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Category: Tax Chat

How to Find Sales Tax Rates

Posted on by mruiz@taxcloud.com

Sales tax. You have to collect it from your customers, and how much you need to collect and when and where you need to collect it varies. With more than 13,000 sales tax jurisdictions in the U.S., knowing how to find the right sales tax rates can seem like the stuff of nightmares. 

But it doesn’t have to be. Sales tax software makes it easy to find sales tax rates and ensures you charge your customers the right amount.

What’s Usually Subject to Sales Tax?

Part of finding the right sales tax rate involves knowing the 4 W’s when you calculate and collect tax:

  • What: What’s taxable can vary by jurisdiction. Some states don’t apply sales tax to clothing or other necessities while others do. In some jurisdictions, there’s no sales tax on digital products, like music downloads or e-books.
  • Where: Where the buyer lives also influences the sales tax rate, particularly if you have nexus in their state.
  • When: Some jurisdictions have sales tax holidays, during which certain products are exempt from sales tax.
  • Who: In some states, nonprofit organizations and government agencies are exempt from paying sales tax. Others may be exempt from tax if they intend to resell the products.


How to Find Sales Tax Rates (the Hard Way)

Calculating sales tax seems fairly simple. You multiply the product price by the jurisdiction’s sales tax rate. For example, if your business is based in Pennsylvania where the sale tax rate is 6% and a PA-based customer buys $50 worth of products from you, $50 multiplied by 6% (0.06) is $3. 

Things get more complex when you sell to customers in other states where you don’t have a physical presence. You’ll need to determine where you have nexus and need to collect tax from your customers. And with sales tax varying across jurisdictions, the process can become complicated.  Mistakes can be costly and time-consuming as well. A simple error could result in a state notice and a potentially hefty fine from a state tax agency.

How to Find Sales Tax Rates (the Easy Way)

Learning the ins and outs of sales tax, then calculating the rates for your business is time-consuming — and we’d bet you have better things to do than manually calculate sales tax on each order. Fortunately, there’s a better way. 

The easy way to find sales tax rates is with TaxCloud. 

Our sales tax software gives you access to Taxability Information Codes (TICs), those ever-changing codes that let you figure out when, where, and how much tax to charge. Our TICs are up-to-date, meaning we’ll automatically calculate and collect sales taxes when applicable

When you set up your store, assign the appropriate TICs to your products. Our sales tax software can then apply the right sales tax rate to orders while accounting for exemptions and sales tax holidays. Everything happens automatically, so you can focus on what matters most to your business, not sales tax.

TaxCloud makes finding sale tax rates a snap. Register today and see how it works for yourself.

What to Expect During a Sales Tax Audit: Quick Tips for Ecommerce Businesses

Posted on by mruiz@taxcloud.com

There are three words that can strike terror into the hearts of ecommerce business owners across the US: Sales tax audit. We’ve seen it time and time again —  ecommerce business owners don’t know that even if your business is based in one state, you can still receive an audit notice if you meet the nexus requirements for the states you don’t have a physical presence in.   

Here’s what to do if you get an audit notice and how to avoid a sales tax audit in the first place.

What is a Sales Tax Audit?

A sales tax audit examines your company’s sales records to see if you’ve paid the right sales tax to a jurisdiction. 

During the audit, a tax agent looks at your company’s records to see how much revenue it’s earned and how much sales tax it’s paid.  

Why is a State Auditing Your Business?

The state tax agencies that conduct tax audits aren’t doing them for fun (though it may seem that way). Usually, an agency decides to look closer at your company’s revenue and records when it has reason to believe that you owe more tax than you’ve paid.

A state may want to examine your business closely if the sales from your sales tax return don’t match the income tax return you filed with the IRS or that state.

While something usually triggers the audit, like suspected underreporting or a return discrepancy, some audits happen at random.

Your Sales Tax Audit Checklist

Once you get a notification letter from a state about a sales tax audit, the first thing to do is not panic. Audits can be messy, expensive, and annoying. The calmer you are through the process, the smoother it will go and the more likely the decision will be in your favor. 

1. Collect Documents

Gather any documents supporting your company’s claim and demonstrate that you paid the appropriate amount of tax. You’ll need sales records, invoices, tax returns, exemption certificates, and financial statements. 

Before handing your documents to the state agency, review them and look for any holes or discrepancies. It’s best to fill those holes or figure out the problem before you hand your records over for the sales tax audit.

2. Get Support

Pick one person to act as the point of contact between your company and the auditor. If you’ve been using TaxCloud, you can rely on our tax experts to serve as the go-between for your company and the state tax agency. 

No matter who represents your company during the sales tax audit, ensure they always remain respectful and calm around the auditor. Remember, you catch more flies with honey.

3. Be Upfront

You can’t hide from the tax collector. If you notice an issue with your company’s sales tax collection, it’s best to fess up and be honest rather than try to hide it.  

