxable when
purchased.
Real
• Once installed becomes
attached to the property.
• Remains with property once
it is sold.
• Is not taxed again when
property is resold.
Personal vs. Real Property
17. Transfer of title, possession, or both.
Takes place at the point in time where
possession is transferred.
Lease or rental ofTPP.
A sale to the end user of a good or service.
Retail Sale
Layaways, deposits, and installments don’t count.
18. Generally, services are not taxable.
Services – not taxable unless specifically listed.
Goods (personal property) – taxable unless
specifically exempt.
For more information on which services are taxable
inWashington click here.
What About Services
19. Sale is made between parties located in two
different states.
Sale is made between parties located in the same
state.
Intrastate Transactions
Interstate Transactions
20. Nexus
• Do I need to collect taxes here?
Exemptions
• Does the customer have an exemption certificate?
Product taxability
• What is the taxability of this product or service?
3 Main Considerations
22. • Over 12,000 different taxing jurisdictions in the U.S.
• These jurisdictions include counties, cities, transit districts, etc.
• More than 14,000 different tax rates that may apply.
• States with no tax, but where counties can level taxes.
• States with no sales tax… except in certain situations.
• States with mixed statewide and local taxes.
• What is this whole “home rule jurisdictions” and “self-
administered” states?
• We haven’t even talked about Canada yet, eh.
Types of States
23. • Taxation laws are in the State’s hands – they are
the rule maker.
• As a business you are the agent of the state.
• The history on this goes back a long ways, but for
simplicity sake businesses were enlisted as
“agents of the state.”
• This means that the burden to collect and remit
sales tax falls on you.
Agent of the State
24. 1. Shifting – the economic burden of the tax is
shifted from the seller to the buyer.
2. Absorption – the seller includes any tax in the
selling price.
3. Separation – the tax must appear separately
on the invoice or receipt.
3 Characteristics of States
25. 1. Seller Privilege – the seller has the privilege of selling and is
liable for the tax.
2. Consumer Privilege – the buyer has the privilege and is liable for
the tax, with the seller (who is registered with the state as a
dealer) serving as a trustee or agent for the state in collecting
and remitting the tax.
3. Transaction Privilege – the transaction has the privilege and the
buyer is liable for the tax. If the seller fails to collect the tax from
the buyer, the buyer and seller remain jointly liable.
4. Gross Receipt – the seller has the privilege of selling and is liable
for the tax.
4 Types of States
26. • Washington has a gross business and occupation
tax.
• This means that there is no income tax!
• Levied on the value of products, gross proceeds of
sale, or gross income of the business.
• First you must figure out the tax classification of
your business activity.
• Then you must find the corresponding tax rate.
Washington is a Gross Receipt State
28. Primary state-level resource
Washington Department of Revenues
Publishers
Wolters Kluwer (CCH Group)
The Sales Tax Guy
Services
Avalara
Taxify
SalesTaxSupport.com
Firms
Deloitte – Perspectives
Washington State Sales Tax Helpline (800) 647-7706
Sources for Today’s Discussion
29. “The avoidance of taxes is
the only intellectual
pursuit that still carries
reward.”- John Maynard Keynes
31. Tag teams with sales tax.
A way to ensure that all taxable transactions are,
in fact, taxed.
Usually remitted by the buyer, not the seller.
Compensate for sales tax that isn’t paid for out of
state purchases, consumed wholesale goods, etc.
Use Tax
Prevent sales tax evasion.
32. Let me be Frank
with you for a
moment.
Frank’s Fab
Coffee
Frank rocks!
Thanks. Mi cup
est su cup.
Frank’s
Cup
33. X 300 per year (each employee)
What is wrong with this?
Did Frank pay tax when he purchased the cups?
34. If the sales tax doesn’t get you
the use tax will.
35. Consumer
• A tax that consumers
remit when they buy
something in Oregon.
• Buyer’s use tax or
purchaser’s use tax.
• Covers the tax burden
not collected by the
seller.
Seller
• Also called merchant or
vendor use tax.
• Usually takes place in an
interstate transaction.
