December 3, 2024 • 60 mins
Avalara joins us to discuss when adding Avalara to your QuickBooks Online and how that helps stay in Sales Tax Compliance.
QB Power Hour is a free, biweekly webinar series for accountants, ProAdvisors, CPAs, bookkeepers and QuickBooks consultants presented by Michelle Long, CPA and Dan DeLong who are very passionate about the industry, QuickBooks and apps that integrate with QuickBooks.
Watch or listen to all of the QB Power Hours at https://www.qbpowerhour.com/blog
Register for upcoming webinars at https://www.qbpowerhour.com/
00:43 Meet the Hosts: Michelle and Dan
01:04 Sales Tax Discussion Kickoff
01:22 Introducing Avalara Experts
02:44 Challenges with Sales Tax Setup
04:30 Avalara's Role in Simplifying Sales Tax
06:07 Panel Introductions from Avalara
12:42 Davo by Avalara: Automating Sales Tax
23:37 Avalara's Suite of Services
30:38 Address Validation and Tax Jurisdictions
31:47 Integrating Avalara with Business Systems
33:01 Avalara's Partnerships and Integrations
34:13 Handling Complex Tax Scenarios
38:08 Automating 1099 Processing
40:05 Economic Nexus Tracking
43:02 Sales and Use Tax Calculations
46:07 Voluntary Disclosure Agreements
47:18 Davo vs. Avalara for Tax Filing
56:26 Bundling Services and Sales Tax Implications
59:39 Conclusion and Next Steps
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Dan DeLong (00:30):
Hi, Michelle.
How are you?
Michelle Long (00:32):
Hey, Dan.
I'm great.
How are you doing?
Hope you had a goodThanksgiving.
Dan DeLong (00:37):
Yes.
We hope everybody did have agreat Thanksgiving.
Matthew, always good to see youas well.
Matthew Fulton (00:44):
Hello, everybody.
Thanks for having me back on.
I'm excited to talk about salestax.
I
Dan DeLong (00:49):
don't believe you.
Based on your conversation ofwhat you said the last time
about how you don't like salestax.
I don't think you're beingtruthful.
we have a star studded panel of,of folks from Avalara joining us
(01:11):
here today.
And, if we could have those thatare presenting from Avalara
joining come off, put their, putthe camera on, we do have some
others that are just helpingwith the, the Q& A and such, but
our topic today is Like wetalked last time about the sales
(01:35):
setting up sales tax inside ofQuickBooks online with Alicia
did a great presentation.
He has a great course on herwebsite about, setting up sales
tax inside of QuickBooks online.
But as she mentioned at the endof that, there was there, it's.
It's the shallow end of the poolwhen it comes to some more
(01:56):
complicated setup of sales tech.
So we wanted to have the, ourfriends at Avalar joining us
here today, to talk about someof those situations when.
You're butting up against thetop of what QuickBooks Online
will do with regards to salestax calculation and set up.
(02:20):
So we wanted to have them comeon and talk about some of those
things that, that they can, helpwith.
Now, Matthew, last time youtalked about, The fact that you
don't care for sales tax at alland and so I wanted to start the
and kind of frame theconversation about As an
(02:42):
accounting professional, whenyou have those engagements with
your clients, and there arethings that you don't like to
do, because I know Michellehates payroll and taxes, right?
Like how do you frame that andset that expectation up with
with your clients so thatEspecially it's a core
functionality of a business ofhow to do things in sales tax is
(03:05):
such a core functionality.
How do you keep that separate?
Matthew Fulton (03:10):
It's a really difficult thing to try to get
out of is the best way I can sayit.
So usually when we're like firstmeeting with a client, we're
trying to figure out whatservices they need and if
they're going to have morecomplex sales tax, it's
something we let them know rightaway.
That we have referral partnersthat we would involve or bring
in that they would help handlethe sales tax.
(03:31):
When you start getting stuff,that's really, complicated and
they're adding differentproducts and services all the
time, it just becomes so muchextra work.
And we explained to him, it'snot a part of the normal
pricing.
So it's an add on is how wehandle it.
I have not been successful atreally getting away from doing
sales tax.
We just try to find the best wayto make it as easy as possible.
Dan DeLong (03:57):
Michael Corleone in Godfather, right?
They keep pulling you back in.
Matthew Fulton (04:02):
Pretty
Michelle Long (04:02):
much, yeah.
One of
Dan DeLong (04:03):
those things.
Michelle what do you suggest?
Michelle Long (04:07):
I was going to say one of the things about
sales taxes is you don't knowwhat you don't know.
And that's why I love Avalaraand AviTax is because they made
me realize like I always thoughta Hershey bar is a Hershey bar
is a Hershey bar until theyeducated me that a Hershey bar
with almonds is food and it'staxed one way and a Hershey bar
(04:27):
without almonds is taxed adifferent way.
I had no idea.
Same thing with things likeToothpaste.
Does it have fluoride or does itnot have fluoride?
They're taxed different.
Who knew?
And that's where I realized, Ohmy God you can have three houses
together and the middle house istaxed differently than the
houses next door to them.
(04:48):
I had no idea.
And that's where With havingAvalara be on previously, and
that's why when I saw them atthe conference, I think it was
last year at Scaling New Heightsor something, I said we need to
have you all back on againbecause this is an area of so
much vulnerability.
Because if you get it wrong, thepenalties and interest can cost
(05:09):
a lot.
And again, there's so much thatyou don't know, and it's gotten
more complex than ever with theeconomic nexus and everything.
And this is an area I think weneed help in because a lot of
us.
Don't specialize in sales tax.
And it's easy with everybodydoing online sales now to get
yourself in trouble.
And so I'm very glad to have himback on today to help us learn
(05:31):
more about what we don't know.
And I like to just outsourcethis stuff to somebody smarter
than me, because I don't want toknow it because I don't like
taxes.
So I would rather just havesomebody else be responsible
because there's too many detailsand too much stuff.
Absolutely.
Dan DeLong (05:49):
So I want to let's go around the horn here and and
introduce the panel fromAvalara.
So I'm going to go from my rightto left or left to right or
bottom.
I don't know who the Brady bunchzoom session that we have here.
But Chris, if you want tointroduce yourself and say where
(06:10):
your, what your specialty isover at Avalara.
Kris Pupilli (06:14):
Yeah, absolutely.
And we did so funny enough, Danand Michelle, we did a trivia at
our booth and Michelle, I thinkyou would have won the sales tax
trivia with that intro there.
That was fan, the candy bars andthe toothpaste and everything.
But my, name's Christopher.
(06:34):
I.
I've been with Avalara since2014.
In Care2Venture, I've probablyforgotten more about sales tax
than I ever thought I wouldknow.
And my specialty is Dan,Michelle, Matthew, the, you
folks on the call today, I leada QuickBooks team, that we sell
(06:58):
almost exclusively to companiesusing QuickBooks.
Hopefully that is, that willsuffice, Dan.