Preventing a Sales Tax Audit

An ounce of prevention is worth a … well, you know the cliché. Luckily, you can take action and keep tax auditors off your back. TaxCloud can help. Our sales tax software calculates your state sales tax obligations, collects the right amount of tax, and files your tax returns. 

And if your business does catch the eye of a state tax agency, we’ll be right there by your side, supporting you through any audit inquiries or notices. 

Stay compliant and keep sales tax audits at bay. Talk to us today to learn more about how TaxCloud can support you during an audit.

The 1-2-3’s of Multi-Jurisdictional Resale Certificates

Posted on by mruiz@taxcloud.com

Sales tax is part of life when you sell or buy online but there are always exceptions. Buyers that purchase items from you that they plan to resell often don’t have to pay sales tax online. Similarly, you may not have to pay sales tax when you buy items for resale. A multi-jurisdictional resale certificate acts as your ‘get out of sales tax-free’ card. 

Here’s how it works and what you need to know about accepting and presenting it.

1. What Is a Multi-Jurisdictional Resale Certificate?

A multi-jurisdictional resale certificate, aka a uniform sales tax certificate, is a form that exempts a buyer from paying sales tax when they purchase items for resale. Two types of resale exemption certificates are available: the Streamlined Sales Tax Exemption Certificate and the Uniform Sales & Use Tax Exemption Certificate.

The Streamlined Sales Tax Exemption Certificate is valid for use in the 24 states that are members of the Streamlined Sales Tax Governing Board. The Uniform Sales & Use Tax Exemption Certificate is valid in 36 states. 

Thanks to a multi-jurisdictional resale certificate, you only need to complete one form to get sales tax exemption in multiple states. 

2. Which Resale Certificate Do You Need For Multi-Jurisdictional Sales Tax?

Which resale certificate you need depends on your state. You can use the Uniform Sales & Use Tax Exemption certificate in the 36 states that accept the form or the Streamlined Sales Tax Governing Board’s form in the 24 member states.

Some states may also have their own sales tax exemption forms, which you can use instead. Additionally, some states require you to register before using a resale certificate.

You need a resale certificate for each state in which you have nexus.

3. To Whom Do You Give a Multi-Jurisdictional Resale Certificate?

If you’re a buyer purchasing items for resale, you present your certificate to the vendor. The vendor won’t charge you sales tax if everything is in order. 

If you’re a vendor who receives a resale certificate from a buyer, you must verify that the certificate is valid. Using sales tax software that includes automated compliance support helps you avoid accepting phony certificates (and the tax headache that can ensue).

4. How Do You Know If You’re Eligible?

A key way to know if you’re eligible for a resale certificate is to know why you’re buying certain items. Let’s say you run a business that sells custom-decorated notebooks. You buy a lot of 100 notebooks from an online seller. Since you plan on reselling them, you can use the resale certificate. 

But let’s say you run a non-profit and want to buy 100 notebooks to give away at an upcoming fundraiser. Even though you may be exempt from paying sales tax, since you aren’t going to resell those notebooks, you can’t use the multi-jurisdictional resale certificate.

As a seller, how can you ensure a buyer uses the resale certificate for legitimate reasons? One thing to do is confirm that they’ll be reselling the items they buy. It also helps to read the fine print on the form since each state has its own unique rules and details concerning certificate acceptance.

Worried about using a multi-jurisdictional resale certificate incorrectly? TaxCloud has you covered. Talk to us today to learn more about our compliance support.

Setting up a Sales Tax Compliant Ecommerce Tech Stack

Posted on by mruiz@taxcloud.com

Selling online makes it easy to grow your customer base and sell more. With the right ecommerce tech stack, you can streamline inventory management, shipping, and payment processing. What often gets overlooked when building the best tech stack for your business is sales tax compliance automation — and if you ignore the sales tax elephant in the room, you’ll likely wake up one day to a bill and nasty notice from a state.

Following a few do’s and don’ts will help you avoid hefty fines and unexpected bills so you can get back to business.

Do: Look for Sales Tax Software That Integrates With Your Ecommerce Tech Stack

Sales tax management should be simple. The best way to simplify your sales tax management is to use software that easily integrates with your current ecommerce tech stack. We’re talking a few clicks, and you’re done. You shouldn’t have to be a computer or accounting whiz to get everything set up.

Do: Make Sure You Calculate and Collect the Right Amount

Unfortunately, sales tax isn’t uniform across the U.S. Some states collect 6 percent, some 8.5 percent and some states don’t collect sales tax at all. Your business’ sales tax obligations can vary by state, based on your sales or transaction volume. 

Rather than calculating sales tax yourself for each of the sales tax jurisdictions in the U.S., let sales tax software do the math for you. When added to your ecommerce tech stack, your sales tax software will figure out your nexus (or connection to each sales tax jurisdiction), calculate how much tax you need to collect, and collect the tax for you with each sale.

