Since the groundbreaking Supreme Court decision in South Dakota v. Wayfair last June, tax compliance requirements of sellers have undergone a seismic shift. In recent months, we have also witnessed a series of after-shocks directed at setting the foundation for U.S. sales tax compliance in the modern age.

Join us on July 25th at 11 a.m. EDT for a live interview and Q&A with Chuck Maniace, Vice President of Regulatory Analysis & Design at Sovos.

 
In this live webinar, Chuck will:

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Date: July 25, 2019

Time: 11am EDT

Duration: 60 minutes (including Q&A)

Sovos S1: Delivering Modern Tax Software

The Sovos Intelligent Compliance Cloud sits on a unique cloud software platform that is built to bring previously disparate tax solutions and data together for use wherever your business operates—through a single platform.

The S1 architecture allows Sovos to do the hard work for you, adapting to changes in technology requirements and government regulations – and giving you access to the tools and data you need to run your business anywhere in the world through a consumer-grade user experience.

Datasheet

Global Tax Determination

Technology disruptions and increasing customer demands are driving significant, rapid and constant business changes for growing organizations. Likewise, regulators are also sharing more information with each other and using technology to enable increasingly complex rules and capture more detailed transactional data.

Sovos Global Tax Determination gives you the capabilities you need to keep your business ahead of rapid regulatory change and safeguard your organization from risk.

The Chief Procurement Officer may not be the first employee that comes to mind when the acronym CPO is used, yet over 100 of them joined Ardent Partners in Boston a few months ago at the CPO Rising 2018 Summit to exchange and improve the procurement function through innovation and thoughts around P2P, accounts payable process automation.

In its 2018 Ardent Partners’ 13th annual “State of ePayables” report, the analyst firm argues that despite most businesses going through digital transformation to digitize the entire business, Accounts Payable departments may require both a business catalyst (such as improving procure-to-pay operations) and a strong executive sponsor (CFO) or functional partner (like procurement) to earmark dollars and initiate the transformation.

Top accounts payable process challenges

Invoice exceptions were stated as a top challenge by 41 percent of the organizations in the “State of ePayables” report. While there are many reasons an exception may occur, increasing time to acquire missing information and approvals, and missing out on early payment discounts, can both cost a larger organization significantly and frustrate suppliers.

Comparing this to a survey by America’s SAP Users’ Group (ASUG) conducted on behalf of Sovos, it’s interesting to point out that “time to verify accuracy of tax charged on vendor invoices” was by far the top challenge for managing tax compliance in the procure-to-pay process.

Given 24 percent (Ardent survey) of the average AP staff’s time is spent working directly with suppliers to fix invoice, processing and payment errors, and 53 percent (ASUG survey) of department managers indicated only doing a manual verification or manual spot check of tax treatment on invoices, bills or payments, automating the tax validation process on supplier invoices should be a viable solution to improve procure-to-pay and accounts payable process operations.

“The bridge to an intelligent AP function is not built on a single technology or strategy, but rather a series of new innovations and systems that are interconnected and can effectively “speak” to each other in near real-time, producing actionable intelligence across a wide range of corporate arenas, such as supplier management, strategic sourcing, financial management, compliance, cash management, and payment management.” – Ardent Partners

Sales and use tax factors in vendor invoice validation

Improving AP efficiency and accelerating supplier invoice payments starts with the automation of core financial processes, and many leading businesses are years into these projects. Yet, these automation solutions are not as efficient as they could be if procurement and tax teams are still spending a good part of their time chasing down the data needed to confirm an invoice is accurate in the first place. Incorporating a solution like Sovos Use Tax Manager, an invoice reconciliation tool that ensures a supplier charges the correct sales and use tax, can be a key piece of the procurement puzzle to increase straight-through processing (STP) and reduce monthly over and undercharges. Items on an invoice may be incorrectly assessed for sales and/or use tax based on a number of factors, such as is the item exempt based on:

Some suppliers are better than others at getting this tax treatment correct but usually don’t have enough information to make the correct assessment. Manually reviewing thousands of invoices per month isn’t feasible for AP and tax teams, so they typically resort to spot checking the invoices over a certain dollar threshold.

Wayfair economic nexus Puts a wrench in invoice tax treatment

Speaking of thresholds, manufacturers will find suppliers starting to charge sales tax in light of the South Dakota v Wayfair Supreme Court decision. The number of sales or invoices, not just the dollar amount, also comes into effect, only increasing the number of invoices with invalid tax treatment. Manufacturers should pay closer attention to the invoices received from suppliers in the wake of Wayfair and also self-assess use tax as appropriate if they don’t want their procurement process efficiencies to decline.

