SALTovation: Navigating the Complexities of State and Local Tax by Aprio

In this episode of the SALTovation podcast, we speak with Florian Hanslik, a seasoned tax professional specializing in VAT. Transitioning from a rich background in politics to becoming an indirect tax expert, Florian discusses how his international upbringing and previous work with the European Parliament seeded his deep interest in global tax systems. Florian discusses the importance of understanding VAT in different countries, the role of comprehensive networks, and the need for businesses to be proactive in managing their VAT obligations, especially in an era of rapid e-commerce growth. Florian also notes significant future changes, particularly in the taxation of streamlined events, and underlines the necessity for companies to stay ahead of evolving tax regulations.

• Career Transition and Passion: Florian shares his journey from a political background to VAT specialization, inspired by his love for internationalism and global work environments.
• Importance of Networks: Building a reliable network of tax professionals globally is crucial for effectively managing VAT obligations across different regions.
• Evolving VAT Landscape: The rise of e-commerce has significantly impacted VAT regulations, requiring businesses to stay adaptive and informed about international tax laws.
• Future of VAT Compliance: Upcoming changes in 2025, especially concerning digitally streamed events, will require global businesses to reassess their VAT strategies and ensure compliance.
• Proactive Tax Planning: Florian emphasizes the importance of early and ongoing dialogue with tax experts to avoid the pitfalls of late compliance and unanticipated tax obligations.

Quotables

• "It's wonderful talking with the companies, understanding the issues and the questions they have. When you understand the VAT system in one country, you can use it in all the other countries. It's everywhere, more or less working the same, but with some local specifics.” -Florian Hanslik [08:05]

• "E-commerce platforms are now being taxed and marketplaces are taxed. Now we have big changes coming in 2025 where events that are streamlined are being taxed when it's streamlined to a private individual. So if there's an event in the U.S and somebody sitting in Switzerland is participating at this event because it is streamlined and they are paying for this, then this event organizer has to register in Switzerland and has to challenge VAT.” -Florian Hanslik [15:30]

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In this enlightening episode of "Women to Watch in Sales Tax," host Diane Yeter sits down with Tram Le, Senior SALT Manager at TaxOps, to delve into the intricacies of state and local tax compliance. Tram shares insights into the multifaceted services provided by TaxOps and underscores the importance of proper tax strategy and audit support. As an expert in the nuanced area of sales tax, Tram's perspective is a must-listen for those navigating this often misunderstood field.

TaxOps is portrayed as a small yet powerful boutique firm that is a one-stop solution for state and local tax needs. Tram emphasizes the critical nature of advisory services and the role of technology in achieving compliance. She also discusses her rewarding experiences as an educator at the University of Texas in Arlington, where she imparts her knowledge to graduate tax students. Tram's passion for teaching and her pride in enlightening students about the complexities of sales tax shine through, making this episode both informative and inspiring.

• Comprehensive SALT Services: TaxOps offers a full spectrum of state and local tax services, including consulting, advisory, audit support, and tax software recommendations.
• Educational Impact: Tram finds great reward in teaching state and local tax at the University of Texas in Arlington, noting the excitement and interest of her students as a significant accomplishment.
• Undervalued Field: State and local tax is often underestimated in terms of complexity and importance. Tram encourages professionals to recognize and value their expertise in this specialized area.
• Women in Sales Tax: Tram advises women in the field to be proud and confident in their work, recognizing the significant value they bring to their organizations.
• Continuous Learning: Staying updated and spreading awareness about the complexities of sales tax can lead to better compliance and a greater appreciation of the field.

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In this episode of the SALTovation podcast, Judy Vorndran focuses on the current challenges facing the accounting profession, particularly the shrinking pipeline of accountants. Judy highlights how the SALT field offers a dynamic and intellectually stimulating career path. She also discusses the various career trajectories within the field, from litigation to compliance to technology implementation, each presenting unique challenges and opportunities.