Don’t: Pretend Sales Tax Doesn’t Exist

You can’t be an ostrich about sales tax, no matter how tempting it is to bury your head in the sand. Sales tax generates a considerable amount of revenue for states and municipalities. And those states want their money.

If you don’t pay up, they’ll come for you. And it won’t be pretty.

Don’t: Stress About Your Ecommerce Tech Stack

We don’t mean to scare you—sales tax shouldn’t make you lose sleep at night or cause you to abandon ecommerce altogether.

With the right sales tax software in your ecommerce tech stack, you don’t have to stress or fret about collecting, filing, or paying tax.

Do: Use TaxCloud

To avoid getting on the wrong side of the tax person, you need to do three things: calculate, collect, and file sale tax correctly. TaxCloud does all three for you. We like to say we eat sales tax for breakfast because we’re tax geeks and sales tax is what keeps us going. 

We created our sales tax software for growing companies and made it easy. While you can set up and use TaxCloud independently, we also have a team of TaxGeeks standing by, waiting to assist you however they can. 

Sign up for TaxCloud today and get your ecommerce business set up for success.

Here’s Our Guide To Sales Tax Nexus by State for Ecommerce

Posted on by mruiz@taxcloud.com

Life can be full of unpleasant surprises. A fly in your morning coffee, a best-forgotten ex calling you out of the blue, or an unexpected sales tax bill from a state you didn’t even know you were doing business in. Sales tax nexus varies by state, meaning your ecommerce store could trigger sales tax without you realizing it. 

We get it—you don’t want to have to think about where and when you need to pay sales tax, especially since there are more than 11,000 sales tax jurisdictions in the U.S. That’s why we make it easy to calculate your sales tax nexus by state and will even collect, remit and file your sales tax for you. 

What Is Sales Tax Nexus by State?

It is the connection your ecommerce business has to a particular state. It’s used to determine when you have to collect and pay sales tax.

Sometimes, sales tax nexus is easy to figure out. If your company is physically located in a state that collects sales tax, like Pennsylvania or New York, you must collect tax from customers in your home state.

Without nexus or a connection to a state, you have no obligation to collect or pay sales tax there. Nearly every state in the U.S. has at least one type of nexus.

How Ecommerce Complicates Sales Tax Nexus by State

Before 2018, companies triggered nexus when they had a physical presence in the state, such as an office or warehouse. That all changed after Wayfair vs. South Dakota.

In Wayfair vs. South Dakota, the U.S. Supreme Court ruled that a business doesn’t need to be physically located in a state to have a connection there. Companies simply need an economic connection to a state. Usually, that means a company needs to sell over a certain dollar amount to customers in a particular state or have more than a certain number of sales. 

What does this mean for your company? You may never have stepped foot in Oklahoma, but if you get popular there and have more than $100,000 in sales, you’ll need to collect and pay sales tax to the state.

How Do You Calculate Nexus by State?

You could crunch the numbers and determine your sales tax nexus in each state. But we know you have better things to do. That’s why we have a handy sales tax nexus by state chart. Just tap on the state you’re curious about and see the sales or transaction threshold that will trigger nexus.

If you want to take it a step further, TaxCloud’s sales tax software calculates your tax obligations in the 11,000-plus sales tax jurisdictions. We’ll collect tax for you if you need to collect tax in a certain state or municipality. Come filing time, we will even remit and file your tax returns. 

Nexus shouldn’t keep you up at night. Contact us today to learn more about what TaxCloud can do for you and sleep well tonight.

Does Etsy Collect Sales Tax? And Other Questions Multichannel Sellers Need Answers To

Posted on by mruiz@taxcloud.com

Does Etsy collect sales tax? What about Amazon Marketplace or eBay? 

If you sell through multiple marketplaces, the marketplace typically collects sales tax on your behalf, provided the item is taxable and is sold to someone in one of the states where the marketplace must collect tax. 

While marketplaces will handle sales tax collection and remittance for you, it’s still up to you to comply with all applicable regulations, especially if you sell in multiple places online.

How Sales Tax Applies to Marketplace Sellers

Things can get complicated when you sell through multiple channels. If you’re a multichannel seller, you must collect sales tax in every state where you have nexus, meaning you meet certain sales thresholds. 

Many states have rules that require the marketplace facilitator, aka Etsy, Amazon, and so on, to collect sales tax when the marketplace facilitator meets a certain sales threshold (which varies by state). 

So, provided you’re working with a marketplace facilitator with nexus in a particular state, it’ll collect sales tax for you. 

But, you should still be on alert, as you can have nexus in a particular state, even if the marketplace doesn’t. This is particularly true if you’re a multi-channel seller and you also sell through your own website.

