For CRUSH 2016, Avalara’s national tax compliance conference coming up May 9-11 in New Orleans, we sat down with one of the conference speakers, Diane Yetter, founder of the Sales Tax Institute and president of YETTER. Our goal was to learn more about her session, potential ramifications of use tax and what she is most looking forward to at the conference.
Avalara: The title for your session at CRUSH 2016 is “Surviving Use Tax: What You Need to Know.” What are the key concepts you hope attendees take home?
Diane Yetter: I hope they come away with an understanding of what use tax is and when it applies, as well as solutions to help reduce the time involved from an organizations’ accounts payable department on this critical task.
Avalara: Accountants and small businesses are attending CRUSH 2016; why should an accountant know more about use tax?
DY: Many small businesses look to their accountant to keep them in compliance. If the accountant doesn’t ask the small business client if they have a use tax liability – and doesn’t help educate the owner about this obligation – the accountant has put small business at risk. I have an audit in process right now for a small business, and the largest part of the assessment is use tax. When I asked the accountant why he wasn’t filing use tax, he said that the client doesn’t owe anything! This will be a five-figure assessment for the client, just for the use tax.
Avalara: Why do you feel businesses ignore or are unaware of use tax, and what potential ramifications do they face?
DY: I think businesses misunderstand the liability. Businesses also think the Internet Tax Freedom Act means that anything bought online isn’t subject to tax, but that’s not what the Act says. As businesses have moved to buying more online, their use tax liability has increased. I believe this is outside the scope of what small businesses think about – and they also think the sum is just pennies on the dollar. But, those pennies add up quickly, especially when you add interest and penalties to it.
Avalara: How do you feel technology helps speed sales tax compliance and reporting?
DY: Sales tax automation has come a long way since I’ve been in the business. Just the fact that the software solutions include taxability rules is a huge help. When I started in this business, all that was available were rate files – if you can believe that. I even developed custom solutions early on in my career because there weren’t any solutions, particularly for use tax. States have gotten more accepting of third-party “outsourcing” of tax calculation, which also has helped small businesses.
But, all the technology in the world doesn’t eliminate the need for businesses to understand where they have to collect tax and how to correctly map their products to the taxability content. They also have to ensure to have processes in place to deal with customer exemption documentation. The ultimate liability for sales tax will still always be with the business. Technology providers may take some liability, but if the business doesn’t set it up with the right processes, it still will come back to them.
Avalara: What are you looking forward to most at CRUSH?
DY: I’m looking forward to meeting small business owners and staff that care about sales tax, and talking to them about how to protect their business from liability. It will also be great to catch up with my friends at Avalara, and there are some pretty fun evening events scheduled!
Join Diane Yetter for her session, “Surviving Use Tax: What You Need to Know,” on May 11. For more information on CRUSH 2016, visit our website that includes all conference sessions, speaker bios and location information.