Dan DeLong (07:06):
Yes, it will.
It will.
And Chris, Christina.
Cristine Vickery (07:10):
Hi, everyone.
I am a strategic partner managerat Avalara, focusing on our
point of sale partners mostly,but I came from the Davo side of
Avalara, Davo by Avalara, andI've been with Avalara since
January 2022.
Almost three years.
And I actually was a franchiseowner myself for 12 years.
(07:33):
And I can't express to you howmuch I wish Davo existed for my
business back then.
I hated filing sales tax.
And I remember a couple of timeschoosing to pay it late so that
I could leverage those sales taxdollars for my own.
And that is definitely a badhabit for business owners.
So I'm very passionate.
About Avitax, Avalara, and Davoby Avalara.
(07:57):
And thank you for letting me behere today.
Awesome.
Dan DeLong (08:01):
And Beth?
Beth Raymond (08:03):
Hi, everyone.
Nice to meet you.
My name is Beth, and I am withDavo by Avalara one of the
products.
And I handle all of thecompliance for Davo merchants.
Davo does integrate with,QuickBooks Online as a, for
(08:24):
people using it as a POS system.
So we have a direct integration.
And then I also have beenhelping out lately with all the
other inbound customer, supportand merchant facing areas for
Dabo.
Dan DeLong (08:41):
And before we get to Heather here, I'm going to
launch the 1st poll because yes,there is CPE for this for this
session.
Our friends at MakerTub are arehelping out with that.
So we want to be able to, Provethat you were here and the poll
questions are a way that the waythat you can do that.
So Heather late entry into theinto the Brady Bunch here.
(09:05):
What what do you do over atAvalara?
Heather Lopez (09:08):
Hi so nice to see everyone and thank you guys for
attending.
My name's Heather Lopez.
I'm out of Seattle and I'm withAvalara and I actually am on the
Avalara for Accountants channel.
So my role here is to support onhow and.
Manage how we work with ouraccounting partners.
I've been with Avalara for fouryears now.
I actually first started in ourstrategic initiatives group.
(09:29):
So I was more focused onexercise side of things.
And so we recently launched theAvalara for accounts channel,
which I transitioned to a littleover 2 years ago to help launch
this channel.
And as we grow our relationshipswith our partners.
Dan DeLong (09:44):
Excellent.
Thank you.
Thank you all for, joining us.
So we'll, as you have, as youmight have guessed we're gonna
try to keep this conversationalas, opposed to being
presentational as we have donein the past because there's just
so much to, know and to talkabout with regards to the sales
tax in general.
(10:06):
So we're, gonna dovetail off ofour last our last webinar where
Alicia talked about the, settingup a QuickBooks online sales
pack, and then where you'repushing the envelope of, things
that you might want to do.
And I think David over at DavoDavid Joseph, who graded Davo
(10:31):
said it best, I think when hewas on a prior webinars with us
that there's no value.
To doing sales tax to a businessowner, right?
It's, a compliance thing.
It, there is they have to do it.
But there, there really is novalue.
(10:51):
And I'm always remember my myexperience with the Arizona
department of revenue.
Not that I had a directedintegration with them, but I had
a friend who worked at theArizona department of revenue
and they managed the collectionof sales tax as well as the
income tax in in local Tucsonoffice.
(11:15):
And it was like clockwork wherethey would always have someone
come in and say, I can't affordto pay sales tax.
And then, of course, theirquestion to them is, what are
you doing spending the state'smoney?
And that, that kind of leadsinto this whole thing about how
(11:36):
business owners perceive salestax as it.
From an accounting perspective,everybody probably on the call
is of course you're you don't dothat, but they're looking at the
money in the bank, and spendingbased off of what's in the bank
and not realizing that some ofthat is to be earmarked or
(11:59):
separated or segregated from Theregular cash flow activities
that they are normally doingthey can certainly get in, get
themselves into trouble withpayroll liabilities as well.
But sales tax in an accountingbeat is a liability that they'll
have to pay, there'll be holdingthat for on behalf of the state.
(12:23):
And so 15, I wanted to ask youhow that kind of, how that's
solved by something like Davobecause of how it, actually
works between, saving, thecompany from themselves, with,
(12:44):
regards to sales tax.
Cristine Vickery (12:46):
Sure, absolutely.
Let's face it.
Managing sales tax is doing ajob for free for the state.
You don't get paid to do it.
It's basically you're riskaverse.
I'm going to go ahead and sharea screen, not to be over
presentation like, but just sowe have the visual learners as
well as the auditory learnerscovered.
But when you think about it, caneveryone see my screen okay?
(13:08):
Okay, beautiful.
I think we all know the problemis that the sales tax dollars
mingle, they co mingle with thebusiness working capital.
And because they're mingled,it's, it's, it, people, they can
spend it, it can, payroll cancome up on the same day that
your sales tax is due and, Davohelps this by moving the cash
(13:29):
dollars out daily.
And because if you don't do thatand you miss it, you're looking
at anywhere between 20 and 30percent in penalties and late
fees for your customers.
And that's good.
That's awful.
So what Delva will do is it'llgo into QuickBooks and it will
pull down the previous day'ssales and sales tax
transactions.
Now, there is a stipulation inQuickBooks that you have to be
(13:52):
using it for your invoices andyou have to have the status of
paid for the invoice and paymentstatus has to be closed.
Otherwise, Davo will not see ityet, but we'll go in and look at
QuickBooks from the previousday, pull down those sales tax
dollars and take them out sothey're not commingling.
And then Davo has the the salestax dollars to go ahead and file
(14:14):
and pay on time guaranteed.
And we do look for the propersales tax ability to be correct
in QuickBooks, of course.
And this is really great for 54.
99 per month.
I will tell you that.
Effective February 1st, thatprice will be moving to 57.
99 or 58 almost, and it givesyou a lot.
(14:37):
You get support for all of that,but also to keep in mind there
for when you file and pay ontime, you do get a rebate and
over more than half the statesin the U.
S.
And this is important because itcan make Davo either free or
substantially discounted.
And so those, are really the,the main nuggets really is why
(15:03):
spend A, your time on it, Bit's, you're doing a free job
for the state.
And just like Dan said, it's notgoing to give you more
inventory.
It's not going to give you moreemployees.
And it's really there's no valueto you except for not wanting to
pay late fees.
I'll stop sharing just so we cankeep this conversational.
Dan DeLong (15:22):
And what, they, what I really liked about cause when
we had Alicia on last time aboutif you set up, QuickBooks online
with regards to collecting thesales tax properly, This is the,
this is a great add on oraddition to it because that's
(15:43):
really where Navo excels, right?
It's.
If you're setting it upproperly, then, Davo will,
intercede by impounding the,liability so that it doesn't
show on their, money that'savailable to to spend.
(16:05):
And then, everything thathappens after the sales tax
collection is then automated,right?
Is that, right?
Really a nutshell of what Davo,how Davo works
Cristine Vickery (16:16):
in this.