Is your head spinning yet? Let’s take a closer look at how sales tax works on some of the most popular marketplaces.

Does Etsy Collect Sales Tax?

Yes, Etsy does collect sales tax in many (but not all) states. Etsy will automatically collect the tax on sales to people in the U.S., no matter where the seller is located, and when the order meets certain criteria. The marketplace facilitator also remits sales tax on your behalf.

There may be cases when Etsy doesn’t collect sales tax for you, but you still have an obligation to pay it. You can use Etsy’s sales tax tool to add the tax to applicable orders in that situation. Another option is to work the sales tax into the price of the items you sell.

Does Amazon Collect Sales Tax?

Like Etsy, Amazon collects sales tax on marketplace sales in certain states. Amazon will remit sales tax on behalf of the seller. 

Also like Etsy, a seller may have additional sales tax obligations and must ensure that they comply with applicable regulations.

Does eBay Collect Sales Tax?

eBay collects and remits sales tax on orders in 46 jurisdictions. Like Amazon and Etsy, if you sell on eBay, you’re responsible for complying with any applicable sales tax laws.

Does Bonanza Collect Sales Tax?

Bonanza also collects and remits sales tax on orders made by buyers in certain states. The marketplace facilitator works with TaxCloud to calculate, collect and remit the appropriate sales tax amount. 

How Do You Know Your Sales Tax Obligations? 

At this point, you may be scratching your head, stressing about ensuring you’re following all the sales tax rules and requirements. No one wants a hefty tax bill or a large fine. 

Forget about manually tracking each of the marketplaces you sell on. Instead, integrate TaxCloud sales tax software into your marketplaces so you can rest easy that the right sales tax gets calculated, collected, and remitted to the right states. 

We make multi-channel sales tax easy. Talk to us today to learn more.

Sales Tax Software Gets Your E-Commerce Business Filing-Ready

Posted on by mruiz@taxcloud.com

If your online vintage store sells a trinket to a customer in New York and another in Oklahoma, do you know how much sales tax to charge for each purchase? No need to lose sleep worrying that you’re not collecting the right amount –  sales tax software can do that for you. 

Forty-five states, plus DC, collect sales tax, at varying rates. On top of that, 38 states allow for the collection of local sales tax. That’s a lot of sales tax.

From calculating tax amounts to collecting them, sales tax software keeps you compliant without having to think about it.

 

What Is Sales Tax Software?

Sales tax software calculates, collects, and remits state and local sales tax for your business. 

In the past, businesses only had to collect state or local taxes if they had a physical presence in the state. That changed in 2018 when the U.S. Supreme Court ruled that a physical presence wasn’t needed for a business to collect sales tax in a state.

Now, e-commerce businesses that meet an economic threshold in certain states must remit sales tax to those states. Sales tax software takes on the role of figuring out where your business needs to collect tax and how much you need to collect from each sale.

 

Calculate the Right Sales Tax

Sale tax rates vary by state or locality. On top of that, the items that are subject to sales tax vary by state. Buyers in Pennsylvania don’t have to pay sales tax on clothes. Shoppers in the neighboring state of Maryland do. 

Sales tax thresholds also vary from state to state. Your business must start collecting sales tax in Pennsylvania once you hit $100,000 in sales. In California, the threshold is $500,000. Some states have a threshold of a specific dollar amount or number of sales.

It can be maddening to figure out how much tax to collect and whether you need to bother. But a sales tax software platform can do the math for you, even letting you know when your business has exceeded the threshold in a certain state and needs to start collecting.

 

Collect Sales Tax Online

You have to collect the right sales tax amount on each purchase. Sales tax software handles that for you, ensuring you collect the right percentage on the correct products. When tax filing time comes around, you won’t be left facing a steep bill you can’t pay.

 

Manage Exemption Certificates

Remember that not every buyer has to pay sales tax. Some states exempt non-profits from paying tax, and those with a multi-jurisdictional resale certificate can also get out of paying tax on certain purchases. You can configure your sales tax software to collect and apply exemption certificates, reducing everyone’s hassle and headache.

 

Create Sales Tax Reports

As tax filing season rolls around, you can use sales tax software to generate reports for each state where you had a liability. Those reports make it easy to file your returns with each state. Depending on your service plan, the software may even file your state sales tax returns for you.

You don’t want to think about sales taxes. So get a software program that does all the heavy lifting for you. 

If you’re ready to take the first step, get in contact with our team at service@taxcloud.net

Missouri: the final sales tax state to adopt economic nexus standards

Posted on by admin-taxcloud

It took a while, but as of January 1, the Show Me State became the final general sales tax state to require remote sellers and marketplace facilitators meeting economic nexus standards to collect and remit sales or use tax for sales to Missouri customers.

In the wake of the Wayfair 2018 decision by the U.S. Supreme Court overturning the longstanding physical presence test, by 2022 all general sales tax states but Missouri decided to use economic activity thresholds to determine which sellers and marketplaces must collect and remit sales or use tax in their states.

