webinar: sales tax compliance and your miva merchant store

Sales Tax Compliance and Your Miva Merchant Store

Presented By: Rick Wilsonand Peter Petracco Date: June 17, 2010

• Sales and Use Tax Primer – Sales Tax 101– What are storeowners faced with?– What’s coming in the future?

• What is AccurateTax TaxTools? – How did the solution come about? – What is our experience in this area? – Software as a Service

• Demo • Q/A

Introduction / Agenda

Sales Tax 101: A Primer

Nexus – physical location where storeowner is expected to collect and remit sales/use tax for sales that are accomplished on their behalf

Sourcing Rules – each state defines how products/services sold will be “sourced”, meaning how the seller should resolve the issue of sales tax calculations

• Origin-based vs. Destination-based vs. Combination-based

Sales vs. Use Tax• sales tax – traditionally the tax collected by a retailer/seller• use tax – tax supposed to be paid by the customer/purchaser if the seller did not collect

Sales Tax 101: Taxing Authorities/Jurisdictions

•Over 14,000 taxing authorities in the US today

•Most states have state/county jurisdictions, but some states have more breakdowns – city, metro or special jurisdiction taxes (stadium districts, transportation, etc.)

•Lack of uniformity across states for Rules sourcing, rounding, product taxability,

exemptions/filing/remittance

•Sales Tax Holidays and Item Exclusions – does your state have them, are you setup to deal with them?

•Insufficient state budgets are causing taxing authorities to get more “anxious” about tracking down sales tax delinquencies

•Zip-based Tax Solutions aren’t able to provide accurate sales tax rates

That’s today, what’s coming in the future?

Sales Tax 101: What are states doing?Streamlined Sales Tax Project (SSTP)

• Group of aligned states (23) that have set down a set of rules and guidelines for the orderly calculation, reporting and remittance of taxes collected by Sellers in their states.

• 41 States + DC have accepted the SSTP concept, but are considered “advisory non-conforming members”

• Sellers can use Certified Service Providers (CSP) to avoid the “audit” issue • Volunteer Sellers under SSTP will collect tax for ALL 23 states

• Four current CSPs, but two more are being added this month and AccurateTax is one of them

• Usage of CSP services are FREE to Sellers

Sales Tax 101: SSTP Today

That’s today, what’s coming in the future?

Sales Tax 101: What will the future hold?What’s coming?

• “Amazon Tax” vs State of New York • Rhode Island, North Carolina, Tennessee, Maryland are following this model • Colorado is creating their own hybrid version for this • California is taking a second try and this apple • Hawaii and a few others tried and law was vetoed for now

• Main Street “Fair Tax” laws – federally mandated sales tax collection, likely modeled after the SSTP processes• More states joining SSTP

• Georgia coming online later this year • Wisconsin joined just last year • Other states are already “Advisory non-conforming” members

Bottom line, Sellers just want some peace of mind when it comes to sales tax collection, calculation, reporting and

remittance

NetBlazon/AccurateTax’s Solution History

•In the Miva Merchant world, NetBlazon has had sales tax module solutions available since 2002 •Zip-based Sales Tax module was a widely used module by many stores across the US

• In July 2008, Washington state became an SSTP state and began using zip+4 jurisdictional boundaries

• Zip Zip+4 was an order of magnitude more data for many states • But who knows their zip+4? • No Address Validation/Scrubbing service integrated with Miva Merchant• Zip+4 databases would be very large and would take a long time to load

and process • Specific state rules support was not part of the original module • Reporting and Jurisdictional tracking was not available with original module

AccurateTax was born as a result of the needs of the community

What is AccurateTax TaxTools?

TaxTools is a Software as a Service (SaaS) offering that provides Address Validation and Sales/Use Tax rate

information for E-Business systems.

TaxTools provides integration with a variety of E-Business solutions:

• E-Commerce shopping cart solutions• Accounting systems• Backend enterprise resource planning systems• Custom Software Development Kit (SDK) capability

TaxTools uses USPS address databases and sales/use tax rate information provided by the States with our proprietary

algorithms to provide a valuable end-to-end service to a variety of users.

Why use AccurateTax TaxTools?

Zip+4 Rates and Boundaries are orders of magnitude more difficult to manage over state-wide or 5-digit boundaries

Sales Tax Holidays and Item Exclusions vary widely from state to state

Updates to Rates/Boundaries is included in the service

We don’t charge you for setup or the client-side module at all

Module updates are FREE to customers and customers can adjust their usage up or down as their needs dictate

New users can try the service for FREE to see if it meets their needs

Who benefits from using TaxTools?

Small & Medium Business (SMB) market

Accounting/Management Consultants

Enterprise Customers

Companies with gross sales under 5 million dollars annually Solution is priced to allow companies to grow their usage organically as their needs increase Basic and Advanced Solutions are ideal, but Enterprise is available





Companies with multiple nexus points and/or gross sales over 5 million

Expected higher transaction usage Multiple integration needs (shopping cart, accounting, ERP) Shifting inventory types and appropriate tax rules are

required Looking for a complete solution rather than a simple tax rate

calculator Primarily looking for the Enterprise solution exclusively





Accountants or Management Consultants responsible for filing sales tax on behalf of Sellers

Companies interested in having a dedicated sales tax resource for determining rates

Specialized systems and/or services for generating quotes, calculating rates or providing other detailed sales/use tax information





TaxTools Solutions – which solution do you need?

TaxTools Solutions

Address Validation / Scrubbing Service

• Takes partially completed or erroneously entered data for Shipping Addresses as input • Attempts to “scrub” the address information to find a valid US Postal Service (USPS) deliverable address

• Returns valid zip+4 zip codes for addresses

TaxTools Solutions

TaxTools – Basic Version

• Provides basic sales tax rate information based on provided zip codes

• No reporting capability • Does not perform calculations

• Does not provide address scrubbing, so any zip+4 zip codes are required to be present BEFORE we attempt to find a sales tax rate

TaxTools Solutions

TaxTools – Advanced Version

• Integrates Address Validation with Sales Tax calculations • Provides rounding rules support based on nexus state(s)

• Activity Reporting of scrubbed addresses and/or sales tax rates provided is available • Can work with multiple nexuses

TaxTools Solutions

TaxTools – Enterprise Version

• All the features of Advanced solution plus:

• Sales tax calculations performed based on state rules and product/tax class types

• Custom tax/Sales Tax Holiday support available

• Version to be used by SSTP Sellers

TaxTools in Action(demo)

How is TaxTools packaged and priced?

Based on customer's package level, any overages are charged based on their per call

fees

Software as a Service (SaaS)

Sellers signup for their desired package and estimated monthly calls (usage)

A call is defined as a discrete XML REST-call to our server from Seller's system

Calls can be for Address Validations or Sales Tax

Information

Questions?

AccurateTax Contact Information

Phone: 866.400.2444 Sales Inquiries: [email protected]

Pete’s direct email: [email protected]

mailto:[email protected]

mailto:[email protected]

webinar: sales tax compliance and your miva merchant store

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