Discussion on sales tax for Life Sciences and

Report
What QAD Users Need to Know
About Managing Sales Tax
How Prentke Romich Company Automated Sales Tax
© Avalara
1
Introduction
Mike Alpert
Mike Alpert is the Strategic Alliances Manager with Avalara focusing on
Avalara's product integrations with QAD. Mike performed his first ERP
implementation beginning in 1991 while working for Accenture. Since
then, his experience involves a variety of roles in the software industry
including developer, development manager, business development,
project management, and sales.
Mary Bing
Mary Bing is the IT Director at Prentke Romich Company (PRC), an
employee owned company in Wooster, Ohio that designs and
manufacturers technology products for people with speech disabilities.
Since 1999, Mary had guided PRC IT strategy, including implementing
QAD and Avalara’s AvaTax. She also serves as Chair of the ESOP
Communications Committee, a position she’s held since 2008.
Making sales tax less taxing
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What we’ll cover
1.
2.
3.
4.
5.
Sales Tax is Hard
You Try It
How PRC Conquered Sales Tax
About Avalara
Questions and Contacts
© Avalara
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100,000 + distinct taxability rules
Destination
bas
Tax Holidays
Nexus Hybrid
rules sourcing
State-provided
info
ofte
Zip
codes
don’t
Origin
Exempt
missing,
misleading,
o
match
tax
Sales
tax
is
hard.
Thousands
of changes
based
Organizationsjurisdictions
each year
E-commerce
ru
Home Rule States
Sourcing
Exempt
Products
14,700+ distinct tax
rules
Situs
jurisdictions in North America
Making sales tax less taxing
Sales Tax: The Challenge
Do I have to collect (and if so, for whom)?
How do I register,
report, and remit?
YOU
ARE
HERE
For what do I
have to collect?
How do I know what to charge
(and is that info accurate)?
Making sales tax less taxing
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•
•
•
•
•
Making sales tax less taxing
150+ million mailing addresses
11,000+ jurisdictional rules
35,000+ sales / use / rental tax rates
~ 30 M product / service exemptions
750,000+ buyer / seller exemptions
Understanding nexus.
Knowing where you need to collect.
 “Nexus” describes the connection between a state and a
business
 Having nexus allows a state government to require an
out-of-state company to register and collect tax
 The out-of-state company must have “physical presence”
– but that definition is ambiguous and always up to
interpretation
Making sales tax less taxing
Understanding sourcing rules – “situs”.
Origin-based states
for products
(destination-based
for services)
Arizona, Illinois,
Missouri, New Mexico,
Ohio, Pennsylvania,
Tennessee, Utah,
Virginia
Making sales tax less taxing
Mixed source states
California
̶ Counties are originbased; Cities & STJs are
destination-based
̶ Services are always
destination-based
Texas
̶ Cities and counties are
origin-based based; STJs
are destination-based
̶ Some services are
destination-based
Destination-based
states
All the Rest
Product and Service Taxability
 What is taxable in one state, may be exempt in another
 Check with each jurisdiction for unique product taxability laws
̶
Product taxability laws are not consistent
̶
Similar products might be taxed differently
̶
Different industries have varying taxability rules
Non-taxable
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Taxable
You Try It – Find the Tax Rate
• Seller:
– Avalara
100 Ravine Lane
Bainbridge Island, WA 98110
– Assumption: Seller has Nexus in Missouri
• Buyer:
– American Business Futures (ABF)
1111 E Broadway
Columbia, MO 65201
– Assumption: ABF is non-Exempt
• Product: Canned Software, Shipped on Disc
What is the Correct Tax Rate?
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The Answer Is…
Making sales tax less taxing
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But Wait…There’s More!
4.725%
Making sales tax less taxing
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Prentke Romich
Company
Pioneers in the field of assistive technology and augmentative
communication for people with speech disabilities
Making sales tax less taxing
Who is PRC?
• Pioneer in the field of using technology to help people with
speech disabilities
• Design, manufacture, and repair hi-tech medical products
• Provide services to support language acquisition
• 140 employee owners
• 5 divisions
Making sales tax less taxing
PRC Locations
• PRC, located in Wooster, OH, has field representatives
in about 36 states, giving them a presence and nexus
• Saltillo, located in Millersburg, OH has field
representatives in 7 states
• Subsidiaries in UK, Germany and Australia
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PRC Systems
• QAD – SSM, PCO/PCR, Vertex
– Installed in 2004
• Subscription service websites (available in US, UK and
Australia)
AAC Language Lab
– Therapy materials & lesson plans
iShare PRC
– File sharing and data storage
Realize Language
– Analysis of language samples
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Saltillo Systems
• Quickbooks Pro
• Ecommerce site
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Factors driving change
•
•
•
•
Rapid growth in nexus for Saltillo
Vertex license limited to one server connection
Building out services websites
Adding UK and Australia to services websites
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Objectives
• Provide tax solution for a subsidiary running Quickbooks
• Provide tax solution for website subscription services
• Provide VAT tax solution for subscription services in the
UK and Germany
• Centralize sales tax management and transaction
records
• Automate returns and gain efficiencies in accounting
department
Making sales tax less taxing
Possible Options
• QAD
– Global Tax Management: manually configure tables
– Vertex and Sales and Use Tax Interface (SUTI)
• Quickbooks
– Manually configure tax tables in QB
– Purchase Vertex license
– Purchase license from another vendor
• Ecommerce
– Purchase additional Vertex license
– Purchase license from another vendor
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Action Plan
•
•
•
•
•
•
•
•
January – Saltillo and Quickbooks Implementation
February – Saltillo AvaTax Returns
April – Saltillo e-Commerce site implementation
May – Install QAD Connector
June/July – QAD configuration and testing
August 1 – QAD go-live
September – services website implementation
October – PRC AvaTax Returns
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Saltillo Action Items
• Configured Saltillo company in Avatax Admin console
– Set up Nexus
– Set up tax rules
– Set up automatic returns
• Quickbooks – implementation 1 week
– Installed plug-in
• Web services – 1 day
– Install api and modify custom shopping cart
Making sales tax less taxing
PRC Action Items
• QAD Implementation - 60 days
– Installed api
– Configured tax class, tax usage, tax rate, tax zone, tax
environment
– Cleaned up customer and item records
– Selected product codes
– Exemption overrides
– Special tax rates
• Website Services – 1 day
– Install api and modify shopping cart
Making sales tax less taxing
AvaTax vs. Vertex – what did we
gain?
• 50% reduction in annual costs and fees
• Licensing flexibility
• Revenue savings used to expand services – automated
returns
• Simple and easy installation
• Reduced administration – no monthly updates
• Large selection of product codes, taxability managed by
Avalara
• Collect VAT tax for UK web services business
Making sales tax less taxing
Just like outsourcing payroll, companies
that outsource sales tax benefit by:
 Achieving compliance
 Cutting costs
 Increasing efficiencies
 Focusing on growth
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How does it work?
QAD
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Sales tax end-to-end compliance
Making sales tax less taxing
Avalara’s capabilities continue to grow
Improving Technology
Expanding Integration
Avalara Services
Added support for Lat/Long, new
REST API, UPC taxability, and
high-availability cloud deployment
Hundreds of integrations on all
major commerce platforms
Expanded offering to customers with
related applications
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Q&A
Mike Alpert
Channel Development Manager, Avalara
[email protected]
© Avalara

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