Missouri’s Particulars for Remote Sellers

Thresholds:  $100,000 in sales of taxable tangible personal property sold to Missouri customers and shipped into the state annually.  This includes sales through a marketplace facilitator.

Measurement Period: Each calendar quarter determine if your taxable sales into Missouri exceeded $100,000 in the preceding 12-month period.  When exceeded, you are required to collect and remit tax to Missouri no later than three months following the close of the quarter.

Marketplace Facilitators: The registration requirements, forms, and particulars regarding marketplace facilitators, including the availability of a Timely Discount, are more complex.  The Missouri Department of Revenue has Remote Seller and Marketplace Facilitator FAQs to answer questions.

Registration:  You can register online through the My Tax Missouri portal.

 

TaxCloud

The Bad News: The adopted standards are not ideal because the states have employed a complex array of rules or factors to determine when nexus is met.  The different factors by state include which sales count (gross, retail, or taxable only), whether marketplace sales are included, the value of sales and/or number of transactions that trigger nexus (there are six variations), the measurement period (there are six variations), and when remote sellers must register (there are seven variations).  The mix and match combinations the states have individually adopted are confusing at best.

The Good News: If you are a TaxCloud customer, we automatically track when you meet the economic nexus thresholds and standards in each state and begin collecting and remitting sales or use tax as required in each state. If you are not a TaxCloud customer, sign up at TaxCloud.com to keep up to date and compliant in the complex and constantly evolving world of sales and use tax.

 

TaxCloud is among those actively advocating to the states that they simplify matters by adopting uniform standards across the states that are easy to understand.

Vikki Smith: Innovation and Education Champion

Posted on by admin-taxcloud

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Vikki Smith recently retired from the Washington State Department of Revenue. She has worked her entire career at Revenue and served in a variety of leadership positions including Assistant Director for Taxpayer Services, Chief Information Officer and Deputy Director.

In 2015, Vikki was appointed by the Governor and confirmed by the Washington State Senate to serve as the Director of the agency. As Director, Vikki oversaw the agency’s transition from 40 disparate legacy systems to a single tax and licensing system; championed the “voice of the customer” approach to customer service; and continues to advocate for effective stakeholder and government to government relationships through the creation of the agency’s Business Advisory Council, the Tribal Tax Advisory Group and the annual Washington State Tax Conference.

Russ:  Vikki, we worked together for so many years it is a distinct pleasure for me to be able to talk with you today about your amazing career and the insights you’ve gained from and about taxpayers, and about how to be an effective and innovative tax administrator.

Let’s start with your career. It’s not just anyone who can start as a temporary clerk and rise to agency Director. You also received the Harley Duncan Award for Leadership and Service in 2012. That’s the greatest accolade a tax administrator can receive.  What is it about the Department of Revenue that made for you a 50 year career?

Vikki:  I certainly didn’t think when I started as a temporary clerk that I would retire after 51 years in tax administration.  It was because I had the opportunity to work with such amazing and dedicated employees and leaders. In addition, I got the opportunity to promote, take on more complex assignments and implement some crazy ideas.   As we all know, our tax laws are not only complex but constantly changing. Each day brought a new challenge, so I never felt bored.

I also think I had a calling to serve the public.  I took pride in the agency and the fact that the revenue that was collected helped fund critical services for Washingtonians.

Russ:  I want to focus on taxpayer education for a moment.  You will recall we worked with Speaker Ballard on a study of Taxpayer Rights and Responsibilities. He and Revenue Chair Wang became convinced additional budget for the Department should be provided so that we could educate taxpayers about their rights and obligations.  They wanted us to provide materials in plain language that would assist taxpayers in their voluntary compliance.  You led the first agency division that championed that effort.  When you look back on it, what did you, and the agency learn from that experience?

Vikki:  I do remember the study and the day that I was asked to become the agency’s first Taxpayer Rights Advocate. My division, Taxpayer Services, was asked to look for ways to implement the recommendations.   I created a team and they were dedicated to the Plain Talk effort reviewing all the special notices and form letters. The goal quite simply was to make them easier to read and understand.

I am proud that the agency still believes in the principles and has been recognized nationally. The agency has provided training to other state revenue organizations over the years. Plain talk is so easy to implement, and it confirmed my belief that taxpayers want to report and pay correctly. Businesses, especially small business owners, should spend time running their companies, not trying to read and reread something and then end up calling the agency.

Russ:  In what ways did the study and education efforts that came out of it change the culture of the Department of Revenue?

Vikki: Every function we perform at the department is critical and necessary to achieving performance goals, meeting our revenue commitment and statutory requirements.  When I think about the study and how we embarked on outreach and education I believe it resulted in a better balance.  It changed our understanding about how cost-effective outreach and education can be and how it benefits our customers. Audit and collection activities are needed but I have always believed we educate first to provide an opportunity for taxpayers to voluntarily comply. 

