Are you collecting, storing, and using the necessary data to ensure your tax calls are correct?  If you’re not sure, you might want to see if your data can answer these three key questions…

1. What is Being Purchased?

This is fairly simple, or so it would seem. Did you know a good portion of companies can only see that something was purchased, but they can’t tell specifically what it was?  I know that seems ridiculous, but I assure you we see it all the time.  Often, the reason is because Accounts Payable isn’t required to key line-level detail into their payment system.  However, it sometimes happens when line-level detail is keyed but then rolled up, or consolidated, for other business purposes.  Regardless of the reason, you need to ensure all purchase information is collected and stored at the detailed line level.  It might seem obvious, but this is an essential step that is too often ignored!

2. Where is it Going?

Once you can safely determine what is specifically is being purchased, you need to know where the transaction occurred.  For smaller companies, this is usually simple, as there is often only one location. However, larger companies are another story.  The answer gets exponentially more complicated when there are multiple locations, companies, business units, etc.  As such, Cost Center, Profit Center, and Buyer Ids tend to become invaluable to help solve the mystery. 

3. How is it Going to be Used?

It seems like knowing what is being purchased and where it’s going should be enough to drive an accurate tax result, right?  Unfortunately, no.  Companies operating in “exemption-rich” industries still need to know more!  They need to know how the purchase going to be used.  Again, this seems obvious; after all, a hammer is used for hammering, a computer is used for computing, and a drill is used for drilling.  It almost seems like the “how” is right there in the name. Yet, computers can be used for accounting, manufacturing, or organizing human resources information. Even less-complicated tools, like hammers and drills, can be used at various stages of production, or can be incorporated into a piece of equipment, or can simply be part of a tool box in a supply closet. The purpose may not be so obvious, so your data needs to reflect how the item will be used so you can tax it accordingly.

Running through this three-question process will ultimately help you determine if you have good data. If the data you’re leveraging for your tax calls can answer each of these questions, you’re likely on the right track and ahead of the curve. But if it can’t, you may be overpaying your tax obligation and/or taking on unknown risks! 

 

 

Affordability

The third and final cornerstone is Affordability. 

All companies can benefit from implementing tax automation on their purchase-side, but unfortunately the vast majority of available options are priced well outside the reach of the middle-market.  Without such automation, companies in this market segmentation tend to overpay their obligations, have compliance issues and/or get hit with surprise audit assessments. None of which is good when money is in heavy demand for a growing business.

TaxView Express will ultimately save your business tens of thousands of dollars each month!  Not only is it one of the most cost-efficient solutions available today, it also comes with the company’s exclusive “Zero Fee Guarantee.” This means, if your benefit doesn’t exceed twice your cost, you don’t pay!

It only takes $5,000 to get started with TaxView Express.  This setup fee covers the development of your custom environment, as well as the build-out of your JE writer for journal entry extracts.  After set-up, you pay just $2,500 per month. 

TaxView Express takes a specific and unique approach that amplifies accuracy, simplicity and cost savings. No longer do middle-market companies need to spend an exorbitant amount of time and money to achieve the same benefits of those larger companies with dependable tax automation.  The utilization of our smart technology provides maximum flexibility and is designed to always stay up-to-date with unmatched accuracy and simplicity at an affordable cost.

Dynamic Tax Solutions, Inc. (DTS), was established in 2009 by founders with collectively more than 40 years of experience in sales and use tax accounting and auditing. Over the last decade, DTS has helped many of the largest companies in the world to identify and correct their purchase-side transaction tax errors on a regular monthly basis.  Understanding that such errors were not exclusive to the Fortune 500, DTS recently developed a new middle-market tax application, TaxView Express, featuring simplicity, accuracy, and affordability. TaxView Express will solve your challenges and ultimately make your monthly accrual process more efficient. To find out more about TaxView Express, click here.

Simplicity

 

The second cornerstone for a sound sales and use tax automation function is simplicity. 

A good sales and use tax system must be simple in its configuration, ongoing use, and reporting.  in my opinion, each of these elements must be understood and managed by tax professionals without the aid of I.T. professionals.

Sales and use tax systems are often far too complex to be used by tax professionals. They often require specialized IT resources to build an interface to an ERP system, they often require complex routines to handle simple decisions, and reporting is rigid. Add massive data files to the mix and you have a recipe to overwhelm a tax practitioner. Too often, I see CFO’s who assume that the sales and use tax function is under control when such expensive systems are implemented to only find out later they are in a worse situation than before when significant over-payments are uncovered or when significant fines and penalties are paid to jurisdictions under audit.

Choose a system that allows tax professionals to do their job. TaxView Express is an application that is a fully hosted, cloud-based software solution that doesn’t require significant IT support or additional hardware. TaxView Express also contains an integrated Express Manager, which serves as your in-app guide, assisting with everything from data import, tax decisions, tax rates, and dynamic reporting.  With these and many other features, DTS has made using TaxView Express as easy as checking your email.