It is, it's mostly automated,but we do have Beth could attest
to, we do have professionalfilers on staff and that's
another reason why yourcustomers can feel great relief
and trust and giving that.
That task to Davo, because youcan know that it's going to be
done properly and that weunderstand it as well as on
(16:40):
time.
So it's really, yes, we do agreat job of moving the sales
tax dollars out.
So we don't get you in troubleand keep you out of that risk.
And you have a truer sense ofthe value and profitability of
your business.
And it's certainly at leastlooking at your checking account
to that extent, but also it'sgoing to be done right.
Yes,
Matthew Fulton (16:59):
real quick.
There's a question inside thechat, which we just want to draw
attention to.
They were asking the pricingthat showed was the 55 per
location.
Just for a bit of clarification.
I believe that's discussingeither per state is what you're
that you have to do filing.
And is that correct?
Or what do you mean?
Cristine Vickery (17:17):
That is per location.
So if you have four restaurants,for example, or for retail
locations, then it is perlocation per month.
And that covers up to threefilings.
And it's funny too, when youtalk about sales tax, a lot of
business owners don't realizethat if they leave their
business and they owe sales tax,that it follows them personally.
(17:41):
So it's a really good tidbittoo, to help them.
Keep that risk away from, theirfinancial livelihood.
Michelle Long (17:49):
So I just wanted to clarify we talk about if it's
set up properly and stuff.
So do you all do that?
And we talked about the Hersheybar and the toothpaste how is
that something that you all makesure it is set up properly?
Cristine Vickery (18:05):
Davo does not do that.
We are a service that we trust.
It's correct in QuickBooks.
So how do
Michelle Long (18:11):
we get, how do we as the accounting professional
get help with that?
Don't you all have a servicethat helps us with that as well?
Cristine Vickery (18:17):
That's going to be the Avalara side, I
believe not the Davo is the sortof, you have all of the merchant
journey that they go through.
And part of that journey isSetting up their business
properly with the proper taxcodes and categories, right?
And Davo comes later.
So the Davo that we're justtalking about now, that's really
that, Hey, let's finish thatlast step.
So you don't have to ever belate and know that it's done
(18:40):
right based on what we'reseeing.
So that would be before thatjourney.
Okay.
Yeah.
Dan DeLong (18:46):
Would that be more of a Heather question or a Chris
question?
Cristine Vickery (18:52):
That is a great question.
Dan DeLong (18:54):
Pick
Kris Pupilli (18:55):
your poison, right?
I can start and then Heather cancertainly add some color.
Yeah, so as far as, That initialsetup goes we do have
implementation specialists andwe do have customer support and
I can actually, I have a fewscreens pulled up.
(19:17):
I think this was Particularlydiscussing tax codes.
Is that fair?
Dan DeLong (19:25):
Yeah.
What do I, how do I know thatI've set up my, my my sales tax
correctly in, inside of quick,because as we talked about last
time, it, lists all of thecategories, but how do I know
I'm choosing the right one?
And, I think you guys have apretty good resource to help
with that.
(19:45):
Of course, it's.
focused on setting this upinside of Avalara or AvaTax as
your flagship tax calculationproduct, but it would still be
available or they would be ableto help help determine what
these sales tax categories orclassifications are.
Kris Pupilli (20:03):
Yeah, absolutely.
I guess we could take this acouple different ways.
The first, you is, this is apublicly facing resource here
and it's our Avalara tax codes.
And so we just, we have, I'lljust type in shipping because
(20:23):
any company that sells productsthey're going to have to ship
and we have differentdefinitions.
Of the types of shipping so youcan come in you find the one
that most closely relates toyour business typically this fr
is what's most frequently usedand then You'll associate that
(20:47):
with the shipping line item andi'm gonna what i'm gonna do here
is i'll just for fun We'll builda tax matrix just so you can see
Normally, you
Dan DeLong (20:58):
don't say fun and sales tax in the same sentence,
but
Kris Pupilli (21:02):
Yeah I'm really doing this for Michelle.
So next time she sees this, shecan brag about Hey, how is
shipping taxed differently?
So we have all the US armedforces, but you'll see that
shipping is taxed verydifferently.
across the country.
Most of it, it's going to betaxable, but then there's also a
(21:23):
number of states where it's taxexempt.
And this is to Michelle's pointabout fluoride and almonds and
all that, it's almostimpossible.
To keep up with all of this,right?
Like how would, one businessknow, Hey I'm selling to
Michigan and Minnesota, theMinnesota stuff, the shipping is
(21:43):
going to be taxable.
The Michigan stuff, the shippingis going to be tax exempt.
Matthew Fulton (21:50):
I'm quickly remembering my.
pain points from the last one.
This becomes somewhatchallenging with this example
and keeping us on topic of thequestion.
In the past, I worked with aprecious metals company and we
helped them actually set upAvalare for a full website, like
API wise.
And during the process, Ilearned if you sell more than 1,
(22:13):
500 worth of precious metals atone time, They're non taxable.
If it's less than 1500, it istaxable.
So in that kind of scenario,this, I think this is where
trying to determine whether it'sa DAVO or an AvaTax, as your
liability increases for thatstuff, it makes more sense to be
stepping up to the higherplatform where you can really
(22:34):
map each individual item andhave those special rules.
Is that fair to say?
Kris Pupilli (22:40):
Yeah, absolutely.
And I think a more.
Precious metals, it's a, it's anindustry we run into.
But I think something that mightbe a little more applicable
would be clothing and apparelbecause there's a couple of
states that have taxabilitythresholds for clothing and
apparel, and they're rightaround the a hundred dollar
mark.
(23:00):
So if you're selling into thestate of New York and you're
over 110, that clothing andapparel is going to be taxable.
If somehow you're findingclothes from New York that are
less than 110, you're going toget those tax exempt.
So
Dan DeLong (23:22):
Heather or Chris, if, I think one of the, one of
the aha moments that I had when,orbiting the booth around at
some of the conferences and notnecessarily wanting to, or do I
want to step into this, wholenature of, sales tax, could you
(23:48):
that the set the stage, becauseone of the, one of the webinars
that, that we had you guys onwas where you just laid out the
framework of the suite ofservices that that you guys
offer, because I think a lot of.
Folks in the accountingcommunity are timid to to, to
cross into that threshold ofokay, what am I getting myself
(24:11):
into by interfacing with Avalar,but there are pick and choose
your own adventure types of waysto, work with.
And we just talked about thatwith Christine about you could
just do Davo, and that if I'mcomfortable setting it up
properly and I have thatconfidence that I have done
(24:31):
that, Oh I can just.
Add on this Davo add on to theQuickBooks Online to pretty much
do the crockpot method of salestax, where I put all my
ingredients in and theneverything else is then handled
for me.
What other let's talk about thatabout what other sweets and
(24:52):
services or services that youguys offer?
Because I saw in the chat do youguys offer?
Sales tax certificates andthings like that.