Russ: You have a strong technical background, having worked in leadership positions related to Information Services. In your mind, what are the most useful ways for a revenue agency to embrace technology.  And what are some of the pitfalls to avoid?

Vikki: Leveraging technology is essential to providing robust online experiences for staff and the customers.  Technology helps meet increasing workloads while dealing with limited resources. Taxpayers want and demand secure online services.

I served as a member of Washington’s Technical Services Board and was the acting CIO and director of the central IT department for six months. Combined with my experience as the agency’s CIO I was able to develop a strong technical background. This allowed me insight into not only how to embrace technology successfully but also how to recognize the pitfalls.

In terms of pitfalls, I have seen major projects in other agencies fail due to not having an effective project manager.  If you don’t have the in-house expertise, it is important to hire an outside consultant. This is a deal breaker if you don’t have someone with experience and may result in the project failing.

The other thing I have witnessed is not having an executive sponsor.  When you are spending millions of dollars it is critical that someone is monitoring the success of the project at the executive level. That individual should manage and watch for scope creep, make sure milestones are met and the project stays within the appropriated funding.

The other factor I witnessed is never underestimate the need for organization change management. It is critical to project success and should be included in the budget request. You don’t want to build a system no one wants to use and constantly complains about.

Finally, is the need to address fraud mitigation and the bad actors constantly trying to hack the systems. You don’t want to find yourself in the newspaper and having to explain to your customers what happened.  I was lucky and we never found the agency in this position.  Last thought on this question is to find yourself a top-notch IT security individual.

Russ:  You were often selected to lead team projects. What are some of the projects you led you are proudest of?

Vikki:  When I think about this question, I recall many different projects in which I have been involved in over my career. These range from implementing major technology solutions, to creating a targeted education program, establishing a business council and most recently a tribal tax advisory council comprised of DOR staff and tribes located in Washington.

Russ:  The projects you led and participated in often involved significant changes in how the agency operated.  In all large organizations change is often met with resistance or indifference.  You were always able to overcome that and create a culture in which line employees not only accepted change, but often championed it.  What kinds of strategies did you use? How did employees come to realize the benefits of active participation in making change?

Vikki:  The department has always embraced the idea of continuous improvement. To be able to work in this type of environment has been wonderful. Maybe it was dumb luck, but I seemed to always have phenomenal team members that worked with me championing new ideas. They were smarter than I, had diverse opinions and backgrounds.  In many cases, they became ambassadors and helped communicate the importance of the change.

One other strategy I used was to try to understand why some may have a problem or question the need for change.  It is important to talk with them to understand their point of view. Take that information and see if it has merit and make changes if necessary.

Russ:  What are the most important things you have learned from the Revenue Family at DOR, business leaders, other agency heads, and ordinary taxpayers?

Vikki:  I would also add other tax commissioners/directors across the nation to your list. I am a firm believer that you should never think you know all the answers. Each of those you have listed have been valuable resources for me over the years.  I have found they willingly share information when asked.  Better decisions and a path forward come from listening and learning from others.

Russ: If you could make any changes to substantially improve the efficiency and effectiveness of the sales tax system, both in Washington, and nationwide, what would you choose?

Vikki:  Continued efforts in uniformity.  As with most states, sales tax is one thing we  have zero authority to  settle. So having a system that is uniform and easy to administer goes a long way in helping taxpayers report and pay correctly.

In Washington, I would love to have a single rate across the state but that is a proverbial pipe dream.

Russ:  What do you think taxpayers, both individually and collectively, could or should do to improve the sales tax system and make compliance easier for themselves, their customers, and the public servants with whom they deal?

Vikki: Promoting voluntary compliance through outreach and education is critical. It starts with looking for ways to actively engage taxpayers and tax professionals. Taxpayers can help the agency by explaining the difficulties they experience when reporting and paying their taxes. This isn’t just with implementation of new legislation but also existing laws. Taxpayer feedback helps the agency provide information that is clear, timely and easy to understand.  I believe it directly benefits the taxpayers by helping them avoid the risk of compounding costly errors.

Russ:   I know of lots of difficult challenges you faced – technical, managerial, cultural – as an agency manager and leader.  I can recall you saying “Oh, Lord!” on occasion.  But there was usually a lilt to your voice when you said it.  Your “Oh Lord!” seemed to encapsulate both a recognition of the size, complexity, and difficulty of a challenge, as well as an eagerness to take it on.  That’s really more of a comment than a question.  But I would invite you to comment if you like.

Vikki:  I was always eager to take on new assignments, but I was also cognizant of the potential to fail.  So, my comment was more along the line of thinking I am really going to need help. At the back of my mind I was also wondering how many more priority projects we really could take on without risk of failure.