• Rather than collecting sales
tax the seller collects the
seller’s use tax rate.
• The rate could be different.
Consumer or Sellers Use Tax
Both are remitted where property is used or enjoyed.
36. Make sure your AP or purchasing department
has procedures to capture use tax.
Be cautious with out-of-state, mail order, or
internet purchases.
Find out what theWashington DOR says about use
tax here.
What do you need to do?
Be careful – according to a recent survey by the
publisher of the RIA tax guide the second most
common issue in an audit is failure to remit use tax.
38. Nexus relates to the seller.
A “connection” with a state establishes nexus.
What triggers Nexus?
• Physical presence in a state.
• Employee activity in a state.
• Activity of agents in a state (including affiliates).
Some surprising Nexus triggers:
• Attendance at trade shows in a state.
• Certain amounts of revenue earned in a state (this level of
revenue is determined by each individual state).
Important decision regarding Nexus: Quill vs. ND
What establishes Nexus?
39. Intrastate
• Buyer and seller are
both within the same
state.
• Sales tax is collected
seller and remitted to
the state.
• Easy, peazy, lemon
squeezy.
Interstate
• Buyer and seller are not
within the same state.
• Seller may collect sales tax,
may collect seller’s use tax,
or may collect nothing
• “It depends.”
• Either way, somebody is
going to need to cough up
some taxes.
Intrastate vs. Interstate Transactions
40. The vendor is located outside the state.
Quill Corp. vs North Dakota
The vendor sells taxable property to customers
within the state.
The property is stored, used, or consumed in the
state.
The vendor has sufficient nexus in the state.
2
3
4
1
42. Goods moving between states “in commerce” are
only subject to tax at the origin or destination.
Goods that are in transit are not subject to tax.
There are some special cases.
Interstate Commerce Exemption
This can be a common, and often costly, tax trap.
44. The four-pronged test:
1. The transaction must have sufficient taxable nexus with the state.
2. The tax cannot discriminate against interstate commerce. It
cannot unfairly favor a local vendor by charging a lesser rate.
3. The tax must be fairly apportioned, i.e., the property is taxed in
proportion to its presence in the state or the activity of the
taxpayer in the state.
4. The tax must fairly relate to the benefits received, i.e., the
benefits the taxpayer receives from the state are commensurate
with the tax imposed.
For more information see: Complete Auto vs. Brady
Interstate Transactions
46. Life is a journey. All that
matters is the destination.
Journey smurny, I care about
the origin.
47. Some states are title transfer, some states are
possession transfer, some require both.
Depends on the terms of the contract for sale.
If not specified, the possession transfers when
goods are delivered.
Where does possession transfer?
In destination states (most states), only the state
where the buyer takes possession has legal right to
tax.
48. • Washington is a destination state… kinda.
• Taxes are assessed where products or services are
delivered in the case of intrastate transactions.
• Destination-based sales tax only applies to businesses
that ship or deliver their goods.
• In these cases there is no change for deliveries outside
the state or over-the-counter sales where customers
take home goods from a store location.
For more information click here.
Washington Peculiarities
49. Examples
• A resident of Olympia orders a pizza from a
restaurant located in Tumwater. The store
delivers the pizza to the customer in Olympia.
• Should you use the sales tax rate in Olympia or
Tumwater?
• Sales tax is based on the customer’s location in
Olympia.
50. Examples
• A Vancouver resident purchases a computer online
from a merchant in Seattle. The computer is a gift for
a student attending college in Pullman. The buyer
directs the seller to ship the computer to the
student’s address in Pullman.
• Does title transfer in Seattle, Pullman, or Vancouver?
• The sale is based on the location of the student in
Pullman. The merchant should collect sales tax
based on the “ship to” address in Pullman.
51. Examples
• A Spokane Valley resident purchases a mattress
at a store in Spokane. The merchant delivers the
mattress from its warehouse located in Deer Park
to the customer’s home in Spokane Valley.
• Where should sales tax be assessed?
• Sales tax is based on the customer’s location in
Spokane Valley.
52. • No sales tax is charged for certain nonresidents on
purchases of tangible personal property, digital goods,
and digital codes, that will be enjoyed outside
Washington state.