Heather Lopez (25:03):
Yeah, great.
Great point, Dan.
There we go.
This is it.
We can, so what's nice is thatthere's so many different ways
that you can work with Avalara.
And we've been around for solong 20 years now and every
anytime someone sees orange,they usually associate Avalara.
(25:23):
And so we try to make sales tax.
Fun as possible.
And what's nice is that weactually created an entire
channel.
Dedicated for our accountingpartners 4 years ago, so still
relatively new.
And to avalare and how we workwith accounting partners.
There's actually 3 differentways.
And Chris, if we could go aheadand look at that slide.
(25:46):
How we 3 different ways we canwork with our accounting
partners.
If we can.
I think it's the 1 or 2 beforethis.
Oh, I'm so I'm a visual person.
So it's just easier for us.
Everyone to see, how we workwith our partners here.
(26:10):
And so traditionally, oh, goahead, Matthew.
Matthew Fulton (26:13):
I was just gonna say, as he was pulling it up
there, there was a question andlet's say it a little bit.
I'm going to throw you off a bitof maybe at some point touching
base on if you're using a stripeor square for certain things.
If you have different channelsin different ways, tax has to be
collected and then reported howthat comes into play with this
as well.
Heather Lopez (26:33):
We, can definitely get into that here.
Let's bring it up here.
But it's a great point.
So here is the different waysthat we work with our accounting
partners.
Traditionally, how we've alwaysworked with our accounting
partners and how we still do isthrough this first motion here,
which is our referral motion.
And so if your client has a needmaybe they need to collect
(26:54):
exemption certificate managementor automate that process.
Maybe they have an issue withthey're doing some kind of
communication or excise tax somesort.
You can refer that over toAvalara and either you can, we
actually redid this entireprogram this year and which is,
an awesome about this program istraditionally if you refer
(27:16):
something over to us it's agreat way to add a revenue
stream to your firm.
You can earn commissions onanything you refer over to us or
you can pass on automaticdiscounts.
Within that referral program,there's.
Marketing materials if you wantto work closer with us, there's
different levels and way you canwork with us.
(27:37):
The more we work together, thinkof it as an airline program.
The more you fly, the morepoints you get, the more you
work together with us.
And as helping your clients thehigher incentives you can earn.
So there's, an entire packagewith our partner program and
it's totally free to join.
So if your clients have somekind of sales tax or if they're
(27:58):
selling online, or if they'reselling or however they're
transacting, they're most likelygonna come up with sales tax.
That's a great way to work withus in our partner program, and
it's free to join.
Now, the next motion here isthis implement motion, and so
you can actually becomecertified to implement Avalara
solutions for your clients.
Now, if your end client, they,honestly, it's.
(28:21):
Sales taxes can be verydifficult.
To navigate.
And so that's also another areaor another opportunity for you
to make additional revenue atyour client.
Instead of Avalara doing theonboarding, that'd be an
opportunity for you to do theonboarding for your client.
So you can become certified todo that.
(28:42):
I think that was maybe one ofthe questions here.
And then the last motion here isthe tools motion.
So what tools can Avalareprovide you as an accounting
partner to maybe do some ofthese functions?
Maybe, you're not a sales taxexpert, but your clients come to
you often asking to help withreturns, maybe.
(29:03):
And so we've we also have builta tool.
It's actually the same tool thatwe use internally to file
returns on behalf of ourclients.
We file over 7 million a year.
We actually are the largestsales and use tax filer in the
U.
S.
Same tool that we use to fileour returns.
We put a user interface on itspecifically for our accounting
partners.
(29:23):
That way you can file returnsfor your clients by leveraging
Avalara's team.
Dan DeLong (29:30):
So it's not it's not just one size fits all when it
comes to how, you can come workwith Avalar.
And I see a lot of questionscoming in does it work with
Stripe or does it work withthis?
That's, another option.
But when it comes to QuickBooksonline, Chris, I think maybe you
(29:52):
would be the best person toanswer this about what is Ava
tax?
And how does that differ fromAvalara in general?
Kris Pupilli (30:02):
Yeah, that's a fantastic question.
So what Avitax is, that's ourflagship product.
So that is our sales taxcalculation engine.
With that, we're able to do acouple of really cool things.
The first part is we validateyour address.
(30:23):
So when that comes through we'regoing to do an address
validation.
That helps with bad shippingcharges or anything like that.
I don't know if anyone's everran into those.
But I did work for a TMS companyand part of our discovery was,
hey, do you use Avalara?
Because they wanted to know ifyour shipping address was going
to be correct.
(30:44):
So that's one piece.
Then what we do is we actuallydrill down Into the latitude and
longitude.
So when Michelle was saying nextdoor neighbors having different
tax rates it's a true thing.
Shopping malls can potentiallywe have a couple of examples of
shopping malls that havedifferent tax rates.
So we drill into that.
(31:06):
So we find the correctjurisdictions and then we find
what those tax rates are.
And we look for any specialsourcing rules.
Some states are origin, somestates are destination, some
states are a hybrid.
And then we make that taxdetermination and pack it, pass
it back to your business system.
(31:27):
And yeah, go ahead.
Dan DeLong (31:30):
now when like when, things get complicated which is,
a great use case for Avalara.
When they're selling online andthey're using Stripe or Square
or some other kind of point ofsale system and QuickBooks is
somewhat involved, in the, wholesituation, I think it's
(31:55):
important to understand What Iwill have a tax would interface
with, or can it interface withall of them and just be that
single source of truth for forsales tax.
But like the example of, Hey,I'm doing some sales inside of
QuickBooks online.
And I'm also, I also have an ecommerce channel.
(32:17):
That, I might need to, collectsales tax on, but that data is
not coming into QuickBooks in a,format that will.
Cool.
Utilize the sales tax engineinside of QuickBooks where would
that best be?
How would that work with thattype of situation?
Kris Pupilli (32:37):
Yeah.
So Dan that's a really coolquestion.
just because of the way thatAvalara was built, we were built
on these partnerships and wehave over 1, 400 different
business systems that trustAvalara to integrate into and be
part of their system.
So when you have, and I'm justthinking, I'm just using this as
(32:58):
an example, partially becauseyou and partially because of
Susan in the chat.
So you have a company that'susing a Shopify or that's using
a QuoteWorks or a Jobber, andyou have QuickBooks on the back
end.
Avalara has the ability tointegrate into all of these
platforms.
Kind of like a wheel withspokes.
(33:19):
So Avalara is going to be thatcentralized point of truth.
And then we have these pre builtintegrations into all these
different platforms so that youhave your centralized point of
tax truth.
And then we can ping out andsend those tax determinations
into whatever business systemyou need.
Dan DeLong (33:40):
And then if you don't have, if you don't want to
integrate them directly, You canjust, you can also just import
those transactions into, Avitaxto make sure that it's,
calculated properly, right?
Kris Pupilli (33:52):
Absolutely.
Absolutely.
