Jurisdiction
and Nexus: Advanced issues in determining “substantial
nexus” for sales and use tax purposes after Quill. What
current business practices cause nexus: drop shipments, advertising,
delivery in company-owned trucks, use of independent contractors,
unpaid representatives, maintenance of inventory, occasional visits
by employees? Affiliate and economic nexus. Consequences of using the Internet
to conduct business, voluntarily registering to collect sales taxes
and establishing “temporary nexus.” The latest on state
attempts to tax Internet and mail order sales.
The Streamlined Sales Tax Project: Detailed update
and discussion on the current status of, and issues surrounding,
the SSTP. Why the Streamlined Sales Tax Project is important. Substantive
state tax changes already made. Which states are participating
and at what level? Related federal legislation. Prospects for the
future.
Ethical and Procedural
Issues: The timing of objections, elections, tax
increases and assessments. Sufficiency of evidence and ethical
issues on audit—maintaining exemption certificates and other
records, including those kept electronically, defining good faith,
using statistical sampling. The effect of Sarbanes-Oxley on recordkeeping
for sales and use taxes; how to put internal controls in place
to ensure that the sales and use tax department is run with ethics
and integrity.
Manufacturing Exemptions:
Determining whether a manufacturing exemption is available in a
particular state and how far it extends — to manufacturing,
processing, fabricating, packaging, R&D, testing, pollution
control; to machinery, materials, chemicals, electricity, natural
gas, computers, transportation equipment; to the production of intangibles;
to retail or service industries. Must the final product be sold?
Proving substantial transformation. Manufacturing incentives.
Accounting for Undisclosed Sales and Use Tax Liabilities: Discussion of obligations under FASB Statement No. 5 (FAS 5 or ASC 450) to book appropriate reserves for undisclosed sales and use tax liabilities. Impact of recent SEC orders related to failure to maintain appropriate internal controls and adequately reflect sales tax liabilities for both public and private companies. Identification of typical tax risk drivers which contribute to undisclosed liabilities. Discussion of undisclosed liabilities and their impact on M&A. Strategies for identifying, quantifying and mitigating tax exposure, thus reducing undisclosed sales and use tax liabilities.
Services and Mixed
Transactions: Identifying the type of transaction involved--- pure service, mixed or bundled. Sourcing issues, especially for services offered electronically or through “cloud computing.” Sales and use tax treatment of computer software and other digital products, data processing, telecommunications, engineering services, delivery charges, maintenance, access to information and the Internet, and other services. Planning methods to minimize sales and use taxes on mixed transactions. Efforts to clarify this area, including the Streamlined Sales Tax Project and Internet Tax Freedom Act.
Contractors and Tax
Exempt Entities: Distinguishing between exempt sales
to the federal government and taxable sales to government employees.
Treatment of purchases made with IMPAC and other types of government
cards. Sales to state, county, city governments, branches and agencies;
religious, charitable, educational and not-for-profit organizations.
Critical differences in tax treatment between the states. Structuring
the transaction to produce the best result.
Problems Session:
Practical application of the concepts presented. |