Russ:  It would be malpractice on my part, given your extraordinary career, not to ask you to advise those starting out what you think are the key things to make the most of every job.

Vikki:  In looking back, I was lucky to have others that I would consider a mentor.  When you start a new job look to see who you respect and learn from them.  Ask for advice.  Don’t be afraid to take on new opportunities. Develop work relationships internally and externally.  Be approachable and kind. Pay it forward.  Work hard but have fun.

Roger Geiger: An Independent Business Perspective

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Roger R. Geiger is a vice president/Ohio executive director for NFIB, managing the public policy, political, member activism and communication programs throughout the state. He also represents NFIB with national policy organizations. Mr. Geiger first joined NFIB in 1989 and has held a variety of leadership positions during his tenure. In recognition of his efforts to build the influence and clout of NFIB in Ohio, he has been consistently ranked in Smart Business Magazine’s “Power 100 Most Influential Leaders” in Columbus. He is regularly quoted in the media on issues of importance to small businesses. NFIB is a national association with chapters in all 50 states, and more than 25,000 members in Ohio – the largest state chapter in the organization.

Prior to being named vice president, Mr. Geiger served as the NFIB/Ohio State Director from 1989 – 2003. Mr. Geiger has been appointed, by four Governors, to several state boards and commissions. The most recent appointments have been to the Ohio Commission to Reform Medicaid, the Ohio Sunset Review Committee (a review of all state boards and commissions), and the Ohio Bureau of Workers’ Compensation Nominating Council. He has often testified before committees of the Ohio legislature and the U.S. Congress, and before regulatory agencies.

Before joining NFIB, Mr. Geiger served as Manager of Governmental Affairs for Browning- Ferris Industries of Ohio. He also served as a Legislative Assistant in the Ohio House of Representatives for almost five years. Mr. Geiger is a native of Marion, Ohio. He completed his undergraduate studies at Xavier University in Cincinnati and holds a bachelor’s degree in Political Science and History, and has a masters’ degree, in Business Administration, from The Ohio State University.

Roger, thanks for joining us today.  Your work with the National Federation of Independent Business (NFIB) gives you a unique and important perspective among the guests we have had.

Russ: I think a lot of people think of mom and pop storefronts when they think of small businesses. While government and private organizations have broader definitions they also have differing standards or definitions for what constitutes a small business that suit their organizational purpose, governing statutes, mission, and other factors.  How does NFIB define a small business?

Roger: For the purpose of NFIB membership you must be independently held and for profit – those are the only two criteria for membership.  NFIB’s membership cuts the small business community’s demographics by size, type and location.  A typical NFIB member is a private business enterprise that employees 25 or fewer people and has $1.5 million or less in gross revenue sales.  We represent what typically looks like “main street” USA.

There are no standard definitions of a small business but the most common definition that is used is the SBA’s definition it uses for its loan programs – 100 or few employees unless in manufacturing then it is 500 or few fewer employees.

Some interesting stats on small businesses:​

• 90% of all business’ employ100 or fewer and 8 out of 10 employ 25 or fewer
• There are more than 30 million self-employed Americans – the smallest of small businesses
• 70% of all Americans got their first paycheck from a small business owner
• Almost 50% of all non-government jobs are provided by small businesses
• The fastest growing segment of the business community in America are businesses owned by women and minorities
• 75% of all small business owners operate their business within 50 miles of where they grew up
• The average start-up cost for a small business is about $10,000 (usually financed by personal credit cards) 

Russ: What would you like our readers to know and understand about the history of NFIB?

Roger: NFIB is a 501 (C) 6 professional business organization that was founded by a group of California entrepreneurs, in 1943, who felt that big business, big labor and big government needed to make room at the public policy debate tables for small businesses.  Today NFIB is the nation’s largest advocacy organization exclusively representing independent business owners,with more than 300,000 members nationwide and chapters in all 50 states.  The primary mission of the organization is to be “the voice of small business” in Washington, DC and all fifty state capitols.

Russ: What distinguishes NFIB from other small business organizations.  What issues do you concentrate on and what services do you provide your members?

Roger: Three unique features of NFIB that separate us from most other business groups:

1) We are made up exclusively of independent for profit business enterprises
2) Our members get to set their annual dues between a minimum and a maximum amount, with dues capped, so no one company has controlling financial influence
3) Each member is entitled to one vote to set organizational public policy positions.  Every issue NFIB engages in, at the state or federal level, has been set by a survey of its members

The issues can vary at the federal and state levels, but generally NFIB engages in public policy debates on issues that effect a diverse range of businesses.  These issues include such things as workforce development/education, the legal environment, employment and labor issues, taxes and fees, access to quality and affordable health care, state and federal business regulations, workers’ compensation, unemployment compensation, environmental regulations, reliable and affordable energy, etc.