Michelle Long (33:55):
while we're talking about these complex kind
of things or whatever, we didhave somebody that asked can we
connect Avitax for a companythat invoices in QBE inside
RightWorks?
So in a host enterprise,
Heather Lopez (34:10):
absolutely.
Yes.
Kris Pupilli (34:13):
Okay, so I think I heard your question.
And I don't know what happened.
I keep getting kicked.
Keep getting booted out of here.
Yeah, so if you're so we, wehave a great partnership with
right works.
They're one of our, one of ourlarger QuickBooks partners and
(34:35):
we have an integration forQuickBooks Enterprise.
So we have that configurationis, no, that configuration is
quite common for us.
Dan DeLong (34:49):
So the so the, in just in general, like how does
Avitax interface with theseintegrations?
Does it sit in between the salesand the collection of the sales
tax?
And then what does it do as faras If you were to use this with
with QBO to make sure say, youdon't, say you don't trust
(35:13):
QuickBooks online.
I don't know why you would dothat.
It always worked.
But if you have some of thesecomplicated setup and you are
integrating with Avitac with,QuickBooks online, how does that
work?
How does it, is it a, I hate touse the word seamless
integration, but that is theterm that people will use, how
(35:37):
does it, how does that work whenyou're integrating with some of
these with something that is thesales and then calculating the
sales tax.
Kris Pupilli (35:45):
Yeah, I'll do my best to not use that word, Dan.
But we are, so we, areintegrated in a way that looks
and acts just standardfunctionality.
So go ahead, Matt.
I saw you come off mute.
Matthew Fulton (36:06):
I think the key to this right workflow wise
would be You want your avatarsyour avalara program to
integrate directly to whateverthird party application that's
going to be responsible forcreating the invoicing And this
figuring out the sales taxthere, that way, whatever it's
going to calculate appropriatelythere, and then their sink of
(36:28):
that third party app, which goesto QuickBooks online would be
pushing into QBO the correctamount, the invoice with the
proper sales tax amount, becausethe Avalara product would be
handling that calculation.
Based on whatever third partyapp that you're doing it with.
And then if it also wouldconnect to QuickBooks online, if
you do your sales from there forthose ones to then combine
(36:49):
everything together to give yousingle reporting with totals for
everything.
Kris Pupilli (36:55):
Yeah.
Yeah, you seem like you've donethis before.
Matthew Fulton (37:00):
A couple times.
Dan DeLong (37:03):
So I launched the second poll question because I
realized we're just chattingaway and we're not taking the
poll questions and those thatneed CPE we need to do that.
Prior to this webinar, this isthe question.
What.
What did you think Appalaraspecialized in, which the, this
is a multi choice questionbecause as we're discovering
(37:26):
Appalara does more than thanwhat we had thought, like even
the 1099 processing is is,something that that you guys can
handle.
Is that more of a question forHeather or, Chris or both?
Kris Pupilli (37:41):
I'd say that's more of a, that's more of,
Heather is more, much morefamiliar with the 1099 process.
Okay.
So how does that work?
Heather Lopez (37:50):
So we acquired a company called Track 1099.
I think it's about 2 years agonow to now offer a way to
automate and streamline the 1099collection and filing process.
Additionally, we can collect W9sall year round.
And also it's a very easy way togain consent.
For electronic delivery insteadof mail, because I know that's a
(38:12):
huge thing, trying to reducemailing costs as post, I think,
when our postage went up toalmost 90 cents this year.
If you're trying to reduce that,is a great way to handle that.
And so you can either foraccounting partners that are
maybe filing 1099 on behalf oftheir client.
Very easy way to streamline andautomate that process as we can
(38:34):
file all the do all the efiling, state filings, mail and
the W 9s, or if you have aclient that maybe handles it on
their own, they can also sign upwith us directly for account to,
to also streamline and automatethat process, and then 1099
season is coming up.
Before you know it, it'll beJanuary and it's crunch time.
(38:55):
If you haven't already,definitely check us out.
It's still tracked 10 99.
But we now it's gonna berebranded to Avalara 10 99, but
our website is track 10 nine.com
Dan DeLong (39:06):
and there will be orange somewhere included in
that
Heather Lopez (39:09):
Sure.
Yes,
Dan DeLong (39:12):
Lucky.
Guess question, question thatthat popped up there as soon as
you started talking about 10 90,can you do amended.
1099s with with Track 1099.
Heather Lopez (39:23):
So we can do corrected 1099.
It's free to do if, as long asthe 1099 was originally filed in
Track 1099, we can file thecorrection.
So say if you're using adifferent provider before and
started using Track 1099, youwouldn't be able to file the
corrected form if it was doneoutside a different software
before.
It's a great question.
Dan DeLong (39:47):
All right.
so who wants to talk about Nexustracking?
Because you have a really coolthing.
Like we, we talked about it lastweek about.
Inside of QuickBooks Online, youdo have this economic nexus
tracking ability but it's moreof a report and and that sort of
thing.
(40:07):
Can you, are you able todemonstrate what it looks like
and how the economic nexustracking works in Avitax?
Kris Pupilli (40:16):
Dan, I sure hope so, but we'll see every time
I've gotten called on, I gotkicked out.
Okay.
Dan DeLong (40:23):
We'll try to hold on to you here.
Kris Pupilli (40:26):
I, what I'm showing right here, this is the
home screen for an Avalaraaccount.
So the first thing you're goingto see when you log in or at
least I see my eyes go to thismap over here on the right.
And what this is showing is thisis essentially a showing you a
(40:47):
snapshot of where you or yourclient has created economic
nexus.
So when I click into thedetails, you can see.
That we have a number of statesthat are orange.
And if you look over here,you'll see your sales threshold.
So these are the states wherethe thresholds have been met.
(41:08):
It shows your threshold, as wellas what your sales were.
And it lets you know that you'vecrossed, essentially you've
crossed that threshold, and it'stime to get registered.
Dan DeLong (41:21):
And then, that is a service that, that Avalar can
handle as well.
It's okay, I've.
Now that I've crossed thatthreshold, now what?
I can lean into Avalara to beable to set that up.
Properly, right?
Kris Pupilli (41:38):
Yeah.
And yeah, that's and that'sperfect because we have an
ability to do that right herefrom the screen.
It will take you to where youcan buy registrations right here
online or a lot of theaccounting firms that we're
working with, or pro advisorsthat we're working with will do
(41:59):
those registrations.
And then it's very simple.
You'll check the box for the newstate once you're registered.
So it's just a check box of allthe different states.
And then something else, Dan,that Avalara offers is a sales
tax risk assessment.
And this is something that wealways recommend when we're
(42:20):
first talking with businesses,especially businesses that have
been established for a littlewhile.
And there we find out for somereason or another tax wasn't
collected properly.
Hey let's do a risk analysis andtake a look back and see if
you've created a lot ofuncollected liability.
Matthew Fulton (42:41):
So I want to get a little nerdy on one part of
the question.
The calculation of the salestax.