• There must be no retail sales or use tax, value added
tax, or gross receipts tax in their state or province, or
• The relevant tax is less than three percent.
• Sellers are not required to offer this exemption.
For more information click here.
Nonresident Exemptions
53. Reciprocity
• Where reciprocity exists, the state gives credit for
sales or use taxes already paid on the product in
another state.
• Not all states have reciprocity.
• Individual states decide whether or not to grant
reciprocity.
• Washington does allow reciprocity under the SSUTA.
54. Most states tax sales made over the internet like catalog sales.
Who remits the tax?
• If the seller has nexus in the destination state, the seller
charges the tax.
• If the seller does not have nexus, the buyer remits use tax.
• Simple right?
Problems and confusion:
• Internet Tax Freedom Act
• Internet Tax Nondiscrimination Act
Internet Sales
55. • Fred Pryor Training Rewards
• Microsoft Excel
May 26th – 27th
• The Essentials of HR Law
August 17th
• How to Use Quickbooks
March 20th
• Payroll Law
July 20th
Upcoming Seminars
56. Nexus
Yes
Collect at 0%
Collect correct %
TaxableCustomer
(Exemptions)
Product taxability
Determining Your Tax Profile
No
No
Yes
Yes
No
57. • Cooperative effort of 44 states, D.C., local governments and the
business community to simplify sales and use tax collection.
• Reduce administrative costs for retailers operating in multiple
states.
• Seeks to make local "brick-and-mortar" stores and remote sellers all
operate by the same rules.
• Washington is a member state effective July 1, 2008.
• This effectively movedWashington to a “destination-based” state.
• Retailers that deliver products to customers need to code the local
sales tax to that of the destination city or county.
For Washington-specific information click here.
The Streamlined Sales Tax Project
58. • Prescribes methods and resources to help you confidently
research tax issues.
• Provides resources such as a Uniform Sales and UseTax
Exemption Certificate that is accepted in 38 states..
• Provides assistance for fundraiser rules.
• Voluntary Disclosure Program allows those with potential liability
in multiple U.S. states to negotiate a settlement agreement
through a single point of contact and a uniform procedure.
For more information click here.
Multistate Tax Commission
59. • Allows previously unregistered businesses to pay back
taxes.
• Generally has a look back period for 4 years plus the
current.
• Can result in up to a 35% potential discount in waived
penalties.
• The DOR can summarize the liability on one assessment.
For more information click here.
Voluntary Disclosure Program
60. • Compact members - states that have enacted the
Multistate Tax Compact into their state law.
• Sovereignty members - states that support the
purposes of the Multistate Tax Compact through
participation in, and financial support for, the general
activities.
• Associate members - states that participate in
Commission meetings and otherwise consult and
cooperate with the Commission.
Key Terms Related to the MTC
62. Manufacturing
General Treatment Washington State
Non-Taxable Non-Taxable
The exemption does not apply to machinery and
equipment primarily used for activities taxable
under the state public utility tax.
Machinery and equipment used in the production ofTPP.
63. Manufacturing
General Treatment Washington State
Non-Taxable Non-Taxable
However, in some cases repair labor is taxable.
Repair or replacement parts for production machinery
65. Manufacturing
General Treatment Washington State
Non-Taxable Taxable
This is specifically related to fuels or utility
services consumed in manufacturing.
Materials used or consumed in manufacturing.
68. Manufacturing
General Treatment Washington State
Taxable Non-Taxable
More specifically, these are exempt. Sales of packing
materials to businesses in the commercial packing
industry are taxable in the case of consumption.
Containers sold to be reused by vendors are also
taxable.
Containers, packing material, labels, wrapping, etc.
69. Construction
General Treatment Washington State
Non-Taxable Non-Taxable
This is non-taxable when the materials are used for
custom construction, not when consumed. For
more information on the construction industry and
taxes click here.
Building materials
70. Construction
General Treatment Washington State
It depends Taxable
If sales tax is not paid then use tax must be remitted. For an
example click here.
