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 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.
Leasing Issues:
Distinguishing between a lease and a sale; an operating lease and
a financing lease. Applicability of the sale for resale exemption.
State tax treatment of leases involving services, tangibles, real
property, intangibles, or a combination thereof. Accounting and
tax issues. The Streamlined Sales Tax Project definition. Available
elections and exemptions. Taxability of mobile property, sale/leasebacks,
leases between related parties. Planning opportunities.
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.
Services and Mixed
Transactions: Identifying the type of transaction
involved — pure service, mixed or bundled? Sourcing issues.
Sales and use tax treatment of computer software and data processing,
telecommunications, engineering services, delivery charges, maintenance,
access to information and the Internet, and other services. Using
the separately stated rule and other planning methods to minimize
sales and use taxes on mixed transactions. Attempts 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. |