When you have companies that ifyou're buying and you're paying
sales tax on certain products,interior design is what I think
of right off the bat, they'rebuying this stuff.
They've already paid the salestax.
So now within theircalculations, they need to
reduce the amount of sales taxthat they're actually liable
(43:03):
for.
So it starts to be coming,tracking the expenses on the.
I'm sorry.
The tax on the expense side.
Is there a way within avalare tohandle that?
Or is there a form where we canadd that number in to make sure
the tax is correct?
Kris Pupilli (43:20):
Yeah.
Yeah, absolutely.
So it's too I think where you'regoing, Matt, is that sometimes
there is going to be, there'ssales and use.
And yeah that's, absolutelysomething we can do.
We are currently working on anintegration into the AP side of,
(43:40):
for, with Intuit but right nowit is a, it's a manual upload
and what you'll do is you'lljust upload those purchases into
Avalara.
It's an Excel sheet, an Excelfile.
You just throw your purchases inor your or your services.
And then we can take whatevertax you populated, or we can
just calculate that use tax onyour behalf.
Michelle Long (44:05):
So Chris, I had a question for something you said
right before Matt's question.
You said the risk assessment,you can help to determine
something Back liability forbasically they had sales where
they didn't charge sales taxes.
So there's liability where theydidn't collect it, but they may
(44:25):
have that liability if they getcaught or audited or whatever.
Do we as the client recommendthey go back and file amended
and fix it?
Fess up to, Oh, wait, we did itwrong and pay it out of their
own pocket.
Or do you help advise when youdo that risk assessment or when
we come and say, Hey, thisclient has been doing it wrong.
(44:48):
How do you help us to decidewhat's the right course of
action in that?
Do you help in thatdetermination after you do that
risk assessment and stuff?
Kris Pupilli (44:58):
Yeah.
Yeah.
Michelle, I will give you theproper answer.
And then I
Michelle Long (45:06):
will
Kris Pupilli (45:07):
tell you what I tell.
I tell the companies that I workwith.
We always initially the rightthing to do is you should come
clean.
But that's not always going tomake the most sense for the
(45:27):
companies.
So just, for example, we'll justuse this Alaska, example they're
going to have about 284, 000worth of sales that they did not
collect sales tax on, right?
If we take the national, I'mjust going to use round numbers.
(45:48):
So 10 percent sales tax plus25%, penalties and interest.
They're going to somewhere inthe ballpark of 40, 45, 000 in
uncollected tax and penalties.
If they were to get caught,Michelle would 40, if you were
to get caught with 45, 000,would that be a big detriment to
(46:12):
your business?
Oh yeah.
And so that's the conversationsthat we have.
And then we have specialagreements with the various
states where we have we canlimit that liability look back
period so that, hey, maybe youdon't owe tax for the last seven
or eight years.
Maybe you only owe tax for thelast four years or the last
(46:35):
three years.
So we can limit that, historicalliability.
And then we also have anagreement for penalty abatement.
As well.
So we have that 25.
I think Christine said 25 to 30percent penalty.
It's very state by state, but wehave agreements with the state
to help with that penaltyabatement as well.
Dan DeLong (46:58):
Okay.
Great.
Now, I guess the biggest, thingthat I want to make sure that
people understand, especiallywhen it comes to something like
Davo and Avitax, you guys Avitaxor Avalara has its own filing
and remitting service, that'spart of, that's part of Avitax,
(47:20):
and then, There's Davo that hasa file and remitting service
where is the line between thetwo if you're working with
habitats or avalara in thatcapacity.
Do you go with Davo or do you gowith the file and remittance?
I can probably have a text.
Cristine Vickery (47:38):
Yeah, I can probably speak to a little bit
of that demo is meant to becompletely automated.
There is no you get to reviewthe returns and then they're
done there.
We will automatically take careof it.
And if you are looking forreviewing the process and we
cover up to three filings, Idon't know if someone from the
(48:00):
Avalara returns would like formanaged services would like to,
or MRA would like to addressthat more deeply on their side.
Kris Pupilli (48:07):
So I think where we see Davo as a great play is
if you have a physical location,like a restaurant or a retail
shop.
You have the POS platforms.
That's where we see Davo as afantastic fit.
(48:30):
And Christine, feel free to jumpin if I'm misspeaking.
But that's typically you have aphysical location and that's
about the extent of.
Your business.
Is that fair?
Cristine Vickery (48:43):
It really depends.
If they are if everything istracked, for example, if we were
to use Lightspeed as an example,if someone is doing some e
commerce and it's actuallyproperly represented with the
correct tax category anddescription.
And that then Davo has noproblem doing that.
They just have to set up theirtax profiles.
(49:05):
However, traditionally I wouldagree with you, Chris.
I think it's really point ofsales, a lot of them are not
doing e comm still like Squaredoesn't have a lot of e comm.
They integrate with other ecomm.
So I would say bar far and wide,Avalara is really core
competence and fantastic attaking care of your e commerce
(49:25):
customers for sure.
Kris Pupilli (49:26):
Could
Beth Raymond (49:28):
I just add that I would especially for the
clientele perspective that Davois definitely if we're able to
work with your clients that needthe cash management aspect of
our service.
And coming from a lot of smallbusinesses, coming up with the
(49:51):
funds to pay just on a monthlybasis can be hard because as
Christine mentioned at thebeginning that's just in a lot
of people's same bank accountand they're using it as capital
towards buying the brokenrefrigerator that they need to
replace.
So the fact that Davo is able toset those funds aside daily and
(50:13):
then pay from.
Our bank account so that isreally the headache that's gone.
So, I would say cash managementis, really the top, the daily
cash management for thoseclients that need it.
Those merchants that definitelyspend the sales tax before it's
due.
Cristine Vickery (50:32):
Which definitely segues into, you've
got high, you tend to be alocalized business and you've
got a high number oftransactions.
They might be low in value, butif you've got a lot of
transactions, people don'trealize how much sales tax they
start to collect.
That's a great point, Beth.
Thank you.
Matthew Fulton (50:50):
Yeah, I used, Ted, I used car dealership.
I was doing all their sales taxform, and it was the biggest
pain in the rear.
Their monthly sales tax was 30,000 a month.
And you'd have to report todifferent states at different
times because of where theperson actually lived.
So what I, believe I'm hearing,if I was to summarize, This
whole scenario if you start offwith QuickBooks online and their
(51:13):
sales tax set up onto it, aslong as you've got everything
set up appropriately withinthere, the product services,
everything else, which isfundamental to be able to use a
Davo anyways, right?
You need all that stuff set up,their thing can give you the
numbers, but they're not doingany of the filing for you.
You're taking that and you stillhave to go and do all the
filing.
You have to actually registerfor different nexus for
different places, everythingelse.
(51:34):
where Davo becomes an automatedadvanced improved version of
this.
You can use, especially withpoint of sale systems.
So it's tracking everythingstill reporting back to QBO.