Take Action

Learn how Sovos Use Tax Manager can safeguard your business against the burden and risks of procure-to-pay sales and use tax compliance, give your tax team the visibility and control needed over tax data on every purchase – without slowing down your Accounts Payable process.

Comprehensive assessment highlights key benefits of Sovos’ “sophisticated cloud tax software”

BOSTON (PRWEB) January 28, 2019

Sovos, a leading global provider of tax software, today announced it is recognized as a Leader in the inaugural “IDC MarketScape: Worldwide SaaS and Cloud-Enabled Sales Tax and VAT Automation Applications 2019 Vendor Assessment.” According to the newly released report, Sovos is ideal for “businesses in search of a sophisticated cloud tax software capable of supporting large, multinational tax and e-invoicing regulatory demands.¹” The IDC MarketScape report details Sovos’ depth and breadth of experience in e-invoicing compliance and also notes the company’s cloud infrastructure and support for customers in more than 60 countries as core strengths.

“Multinational companies are struggling with the shifting tax regulatory landscape,” said Kevin Permenter, senior analyst at IDC. “Sovos offers these organizations tremendous value by providing coverage for every form of transaction-level tax compliance in one solution. As a result of this differentiator, we expect Sovos to continue to expand its market presence.” IDC Names Sovos a Leader

A complete solution on a reliable, scalable and secure cloud platform
The report highlights Sovos’ strong cloud software solution, the Sovos Intelligent Compliance Cloud, which is the world’s first complete solution for modern tax. It combines traditional tax determination and reporting tools for sales and use tax, VAT and other transactional taxes with modern, digital reporting and e-invoicing compliance software. The solution is supported by the company’s S1 cloud platform, which enables Sovos to do the hard work for businesses, handling their compliance across all financial systems, while supporting them with highly reliable, scalable and secure cloud infrastructure.

The world’s first global e-invoicing compliance solution
As governments around the world – from Brazil to Italy – race to close value-added tax (VAT) gaps, they are implementing various e-invoicing compliance models, a tax modernization system that requires companies to comply with indirect tax laws at the invoice level. These new requirements, which are often real-time, are pushing the digital transformation of every financial system.

According to the IDC MarketScape report, “multiple customers cited Sovos’ capability with e-invoicing compliance as one of the major benefits of choosing their solution.”¹ Today, Sovos eInvoice provides coverage to countries in Europe, Latin America, the Middle East, Africa and Asia Pacific.
 
Global reach
As the report mentions, Sovos has aggressive growth plans. Over the past five years, the company has made eight acquisitions, which have propelled its footprint and coverage into 60 countries. With 12 offices spread across three continents, Sovos now safeguards more than 5,000 global customers that do business in the world’s most complex regulatory environments.

“Traditional tax software wasn’t built for today’s era of digital tax enforcement. In response, we’ve built a complete, modern cloud software solution that prepares businesses for a world where tax is part of every transaction,” said Andy Hovancik, president and CEO at Sovos. “We’re committed to helping our customers build tax into the digital financial core of their business where it belongs, so they can Solve Tax for Good and focus more time on growing their businesses.”

IDC MarketScape is the premier vendor assessment tool for the information and communications technology (ICT) industry. The report provides in-depth technology market assessments of ICT vendors for a wide range of markets. The comprehensive assessment of market competitors offers critical information needed to evaluate technology solutions.

Read the IDC MarketScape report brief.

About Sovos
Sovos is a leading global provider of software that safeguards businesses from the burden and risk of modern tax. As governments and businesses go digital, businesses face increased risks, costs and complexity. The Sovos Intelligent Compliance Cloud is the first complete solution for modern tax, giving businesses a global solution for tax determination, e-invoicing compliance and tax reporting. Sovos supports 5,000 customers, including half of the Fortune 500, and integrates with a wide variety of business applications. The company has offices throughout North America, Latin America and Europe. Sovos is owned by London-based Hg. For more information visit www.sovos.com and follow us on LinkedIn and Twitter.

About IDC MarketScape
IDC MarketScape vendor analysis model is designed to provide an overview of the competitive fitness of ICT (information and communications technology) suppliers in a given market. The research methodology utilizes a rigorous scoring methodology based on both qualitative and quantitative criteria that results in a single graphical illustration of each vendor’s position within a given market. IDC MarketScape provides a clear framework in which the product and service offerings, capabilities and strategies, and current and future market success factors of IT and telecommunications vendors can be meaningfully compared. The framework also provides technology buyers with a 360-degree assessment of the strengths and weaknesses of current and prospective vendors.