Tools and equipment
71. Computers and Software
General Treatment Washington State
Taxable Taxable
Hardware is consideredTPP and therefore taxable.
Computer hardware
72. Computers and Software
General Treatment Washington State
Taxable Taxable
Think of “canned” software as software off the
shelf. InWashington downloads are specifically
mentioned as taxable.
Prewritten or canned software
73. Computers and Software
General Treatment Washington State
Non-Taxable Non-Taxable
This is an exemption that applies unless there is a
required hardware component to run the custom
software. In that case, the hardware can be taxed
separately.
Custom software
74. Services
General Treatment Washington State
Taxable Taxable
This excludes barber services, dental services,
physician and medical services, attorney services,
security services, and training services.
Personal services
75. Services
General Treatment Washington State
Non-Taxable Non-Taxable
Charges by abstract, title insurance, escrow and
credit bureau businesses, including tenant
screening services are taxable.
Professional services
77. Services
General Treatment Washington State
Taxable Taxable
This includes installing, repairing, cleaning, altering,
improving, constructing or decoratingTPP.
Services related toTPP
88. • Taxes paid on bad debts can be collected through a
credit on B&O tax.
• Specific to accrual-based businesses.
• You must apply for this credit.
• Once credit is received you may deduct the amount
previously paid.
Bad Debts
89. • These are charges to a consumer for borrowed money.
• Fees are not associated with the transfer ofTPP.
• Therefore, no taxable basis.
• However, it depends.
• In certain states finance charges are taxable.
Finance and Interest
90. • Three ways to figure taxable basis.
• Washington State opts for the way most beneficial to
consumers.
• The taxable amount is the difference in value between
the value of the trade and the value of the full-price
item.
Trade-In Allowances
91. • Use tax is generally remitted for withdrawals from
stock.
• Examples:
• Samples
• Display models – again, it depends
• The key idea is that these items were purchased with
the intent to sell.
• Taxable basis is figured on the purchase cost.
Withdrawal from Stock
92. • This usually relates to sales of inventory and items as
part of a sale of a business.
• These are not considered as retail sales.
• Items that are not part of stock are considered as
“occasional sales.”
• Warning: this does not relieve the new owner of any
previously owed tax liabilities.
Bulk Sales
93. • This calculation depends on the normal course of
business.
• Cost of materials can be claimed for items outside of
core inventory.
• Fair market value must be claimed for items assembled
within a normal inventory.
Self-Produced Assets
95. 1. Optional – extended warranties.
2. Mandatory – usually included in the
purchase price.
Taxable or Non-taxable
Taxable
It depends
For more information about the taxable nature of extended
warranties click here.
Replacement parts for mandatory warranties are taxable
unless they are covered in the warranty agreement.
98. Exemptions
Exempt Entities Exempt Transactions
Federal government,
tribes, etc.
Wholesale, specific
industry use, etc.
Either way, you need proof of the exemption.
102. Auditors will usually examine all open years (determined by
the statute of limitations) for:
• Sales, including exemption certificates
Make sure you have all the current certificates as required.
• Purchases, including out-of-state purchases
Make sure you can answer questions about where and how
property is used.
• Other records, including ledgers, journals, and adjustments
Make sure these support the reported values on any returns.
• Reporting and remitting, including all filed returns
Have these handy, including proof of filing if available.
103. Auditors will conduct the examination of these records
on:
• A detailed basis,
• A sampled basis, or
• Some of both.
104. For sampled records, they may use
either:
• A block sample,
• A random sample, or
• Some of both.
105. • Books, records, invoices, and receipts must be open for
examination by the DOR at any time.
• Managed audit procedure –Taxpayers are allowed to
perform some or all of the audit functions.
• Statute of limitations – typically no more than 4 years
past the close of the tax year. However, there are
exceptions:
• A non-registered taxpayer.
• Fraud or misrepresentation.
Washington State
106. • 9% if tax is not paid on the due date.
• 19% if tax is not paid by the last day of the month
following the due date.
• 29% if the tax is not paid by the last day of the second
month following the due date.
• Effective August 1, 2015.
• Interest is calculated to include the past due amount
and any penalties – Ouch!
Penalties