*The number of taxing jurisdictions in the U.S. is hard to capture at any one point since it is a moving target. As of June 2024, by some counts, there were over 13,000 taxing jurisdictions combined from 45 states and the District of Columbia, which have a general sales tax, and 38 states with local sales taxes.*

• Multifaceted Nature of SALT: The interplay between legal analysis and compliance makes the SALT profession both challenging and rewarding.
• Diverse Career Paths: Opportunities within SALT extend beyond traditional roles, encompassing litigation, technology, and international tax issues, among others.
• Intellectual Engagement: The logical and strategic aspects of tax law require creativity and decisiveness, making it an engaging field for problem solvers.
• Educational Gaps: There's an ongoing need for more focused SALT education in accounting and law programs, despite its pervasive impact on everyday life.
• Practical Impact: Knowledge in SALT is crucial given its daily impact, from sales tax to property tax, underlining the importance of skilled professionals in the field.

Quotables

• "As a CPA, you read the laws and you learn to apply them. That makes you a big part of America.” -Judy Vorndran [06:51]
• "Every single day we are all impacted by state and local taxes, our property taxes on our housing, our sales taxes on our food, our mobile telephone, our WiFi, and our electricity bill. There is tax all over the place in America and we just don't even see the bite-sized pieces it takes out of our pie.” -Judy Vorndran [09:30]

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In this episode of the SALTovation podcast, Diane Yetter, President and Founder of YETTER Tax and the Sales Tax Institute shares insights on streamlining tax administration, the impacts of COVID-19 on tax enforcement, and the critical importance of choosing the right tax automation solutions. Diane also addresses the complications arising from differing taxability rules within Colorado, Louisiana, and Arizona, highlighting the need for conformity and how the current tax automation tools often fall short. 

SALTovation listeners can get 10% off Sales Tax Institute training with discount code: SALTovation10

• Streamlining Tax Administration: The necessity for states, particularly those with home rule jurisdictions like Colorado, to simplify and unify taxability rules and compliance processes.
• Impact of COVID-19 on Tax Enforcement: Post-pandemic changes in audit practices and enforcement highlight the need for businesses to stay vigilant and prepared.
• Tax Automation Pitfalls: Common mistakes businesses make when implementing tax automation solutions without adequate consultation, and the importance of ensuring that tax software meets the specific needs of a company.
• Transaction Due Diligence: Insights into the due diligence process, especially in M\&A activities, emphasizing the risks of unknown liabilities and the benefits of voluntary disclosure agreements.
• Global Tax Compliance: Financial and administrative burdens faced by businesses selling internationally, with specific focus on VAT compliance in the EU and other regions.

Quotables

• “A lot of these newer, smaller platforms don't realize the complexities and are setting up their taxability rules based solely on what the state rule is.” -Diane Yetter [01:40]
• "Ignorance is never an excuse. If you are in business, you have an obligation to know all of the laws that apply to your business.” -Diane Yetter [24:15]

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In this episode of the SALTovation podcast, Judy Vorndran discusses the vital role data plays in sales tax compliance, especially in an era where businesses often operate beyond traditional storefronts. She elaborates on why software often fails to completely address tax needs, and takes an in-depth look at the complexities introduced by home rule jurisdictions and how they influence the overall tax compliance profile of a business.

*The number of taxing jurisdictions in the U.S. is hard to capture at any one point since it is a moving target. As of June 2024, by some counts, there were over 13,000 taxing jurisdictions combined from 45 states and the District of Columbia, which have a general sales tax, and 38 states with local sales taxes.*

Topics discussed in this episode:

• Data Integration: Properly integrating billing, inventory, and customer data is crucial for accurate sales tax compliance.
• Software Limitations: Many software solutions offer a minimum viable product that may not cater to specific business needs, highlighting the importance of manual oversight.
• Nexus and Tax Mapping: Understanding what constitutes nexus and accurately mapping taxability are key to avoiding compliance pitfalls.
• Home Rule Complexities: Jurisdictions with home rule can significantly complicate the tax compliance process, requiring businesses to stay informed about various state and local regulations.
• Automation Cycle: The cycle encompasses data gathering, system integration, and continuous updates to reflect changing tax laws and business operations.

