4 Great Things I Learned About Sales Tax Compliance at #TaxCRUSH17
- Sales and Use Tax
- May 12, 2017 | Gene Marks
There's nothing better than getting advice from someone experienced and in the trenches. Actually, there is something better: getting advice from three such people. That's what happened recently at Avalara Crush in Austin.
I spent an hour in discussion with three smart Chief Financial Officers. Oh, and I did this on stage in front of a few hundred people. The topic was about compliance and it's something near and dear to this audience of fellow CPAs, controllers, CFO's, tax managers and others whose job it is to minimize their company's exposure to sales and use tax issues.
So what did I learn?
Mobile technology is key for exemption management
Getting exemption certificates is a major headache and will continue to be. Jerome Kaiser, the CFO of SeneGence, a maker of skin care and cosmetic products, convinced me of this. His company manages the sales efforts of thousands of distributors. Many of them choose to collect and pay their own sales taxes. Managing this process and the forms required can be an enormous headache. Kaiser, as well as his fellow two participants on the panel, agreed that Avalara's CertCapture mobile application, which enables customers in the field to snap and then upload a photo of their exemption certificate which can then be scanned and integrated into Avalara's system, is and will continue to be a huge productivity tool for maximizing compliance and minimizing problems.
Compliance technology helps tax personnel
Jeff Marr, the CFO at Colter Peterson, a company that buys, sells, repairs, and moves new, rebuilt and used paper cutters and paper handling equipment, handles all the sales tax compliance issues in his company...himself. Kaiser also does this with a very small staff of people. Technology is helping everyone be more productive. "With Avalara in place, we are positioned to grow," said Kaiser. "We can add more distributors and have a system in place to handle the additional work."
Sorry, but after hearing Scott Sannes' story, I can't put this into better words. Sannes, the CFO at storage solution provider Janus International suffered through multiple audits from New York State and California. So has Marr. Each time they've had to pay the state. In Marr's case, the horrible experience of being audited by the state of New Jersey was the main reason for getting Avalara. Now, he almost relishes the opportunity to be audited. "Bring it on!" he taunted the regulators during the panel (let's hope they're not reading this). Sannes, on the other hand, found that each year his audit costs and exposures decrease mainly because of Avalara. The first round targeted the pre-Avalara years and was the most costly. Later audits, where Avalara was used, have proved much easier.
Compliance issues are going to get worse
The panel's outlook on the future of compliance wasn't so rosy. All agreed that compliance pressures from the states will increase over the next few years. As the federal government's budget shrinks, local governments will be scrambling for more revenues and bumping up their audits to find dollars where they can. Online marketplaces like Amazon are caving in to the government's demand to collect sales taxes nationwide. Technology is making it easier for governments to search and find potential sales and use tax issues. New laws are frequently appearing. More companies are selling overseas and facing a growing number of regulatory hurdles. All of this requires a continuing investment in advanced technology to manage compliance.
I originally thought a panel on sales and use tax compliance would be about as exciting as a discussion on the history of Etruscan pottery. But I was wrong. This was a great panel, with great advice for any company collecting sales tax.
Avalara hosted its second annual CRUSH conference—the premier conference for transactional tax compliance automation—May 2-3, 2017 in beautiful Austin, Texas. The conference saw over 300 attendees from all over the country, including finance executives and tax superstars, come together to learn from top industry professionals and expert Avalarians. Check out #TaxCRUSH17’s interactive Storify timeline of some of the best social content shared during the conference. Hope to see you next year for CRUSH 2018!