While influencing federal and state public policy on behalf of small business owners is our primary mission, NFIB, through its member services corporation, does provide the collective buying power of our membership to provide discounts for a limited number benefits such as insurance products, credit card processing, labor posters, computer needs and shipping.  In addition, through NFIB’s research and educational entity, we provide members with “how to” and compliance information, seminars and webinars.  Through NFIB’s Legal Center, we provide limited legal consulting services and represent the small business community’s interests in the state and federal count systems.  

Russ: I had the privilege of working with you as a representative for Washington State when the Streamlined Sales Tax Governing Board was developing policies in some key areas.  My recollection is that NFIB did not have a position on collection authority, but that you nonetheless were deeply engaged in questions such as the cost of collections and definitions.  What prompted your strong participation?

Roger:  You are correct, NFIB does not have a policy position on Streamline Sales Tax collection.  When NFIB has surveyed our membership on this issue several times in the past, we have consistently received a mixed response.  For NFIB’s “bricks and mortar” small retailers this is usually an impactful issue, for the rest of NFIB membership its perceived as a non-issue or and increased tax issue.  However, many of the secondary issues, within the streamline sales tax collection, have been of concern to NFIB and its members, especially small retailers. The big ones have been origin vs. destination tax collection, product definitions, small seller exemptions, and the cost and complexity of sales tax collections amongst the thousands of sales taxjurisdictions across the country for both small retail collectors and for small business consumers.

Russ:You continue to be involved with the Business Advisory Council to the Governing Board. Much of the early effort of SST was aimed at simplifying sales tax collection and compliance.  What do you think were the most important things accomplished in that regard?  

Roger:

• Standardization of taxable definitions – which also continues to be a challenge
• A small seller exemption which is lower than what we requested but there is at least one
• The development of competitive and robust CSPs
• The indirect “safe harbors” for small sellers who work through streamline and its infrastructure
• The slowing effect, on the part of participating states, to dramatically expand sales tax collections

Russ: What got left on the cutting room floor you now wish had gotten done?

Roger:

• A broader definition of a small seller exemption
• NFIB supported origin-based sourcing but recognize that genie is long out of the bottle

Russ: From NFIB’s perspective what are the most significant obstacles for small business success today and what should states be doing to address them?

Roger:

• A skilled workforce is the #1 issue facing small business owner across the country
• Still recovering from the shutdowns and economic slowdowns of the pandemic, the current challenges with inflation (the cost of doing business) and supply chain issues could not be happening at a worse time for small businesses
• Small businesses need predicable regulatory, tax and legal climates to thrive 

Russ: In the years you have been working on tax and other policy issues important to small businesses the business world has undergone some dramatic changes and innovations.  How have the challenges and needs of small businesses changed as a result?  

Roger: The answer is the dramatic changes in innovation, mostly in the world of technology, has been a double edged sword.  A lot of new innovations start in small firms and history has shown most innovations have come from entrepreneurs.   Who would have thought 5 or 10 years ago we would have such a robust gig economy dominated by individuals who work for themselves.  Innovations often bring new opportunities and great efficiencies to small companies but often they are costly to secure and, in some cases, impractical to implement.  Small businesses have been shown to generally be about five years behind the technology curve, which makes it difficult to standardize business processes and procedures across the business world.

Russ: And what new tools do they have to power their success?

Roger: I have often said, “if you have a cell phone, a laptop, and access to good internet at your favorite coffee shop, you can be involved in almost any business enterprise up to and including international trade!”  The most common response I get from any small business owner over the age of 40 as to what has been the biggest change they have witnessed in their business over the years … the answer almost every time is the use of technology – it doesn’t matter what type of business.  

Russ: If you could give just one piece of advice to legislators and administrators regarding how they shape tax policy and administration what would it be?

Roger: The biggest challenges for both public policy makers and regulators to understand is that a “one size fits all” approach never works for the small business community.  What you can ask the Fortune 500 companies to do and what is even in the realm of possibilities for small businesses to do is often dramatically different and usually gets lost in the debates.  Coupled with that is the lack of understanding of the tremendous amount of education and “ramp-up” time that is need for the small business community.  It is often underestimated and overlooked.

Russ: If you could give just one piece of advice to small businesses that are trying to navigate and comply with complex state and local tax and regulatory regimes, what would it be?

Roger: Don’t try and figure it all out on your own.  The advice I give to anyone starting or taking over a small business is to make sure you have a good team that includes an accountant, a lawyer, an insurance agent and a banker.  Don’t be afraid to admit that it is impossible to know all the rules and regulations you need to operate under, so seek good advice from multiple sources.  Most mistakes made by entrepreneurs early in their endeavors has to do with not getting good advice or getting no advice at all.  Just like most things in life, you are only as good as the people you surround yourself that you can count on for help.

To learn more about the National Federation of Independent Business visit NFIB.com