So your books are correct, butthanks to Davo, you're going to,
Davo is going to do the filingof the different places that
needs to be done.
And then Avalara, as you step upabove become the more
(51:55):
complicated sales taxrequirements where maybe you
have different sales channels,You need to be able to combine
things in all uniquely orthere's unique scenarios.
Like I said about the preciousmetals or different things of
that nature, you can fullycustomize it, make it extremely
unique and still get thereporting back into QuickBooks,
but get the full calculationfrom the different places all
(52:17):
into one.
Is that kind of the tieredapproach in a sense?
Kris Pupilli (52:23):
I think that's fair.
I think that, yeah, I think soAvalara typically comes in if
you're not selling POS.
So if you have additionalchannels outside of a point of
sale system, so e commerce isbig, software, trying to think
medical devices comes up,dietary supplements, health
(52:48):
supplements, things like thatare pretty complex state by
state, right?
Those things.
Can
Dan DeLong (52:55):
you speak a little bit, Chris, about the
differences between QBO salestax and in Avitax?
On how, a little bit moregranular Avitax might be helpful
in the, The, calculation aspectof that.
Kris Pupilli (53:15):
Yeah.
Yeah.
And I try to touch on it alittle bit earlier.
One of the big things is goingto be that that initial.
So we do that latitude andlongitude assignment.
So we have that addressvalidation.
We're going to actually look atthe exact pinpoint on the map
because there's going to be someinstances where you can have 789
(53:36):
different tax jurisdictions.
That you're tracking for asingle location on a map.
And that's just not possiblethrough zip codes.
The other piece is going to bearound the tax codes and product
taxability.
So if you're selling anythingother than just stuff.
(53:59):
I try like they call it tangiblepersonal property in the tax
world.
I use the scientific term ofstuff.
So if you're you're selling morethan just stuff on Amazon it
probably makes sense to, to lookat Avalara.
And then there's, certain statesand we, like to say if you're
selling in more than threestates.
(54:22):
You've created that nexus inmore than three states.
It's probably a good idea tostart to look at automation
because that's when that time tovalue play really comes in.
Dan DeLong (54:35):
That makes sense.
The, I had a question.
Did, anybody Matthew orMichelle, did you see any that,
that What flashed by?
Michelle Long (54:48):
We had a couple of questions from Bill.
The nexus tracking that wetalked about earlier, that is
sales tax only, not income tax.
Is that correct?
Kris Pupilli (54:58):
Correct, Okay, going to
Michelle Long (54:59):
make
Kris Pupilli (55:00):
the various departments inside of the state
do talk to each other though.
Okay.
So if you have triggered incometax nexus in a state and you're
not paying sales tax in thestate, there's a good chance
that you could be getting aletter.
From that state.
Okay.
Okay.
Michelle Long (55:19):
And then another one before what we talked about
if they have the uncollectedsales tax and that you're
negotiating 3 or 4 years versus7 years are the voluntary
disclosures done through a legalteam.
So those conversations areprotected pre finalization.
Kris Pupilli (55:38):
They are.
Yep.
Yep.
So we don't even, and we won'teven disclose the business name
or identifiable informationuntil that's all been
determined.
And it all hinges on just aslong as the state hasn't reached
out once the name has beendisclosed.
But yeah, we do.
I think last year we did over2000 voluntary disclosure
(55:59):
agreements.
Throughout the various states,and that number just continues
to rise.
Michelle Long (56:04):
And one more question that's pertinent to us
accounting professionals.
In some states, if I remembercorrectly, Ohio might have been
one.
If we bundle our services alongwith apps let's say we've got
Davo and QBO, and we're bundlingthese apps so that our services
(56:25):
are 2, 000 a month, whichincludes the apps.
So if we bundle our services andapps together, that could
trigger sales taxes on ourservices as well in some states,
but not in all states.
Is that true?
And is that something, is therea chart or anything anywhere or
(56:45):
resource anywhere where we canfind out so we don't get
ourselves in trouble as we nowwork with people in multiple
states?
Kris Pupilli (56:53):
So that is a fantastic question and Michelle,
I'd love to have an opportunityto walk through.
This a little bit more, but wedo have what we call it.
It's Avalara tax research, andthis is our tax research tool.
And one of the things that welook at is within this tool, we
(57:14):
have taxes of doing business,application of tax, all these
different categories.
And then we also are able tofind, specific tax laws.
And I, I don't I'm not going tojump into it cause I just don't
have enough time, but we do havethat.
And then to answer your questionin a shorthand, the answer is
(57:36):
yes.
The, if you're selling bundledproducts or services, if some
part of that is taxable, thestate will tax the whole thing
in certain states.
Okay.
Michelle Long (57:48):
Cause yeah, I thought in Ohio you had to
invoice separately, yourservices on one invoice and the
apps on another invoice.
Okay.
To make sure you didn't do that.
So be careful out there, people.
Kris Pupilli (58:03):
And then also know for the accounting professionals
on the calls, we do have thoseservices specific for accounting
professionals as well.
Dan DeLong (58:13):
Yeah, cause it, it definitely could.
I know that's, a common answeror question I'll just avoid
sales tax altogether by, by justdoing a bundle.
That's not always the.
Easiest answer becauseeventually they tend to find
these things out.
Like Chris alluded to they dogovernment agencies do talk to
(58:36):
each other, especially when onegets triggered.
And another one is just sittingthere twiddling their thumbs,
waiting for you to file areturn, whatever that might be.
Michelle Long (58:49):
The states are looking for more and more money
and sometimes sales taxes is agood area for them to go collect
money and stuff too.
Dan DeLong (58:58):
Yeah, there's a great story, there's a great
story with David Joseph abouthow he discovered that he was
do, some taxes by an auditorjust sitting there counting
customers going in and out ofhis restaurant, right?
That, that is that's that's, notthe kind of conversation that
you want to have with me.
(59:21):
In, that regard.
So I did ask the last question,would you like to learn more
about Avalara?
Because as we have determined,it's more than time than one
hour is gonna allot for us Youcan reach out and talk to them
about their, suite of services.
We appreciate everyone from theAvalara team joining us here
(59:41):
today, even Jamie as her voice.
Beth Raymond (59:49):
I got very excited about WriteWorks and QuickBooks
Enterprise.
Dan DeLong (59:54):
That's okay.
So we appreciate all the orangefolks joining us today.
And we will see you next time onthe QB Power Hour.
And the CPE for today will befollowing up by the end of the
week.
If you answer all the pollquestions.
So we appreciate you joining ustoday.
And we'll see you next time onthe QB Power Hour.
Hi, Michelle.
How are you?
Michelle Long (00:32):
Hey, Dan.
I'm great.
How are you doing?
Hope you had a goodThanksgiving.
Dan DeLong (00:37):
Yes.
We hope everybody did have agreat Thanksgiving.
Matthew, always good to see youas well.
Matthew Fulton (00:44):
Hello, everybody.
Thanks for having me back on.