Quotables

• "You need to understand all the things in the cycle, the entire machinery in your business process. We have had to morph our world of automation to understand that process." -Judy Vorndran [13:25]

• “The issue with home rules is that we don't have one system of record. We have several home rule states where there are separate filings for the cities than there are from the state. We have a subsystem” -Judy Vorndran [21:33]

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In this episode of the SALTovation podcast, Diane Yetter, President and Founder of YETTER Tax and the Sales Tax Institute returns to share valuable insights into sales tax education, significant legislative updates, and advances in the industry. Diane discusses the challenges businesses face with Nexus, audit complexities, and the importance of choosing the right sales tax software. She also shares her experience testifying before the U.S Senate Finance Committee, emphasizing the need for standardized e-commerce thresholds and reduced compliance burdens for businesses. 

SALTovation listeners can get 10% off Sales Tax Institute training with discount code: SALTovation10

Topics discussed in this episode:

• Sales Tax Nexus: Nexus remains a critical topic, with ongoing debates about physical and economic standards across different states.
• Audit Preparedness: Post-COVID, states are reactivating audits. Proper documentation and exemption certificate management are more vital than ever.
• Software Solutions: Companies must carefully select sales tax software that fits their specific needs, considering evolving sales channels and technological changes.
• US Senate Testimony: Diane Yetter highlighted the importance of reducing compliance burdens and achieving consistent economic Nexus thresholds.
• Continuous Education: The Sales Tax Institute offers numerous resources, including webinars, on-demand classes, and community forums that help professionals stay updated on tax laws and best practices.

Quotables

• “We really need to reduce the burdens on business. Physical nexus standards and inconsistent application of them across the states is an issue. We need to have some sort of consistency so that businesses know exactly what is going to create nexus.” -Diane Yetter [06:32]

• “There are many more products on the market today, so being able to share about that and also sharing: How do you go about selecting the right one for your business? There are so many out there, it's so easy to get confused about which one should I actually use. Which one meets your needs?” -Diane Yetter[18:06]

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In this episode of the SALTovation podcast, we continue our conversation with Nancy Prosser, General Counsel at the Multistate Tax Commission, on the purpose and work of the MTC in promoting uniformity and assisting taxpayers with compliance in state and local tax matters. She explains how the MTC develops model statutes and regulations, and the challenges they face in getting states to adopt them. Nancy also shares insights into the selection process for uniformity projects and highlights the current projects focused on the taxation of digital products and partnerships. 

Listen this week as Nancy addresses the complexities of adopting and adapting MTC recommendations and the role of stakeholder input in the process.

Topics discussed in this episode:

• The MTC's purpose is to facilitate the appropriate determination of tax liability, promote uniform tax systems, assist taxpayer compliance, and avoid duplicate taxation.
• States are sovereign entities and thus decide independently whether to adopt MTC's model statutes and recommendations.
• Uniformity projects at the MTC can be initiated by both member states and public stakeholders, showcasing a collaborative effort toward state tax policy refinement.
• The MTC actively studies tax policy and aims to offer resources and models to better handle emerging and complex tax issues, like the taxation of digital products and partnerships.

Quotables

• “It is an ongoing effort. I don't know that there's ever going to be a perfect way for the MTC to spread the word, but we appreciate opportunities again like this podcast and the technology that we have today to reach out and talk to people and do the best we can to explain who we are and what we do. We are hoping to develop good models that show people how to do it well and do it right.” -Nancy Prosser [10:03]

• “The essence to me of those projects are studying these areas to see, okay, what's going on in the economy on this front, what are the states doing or not doing and how, you know, collectively with, again, that stakeholder input, can we perhaps make recommendations that will help everybody do it more easily.” -Nancy Prosser [19:05]

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In this episode of the SALTovation podcast, we speak with Nancy Prosser, General Counsel at the Multistate Tax Commission. Nancy shares her experiences navigating through the complexities of introducing major legislative tax changes and discusses the intricacies of rule-making and policy development. She also talks about the importance of collaboration and transparency within the tax community, be it through engaging with different states' revenue departments or fostering constructive dialogues within the MTC.