To read about the first cornerstone, accuracy, CLICK HERE.

When it comes to sales and use tax automation, there are three cornerstones of success; accuracy, simplicity and affordability. Although many companies devote resources to automate tax determinations and calculate sales and use tax, they often struggle because they choose tools that lack one or more of these cornerstones. In this three-part blog series, we will dive into each of these cornerstones, why they are important in sales and use tax automation and how TaxView Express can assist by fulfilling all three cornerstones.

 

Indirect tax professional are masters?

Do you know an indirect tax professional or have one on your staff? Do you know the person who is responsible for a company’s sales and use tax compliance and accruals? I know hundreds of these gladiators. I was talking with one yesterday and I had a revelation. Indirect tax professionals are masters at “wingin’ it.” AND, most hide this from their boss.   

Most indirect tax professionals are sound tax technicians, yet they use very little of that tax technical knowledge because they are busy managing manual processes such as building massive, and often complex, spreadsheets. For example, most indirect tax professionals rely on spreadsheets to calculate a monthly use tax accrual or calculate adjustments to an accrual calculated by a bolt-on tax engine. Most indirect tax professionals are masterful spreadsheet and data handlers, however using and maintaining spreadsheets for indirect tax data is “wingin’ it.”

There are many reasons indirect tax professionals use spreadsheets. Tax professionals, like most finance professionals, have been using them for years because they are easy to build, modify, and send. Also, I think it’s safe to say the vast majority of tax professionals have access to a spreadsheet application. However, spreadsheets are inherently risky for reasons that make them convenient. PriceWaterhouseCoopers’ research has found that 91% of spreadsheets contain, at a minimum, a 5% error margin. A quick Google search yields several other studies by reputable firms that corroborate this finding.

Spreadsheets are susceptible to human error in this scenario because they are populated by copy and paste efforts involving thousands or even millions of transactions. Formulas are input manually, and data is often also entered manually. Spreadsheets are normally built by single employees who are not software engineers and know very little about software documentation and version control.

As I hinted above, I believe many indirect tax professionals do not actively seek spreadsheet alternatives because they are comfortable with using them and are unaware of the risks. I rarely hear about earnest efforts by indirect tax professions to research technology and process alternatives to spreadsheets and presenting those solutions to the CFO, tax director or vice president of tax. In my opinion this is a missed opportunity because I believe most tax directors or CFO’s rely on their indirect tax professional to be proactive. They have hired that person to seek out and present solutions that solve problems and obtain results. If the indirect tax person doesn’t do that, they are “wingin’ it.”

About the Author – Mark Mercer is a Co-Founder of DTS where he helps companies focus to see their sales and use tax errors. When he’s not thinking about golf, Mark is looking for the use tax issue in everything.

About the Company – DTS combines tax technology and proprietary processes to deliver true visibility and powerful analytic tools that allow tax professionals to identify and correct their purchase-side tax errors. Say goodbye to years of expensive bolt-on software implementations, endless reverse audits, and huge audit assessments. The new way is here, and DTS can show you how easy it can be.

 

 

Before working with us, we know that you may have a lot of questions about our platform and it is crucial for us to provide you with as much information as we can! The following questions should give you some immediate answers. However, if you still have questions or would like more information, please click here, so that we can contact you. 

Can TaxView work with a proprietary ERP system?

Yes. Although most of our clients utilize SAP, Oracle, or JDE, we do have several clients that do have less common or proprietary systems. Since TaxView doesn’t require any integration into the ERP system, we are able to work with all systems.

We're not typically assessed under audit, what would be the benefit for our company to use TaxView?

Most auditors are instructed to not look for over payments. Therefore, you may not have any material audit deficiencies, but you may be leaving dollars on the table in the form of over payments. Our Diagnostic Reviews are a great way to determine if that may be the case. 

How much time is needed to implement and maintain TaxView?

We have made sure that it is fast and simple to implement TaxView. We can onboard any organization in as little as 6 to 8 weeks, from the time we get importable data, with minimal disruption to your tax and IT departments. And, the typical TaxView client spends only 4 to 8 hours a month reviewing/managing their results before extracting any journal entries to be uploaded into the GL.

Our company has strict budgetary constraints, how much does TaxView cost?

The specific cost of our monthly service is tied to several different factors related to your company, data, and industry. However, our clients have found the actual price of their service is far less than a typical software solution and the exorbitant cost of the errors (over payments and under payments) they were experiencing on a monthly basis. In fact we are so confident you will realize value every month using TaxView, you will have the option to discontinue your subscription if you don’t.

How much time does it take to fully learn how to use TaxView?

Since we construct and maintain 100% of the tax situsing and policy rule configurations for you, learning how to use TaxView is relatively easy. In fact, most of our clients become quite proficient within a day or two.