1.         doc #US43263718, January 2019

Media contact:

Christina Dela Cruz on behalf of Sovos

christina@arpr.com

855-300-8209

As part of the Fiscal Year 2020 Executive Summary, Rhode Island Governor Gina Raimondo, proposes imposing a sales tax on digital downloads of videos, music, and books.  Additionally, the summary proposes the elimination of a loophole that allowed online third-party marketplaces to avoid sales tax.  At this time, there is no further legislative language describing exactly when or how these changes will come about.  We will be monitoring closely and will provide updates accordingly.

In addition to the modernization changes regarding digital and online transactions, the Governor has also recommended adding additional services to the sales tax base, such as lobbying, interior design, services related to commercial buildings, and hunting activities.  

Please find the FY 2020 Executive Summary here.  

 

The New York Department of Taxation and Finance has issued Notice N-19-1 announcing its intention to enforce collection of sales tax from remote sellers. The Department has found that the United States Supreme Court ruling in South Dakota v. Wayfair (138 S.Ct. 2080 [2018]) has activated New York Tax Law 1101(b)(8)( i )(E) and 1101(b)(8)(iv). A vendor for sales tax purposes is now defined to include a person who, within the last four sales tax quarters, made over 100 sales of tangible personal property into New York and whose cumulative total of gross receipts from such sales exceeds $300,000. The notice states that sellers who meet this threshold should register to collect sales tax immediately. While additional clarity is needed on when the Department will begin enforcing the new collection obligations, the notice does indicate that it views NYTL 1101(b)(8)( i )(E) as having taken effect immediately upon the issuance of the Wayfair decision in June, so it is advisable that remote sellers should take immediate action to adjust for new tax collection obligations.

For more details on remote sales in New York please see the Department’s website.

See our more detailed blog article as well, here: New York Implements Economic Nexus by Resuscitating 1980’s Law

In response to the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Pennsylvania will soon require certain out-of-state retailers to collect and remit sales tax on sales into Pennsylvania. Beginning July 1, 2019, out-of-state retailers are required to collect Pennsylvania state sales tax if their gross sales into Pennsylvania exceed $100,000 during the previous twelve months.

These new economic nexus rules do not replace the provisions of Act 43 of 2017 (Marketplace Sales Act). Out-of-state retailers with sales into Pennsylvania of $10,000 or more, but that do not exceed  $100,000, must still make an election to either collect and remit Pennsylvania state sales tax or comply with detailed notice and reporting requirements.

For more information on Pennsylvania’s new requirements, please click here.

 

Last year, the Wyoming Department of Revenue (DOR) announced new “economic nexus” rules, expanding the number of businesses that will be required to collect and remit tax on sales made into the state.

We have recently confirmed with the Wyoming Liquor Control Division (LCD) and the DOR that licensed wineries making direct-to-consumer (DtC) sales to Wyoming residents will also be required to collect and remit sales tax, if they meet the new nexus thresholds.

For details, visit the ShipCompliant by Sovos blog.

The Colorado Department of Revenue has readopted temporary emergency regulations to require out-of-state retailers that are doing business in Colorado and have substantial nexus with the state to collect Colorado sales or use tax. Out-of-state retailers are considered to have a substantial nexus with Colorado for sales tax purposes if the retailer’s gross revenue from the sale of tangible personal property or services delivered into Colorado exceeds one hundred thousand dollars or the retailer sold tangible personal property or services for delivery into Colorado in two hundred or more separate transactions. The Department has extended out-of-state retailers a grace period until May 31, 2019 to comply.

In response to the U.S. Supreme Court’s decision in South Dakota v. Wayfair, California will soon require certain out-of-state retailers to collect and remit use tax on sales into California. Beginning April 1, 2019, out-of-state retailers are required to collect California state use tax if their sales into California exceed either $100,000 or 200 or more separate transactions during the current or preceding calendar year.

For more information on these new requirements, please click here.

Also beginning April 1, 2019, all retailers, whether located inside or outside of California, are responsible for collecting and remitting California district use tax if during the current or preceding calendar year the retailer’s sales into the district exceed $100,000 or the retailer made sales into the district in 200 or more separate transactions.

For more information on the new requirements to collect district use tax, please click here.

The Colorado Department of Revenue ("the Department") has just issued a "News Release" that has extended their grace period for in-state and out-of-state retailers from the current March 31, 2019 deadline to May 31, 2019. The Department previously indicated that retailers that do not collect sales tax during the grace period must still comply with Colorado’s reporting statute (C.R.S. § 39-21-112(3.5)) which requires non-collecting retailers to provide certain notices to Colorado purchasers as well as to the Department of Revenue. The Department had also previously stated that the reporting requirements for retailers that do not collect tax during the grace period will be strictly enforced. This news release does not rescind these previous statements regarding the reporting statute.