Listen this week as we take a look at the evolution of tax legislation and policy from the trenches of legal administration to the broader scope of multi-state coordination. 

Topics discussed in this episode:

• Nancy Prosser's unconventional journey into state and local tax 
• The implementation of Texas' franchise tax reform: heavy emphasis on rule development, training, and taxpayer education to ensure a smooth transition
• The Multistate Tax Commission plays a pivotal role in addressing interstate tax policy issues and fostering a collaborative approach amongst state tax administrations.
• The symbiotic relationship between tax professionals across sectors and the mutual growth derived from sharing expertise.

Quotables

• “We brought the multistate tax commission in to do training to help taxpayers and practitioners understand how the comptroller's office was going to administer this very major shift.” -Nancy Prosser [08:38]

• “As I advanced through the agency and had more of a kind of global perspective on the agency itself in our work, it dawned on me more and more that decisions that were made in terms of tax policy did not just affect Texas, obviously, but did impact the world because so many people were doing business in Texas.” -Nancy Prosser [20:43]

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In this episode of the SALTovation podcast, we continue our conversation with Sandra Wiley, President of Boomer Consulting - an organization dedicated to guiding CPA firms towards success by leveraging leadership, talent, growth processes, and technology. From the hard truths about work-life balance to the strategic dilemmas CPA firms face, Sandra discusses the importance of embracing change, spreading decision-making power, and having the correct mindset. Listen this week as we talk about the growing significance of the accounting profession and the incredible potential it holds for future generations of professionals.

Topics discussed in this episode:

• The accounting profession is undergoing a transformative shift, prioritizing work-life balance and cultural adaptation in the recruitment and retention of talent.
• Effective leadership and navigating change are pivotal in the modern accounting landscape, particularly demonstrated during the transition to remote work practices.
• Creating uniform processes in CPA firms can significantly enhance efficiency, but success hinges on the commitment and adaptability of all team members, not just technology.
• The next generation of accountants is motivated by different values, such as community service and societal impact, requiring a shift in how the profession is presented to potential recruits.
• Unveiling the true functional dynamics within a firm leads to valuable process improvements.

Quotables

• “Firms today have to tune into what the next generation is defining as important to them. We have to meet them where they're at. We cannot impose our life and how we lived our life on them.” -Sandra Wiley [06:09]

• “The accounting profession is on the brink of being one of the most important professions in our entire world. It is right in front of us to start developing and changing that business model so that we can get there faster with our clients, to be their advisors, their consultants, and their partners in their businesses.” -Sandra Wiley [26:22]

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In this episode of the SALTovation podcast, we speak with Sandra Wiley, President of Boomer Consulting - an organization dedicated to guiding CPA firms towards success by leveraging leadership, talent, growth processes, and technology. Sandra shares her unique perspective and critical strategies that drive CPA firms. Building a connected community through meaningful relationships can enable firms to create a culture that fosters collaboration and allows individuals to thrive. Listen this week as we discuss the progressive edge of CPA firms today, focusing on community, leadership, and diversity.

Topics discussed in this episode:

• CPA firm consultation: focusing on community, holistic leadership, and innovation
• Community building is crucial, particularly with remote work, fostering relationships and collaboration 
• Holistic leadership: considering the whole person, integrating personal and professional lives for a balanced approach to management.
• How CPA firms are evolving in an increasingly competitive space
• Proactive adaptation to automation and resource diversification is key to future-proofing CPA firms 

Quotables

• “When I think of holistic leadership today, it's looking at the whole person. When we look holistically at who people are, the human side of them, they are personal and professional. Diversity and inclusion and feeling like you belong somewhere, that is a part of well-being.” -Sandra Wiley [13:15]

• “Young people are coming into firms today with a long list of all the questions they have for ‘what are you going to do for me?’ There are a lot of people who hate that, but that's what they're doing. They're going to come through the door and ask ‘What kind of training are you going to give me?’, ‘What do I do if my kids are sick? Can I work from home three days a week? If we don't have good answers, they will walk down the street and find another company that will give them what they want.” -Sandra Wiley [25:00]

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