What are the hardware/software requirements for running TaxView?

TaxView is a fully web-enabled, cloud-based software solution that does not require your company to purchase and/or maintain any specific hardware or software. The only requirement is a free Citrix plug-in that takes less than 5 minutes to download and install.

How often do you update your tax rates and content?

Our tax rates and content are updated on a monthly basis.

Do you use a third-party provider for your rates and content?

Yes. We utilize CCH for our rates and tax content, as they are known as one of the country’s leading providers of this type of information.

Can I use my own taxability instead of the content provided by CCH?

Yes. Our system allows the user the option of applying a custom tax decision or a delivered CCH tax decision at the rule level. For example, if we created 1,000 rules to process your data, you could have 600 of them governed by CCH decisions, and the remaining 400 could be governed by custom tax decisions. This gives you the option to easily incorporate any audit results into your rule structure.

Is there a way to test TaxView prior to signing a potentially long-term contract?

Yes. Our Diagnostic Review process is a great way to perform a “proof of concept”. Not only will the review show you how your data will look and be processed by TaxView, it will also let you know how well your current tax function is performing. Results from these reviews can typically be shared within 4 to 5 weeks of receiving the importable data and will clearly report tax over payments, under payments and error rates.

How do I know if TaxView can work with my data?

We can work with almost any type of data, but we do require that your data meets certain requirements. 

Is my data going to be safe?

Absolutely. Your data is stored in our secure “SSAE 16 Type II” data center, offering you the highest levels of logical and physical security, as well as fault tolerant environmental and power control systems. Further, all data can be encrypted and sent, via SFTP, to and from the data center.

What are the maximum and minimum amounts of data we can send to you every month?

There is no minimum or maximum limit to the amount of data we can receive and subsequently process each month. Whether you need 1,000 transactions or 10,000,000 transactions processed each month, we will have you covered.

Can your system use my negotiated rates that I have in certain jurisdictions? 

Yes. We have several clients that have negotiated rates in various tax jurisdictions. TaxView allows rate overrides at the state, county, city, and local levels.

Will your system allow us to allocate costs and taxes to different locations or states?

Absolutely. Whether you need a single line or every line on an invoice to be spread across multiple companies, business units, or locations, our system can handle it.

Do you offer web-based demonstrations of your service?

Yes. We give web-based demos every week. They typically take between 45 minutes to 1 hour, depending on the amount of questions you may have. 

What kind of reporting does TaxView offer?

TaxView has an extremely robust reporting module that allows users to run over 60 delivered, management-level reports on demand.

Can the TaxView reports be exported into Excel?

Yes. All of the TaxView reports can be easily exported to Excel or formatted as a .pdf document. Reports can be saved, and are also pre-formatted to print on either letter or legal paper (based on each report’s layout).

To contact us to learn more about TaxView, click the button below!

Many of your vendors, in addition to online retailers, are now required to collect sales tax even though they lack physical presence.

Most of the media coverage, consultants, and blogs have focused on Wayfair’s ramifications on companies that now need to start charging sales tax on sales.  This is a concern for thousands of companies. However, I think that ALL companies will be affected by the decision in a different way.

What Changed?

On June 21, 2018, the United States Supreme Court ruled in a 5-4 decision in South Dakota v. Wayfair, Inc., et al, that the physical presence test under the 1992 Supreme Court case (Quill Corp v. North Dakota (504 U.S. 298)) no longer applies to the obligation to collect and remit sales tax on sales to customers in a state. In other words, a company can now be required to collect sales tax by simply selling over the internet or by using any other method, regardless of whether the company or its representatives ever step foot into the state. The ruling is in respect to South Dakota’s law, but may have implications for all states.

What Does This Mean?

In a rush to comply with State’s legislation and the Wayfair ruling, thousands of companies will hastily implement processes to charge sales tax. That tax will often be incorrect because these companies lack the appropriate information or systems to properly calculate the tax. Keep in mind that vendors new to collecting will often NOT use appropriate location (situs) information to tax services or determine whether a transaction is an interstate or intrastate purchase of tangible personal property. Vendors will likely NOT know how you use tangible personal property and will NOT have your exemption certificate. These are only two examples.

What Should I Do?

Companies should review all purchase transactions where sales tax was charged by the vendor. Try to identify new vendors and vendors that recently started charging sales tax. For those transactions, recalculate the sales tax on the entire invoice and compare to what the vendor charged. Correct the payment or take corrective action in the current month’s compliance if possible.

A best practice is to automate this procedure If your company has significant purchase transactions you may want to research automation in this area. DTS’ TaxView PRO can help. If you are interested, or unsure whether an investment makes sense, DTS offers a risk free diagnostic. To find out more, click the link below! 

Regardless of the manner utilized, it’s extremely important to capture and document the information needed to answer questions auditors ask and that's why topic 4 is all about how to make traceable use tax accruals.