On November 15, 2018, Arkansas House Bill 1002 was filed and introduced in the Arkansas legislature. This bill if passed will require certain out-of-state sellers to collect and remit Arkansas sales and use tax. The bill imposes a threshold similar to many other states throughout the country, which obligates remote sellers who sell either $100,000 or more, or 200 transactions or more of tangible personal property or services into Arkansas, to collect and remit the Arkansas sales and use tax. If passed, this bill would become effective on the first day of the calendar quarter following the passing of the bill. More information on the status and details of the bill can be seen here. The language of the introduced legislation can also be seen here

The Colorado Department of Revenue has updated their guidance for out-of-state retailers regarding the new destination sourcing regulations that will go into effect on December 1, 2018. The Department of Revenue is offering a grace period to out-of-state retailers through March 31, 2019 to comply with the new destination sourcing rules. Previously, this grace period was only available to in-state retailers. The updated guidance indicates that out-of-state retailers will be automatically granted a waiver from compliance with the destination-sourcing changes. Retailers that do not collect sales tax during the grace period must still comply with Colorado’s reporting statute (C.R.S. § 39-21-112(3.5)) which requires non-collecting retailers to provide certain notices to Colorado purchasers as well as the Department of Revenue. The Department has indicated that the reporting requirements for retailers that do not collect tax during the grace period will be strictly enforced.

To see the published guidance click here.

Watch the Sovos Sales and Use Tax solution video to learn how it can reduce your risk and burden:

Sales and Use Tax Software: Reporting & Filing Automation • Sovos

In reaction to the U.S. Supreme Court’s decision in South Dakota v. Wayfair, the District of Columbia (D.C.) has introduced legislation that would expand the district’s sales tax collection requirements to retailers without a physical presence in the district. Bill 22-914, the “Internet Sales Tax Amendment Act of 2018,” would require remote sellers to collect D.C. sales tax if the retailer had either in excess of $100,000 in sales into D.C. in the previous or current calendar year, or 200 or more separate transactions. While the legislation still needs to be approved by the D.C. Council and Mayor, it appears as if D.C. may soon join the growing number of states that require remote sellers to collect and remit sales tax.

For more information on the proposed legislation, click here.

 

From November 15, 2018, through January 15, 2019, New Jersey is offering taxpayers the opportunity to clear their tax debts. For taxpayers who choose to file and pay the taxes owed, the state will waive most penalties and reduce interest.

Taxpayers will only pay the amount of tax owed and one-half of the balance of interest due (as of November 1, 2018), without any penalties, Referral Cost Recovery Fees, or cost of collection fees. Taxpayers also avoid a 5% amnesty penalty that the state will impose on all eligible tax balances remaining after the amnesty period ends. The amnesty penalty cannot be waived or abated.

For a full list of details regarding NJ Tax Amnesty click here.

 

Australian Treasurer, Josh Frydenburg, has announced that the Australian Government is taking steps towards removing the 10% GST that is imposed on feminine hygiene products in Australia. Frydenburg stated last week that it was the intent of the legislature to have an exemption in place by January 1, 2019 for these products. This announcement comes ahead of any legislation being presented to Parliament. 

 

The State of South Dakota has entered into a settlement agreement with the companies of Wayfair, Overstock, and Newegg. The settlement effectively ends the litigation between the state and the three online retailers that refused to comply with South Dakota’s remote seller law. In 2016, the South Dakota state legislature passed legislation requiring out-of-state retailers to collect and remit sales tax similar to in-state retailers if they have more than $100,000 in sales or complete more than 200 transactions per year within South Dakota. Litigation between the state and the defendants over the remote seller law landed the parties before the United States Supreme Court which eventually ruled in the state’s favor. The settlement agreement resolves all remaining issues not addressed by the Supreme Court's ruling. Under the terms of the agreement, the defendants will comply with South Dakota’s remote seller law beginning January 1, 2019. For all other retailers who meet the remote seller thresholds, they are required to collect and remit sales taxes beginning November 1, 2018.

The Wyoming Department of Revenue has updated a bulletin clarifying that out-of-state retailers that make more than $100,000 of gross sales into Wyoming or engage in 200 or more separate transactions annually will be required to collect and remit sales and use taxes on all sales made on and after February 1, 2019 that are delivered into Wyoming. “Gross sales” includes the total revenue generated in Wyoming including taxable, exempt and wholesale sales. Furthermore, the collection requirement will only be enforced on a prospective basis.

To see the bulletin, click here.

Beginning December 1, 2018, the Colorado Department of Revenue will require in-state retailers to collect and remit state sales tax and any applicable state-collected local and special district taxes based on the jurisdiction’s tax rate at the point of delivery. This requirement includes deliveries of taxable goods to Colorado addresses that lie outside the retailer’s jurisdiction. Retailers will need to add non-physical locations to their Revenue Online account for each state-collected location they deliver to.

To see the announcement click here.