I'm excited to talk about salestax.
I
Dan DeLong (00:49):
don't believe you.
Based on your conversation ofwhat you said the last time
about how you don't like salestax.
I don't think you're beingtruthful.
we have a star studded panel of,of folks from Avalara joining us
(01:11):
here today.
And, if we could have those thatare presenting from Avalara
joining come off, put their, putthe camera on, we do have some
others that are just helpingwith the, the Q& A and such, but
our topic today is Like wetalked last time about the sales
(01:35):
setting up sales tax inside ofQuickBooks online with Alicia
did a great presentation.
He has a great course on herwebsite about, setting up sales
tax inside of QuickBooks online.
But as she mentioned at the endof that, there was there, it's.
It's the shallow end of the poolwhen it comes to some more
(01:56):
complicated setup of sales tech.
So we wanted to have the, ourfriends at Avalar joining us
here today, to talk about someof those situations when.
You're butting up against thetop of what QuickBooks Online
will do with regards to salestax calculation and set up.
(02:20):
So we wanted to have them comeon and talk about some of those
things that, that they can, helpwith.
Now, Matthew, last time youtalked about, The fact that you
don't care for sales tax at alland and so I wanted to start the
and kind of frame theconversation about As an
(02:42):
accounting professional, whenyou have those engagements with
your clients, and there arethings that you don't like to
do, because I know Michellehates payroll and taxes, right?
Like how do you frame that andset that expectation up with
with your clients so thatEspecially it's a core
functionality of a business ofhow to do things in sales tax is
(03:05):
such a core functionality.
How do you keep that separate?
Matthew Fulton (03:10):
It's a really difficult thing to try to get
out of is the best way I can sayit.
So usually when we're like firstmeeting with a client, we're
trying to figure out whatservices they need and if
they're going to have morecomplex sales tax, it's
something we let them know rightaway.
That we have referral partnersthat we would involve or bring
in that they would help handlethe sales tax.
(03:31):
When you start getting stuff,that's really, complicated and
they're adding differentproducts and services all the
time, it just becomes so muchextra work.
And we explained to him, it'snot a part of the normal
pricing.
So it's an add on is how wehandle it.
I have not been successful atreally getting away from doing
sales tax.
We just try to find the best wayto make it as easy as possible.
Dan DeLong (03:57):
Michael Corleone in Godfather, right?
They keep pulling you back in.
Matthew Fulton (04:02):
Pretty
Michelle Long (04:02):
much, yeah.
One of
Dan DeLong (04:03):
those things.
Michelle what do you suggest?
Michelle Long (04:07):
I was going to say one of the things about
sales taxes is you don't knowwhat you don't know.
And that's why I love Avalaraand AviTax is because they made
me realize like I always thoughta Hershey bar is a Hershey bar
is a Hershey bar until theyeducated me that a Hershey bar
with almonds is food and it'staxed one way and a Hershey bar
(04:27):
without almonds is taxed adifferent way.
I had no idea.
Same thing with things likeToothpaste.
Does it have fluoride or does itnot have fluoride?
They're taxed different.
Who knew?
And that's where I realized, Ohmy God you can have three houses
together and the middle house istaxed differently than the
houses next door to them.
(04:48):
I had no idea.
And that's where With havingAvalara be on previously, and
that's why when I saw them atthe conference, I think it was
last year at Scaling New Heightsor something, I said we need to
have you all back on againbecause this is an area of so
much vulnerability.
Because if you get it wrong, thepenalties and interest can cost
(05:09):
a lot.
And again, there's so much thatyou don't know, and it's gotten
more complex than ever with theeconomic nexus and everything.
And this is an area I think weneed help in because a lot of
us.
Don't specialize in sales tax.
And it's easy with everybodydoing online sales now to get
yourself in trouble.
And so I'm very glad to have himback on today to help us learn
(05:31):
more about what we don't know.
And I like to just outsourcethis stuff to somebody smarter
than me, because I don't want toknow it because I don't like
taxes.
So I would rather just havesomebody else be responsible
because there's too many detailsand too much stuff.
Absolutely.
Dan DeLong (05:49):
So I want to let's go around the horn here and and
introduce the panel fromAvalara.
So I'm going to go from my rightto left or left to right or
bottom.
I don't know who the Brady bunchzoom session that we have here.
But Chris, if you want tointroduce yourself and say where
(06:10):
your, what your specialty isover at Avalara.
Kris Pupilli (06:14):
Yeah, absolutely.
And we did so funny enough, Danand Michelle, we did a trivia at
our booth and Michelle, I thinkyou would have won the sales tax
trivia with that intro there.
That was fan, the candy bars andthe toothpaste and everything.
But my, name's Christopher.
(06:34):
I.
I've been with Avalara since2014.
In Care2Venture, I've probablyforgotten more about sales tax
than I ever thought I wouldknow.
And my specialty is Dan,Michelle, Matthew, the, you
folks on the call today, I leada QuickBooks team, that we sell
(06:58):
almost exclusively to companiesusing QuickBooks.
Hopefully that is, that willsuffice, Dan.
Dan DeLong (07:06):
Yes, it will.
It will.
And Chris, Christina.
Cristine Vickery (07:10):
Hi, everyone.
I am a strategic partner managerat Avalara, focusing on our
point of sale partners mostly,but I came from the Davo side of
Avalara, Davo by Avalara, andI've been with Avalara since
January 2022.
Almost three years.
And I actually was a franchiseowner myself for 12 years.
(07:33):
And I can't express to you howmuch I wish Davo existed for my
business back then.
I hated filing sales tax.
And I remember a couple of timeschoosing to pay it late so that
I could leverage those sales taxdollars for my own.
And that is definitely a badhabit for business owners.
So I'm very passionate.
About Avitax, Avalara, and Davoby Avalara.
(07:57):
And thank you for letting me behere today.
Awesome.
Dan DeLong (08:01):
And Beth?
Beth Raymond (08:03):
Hi, everyone.
Nice to meet you.
My name is Beth, and I am withDavo by Avalara one of the
products.
And I handle all of thecompliance for Davo merchants.
Davo does integrate with,QuickBooks Online as a, for
(08:24):
people using it as a POS system.
So we have a direct integration.
And then I also have beenhelping out lately with all the
other inbound customer, supportand merchant facing areas for
Dabo.
Dan DeLong (08:41):
And before we get to Heather here, I'm going to
launch the 1st poll because yes,there is CPE for this for this
session.
Our friends at MakerTub are arehelping out with that.
So we want to be able to, Provethat you were here and the poll
questions are a way that the waythat you can do that.
So Heather late entry into theinto the Brady Bunch here.
(09:05):
What what do you do over atAvalara?
Heather Lopez (09:08):
Hi so nice to see everyone and thank you guys for
attending.
My name's Heather Lopez.
I'm out of Seattle and I'm withAvalara and I actually am on the
Avalara for Accountants channel.
So my role here is to support onhow and.
Manage how we work with ouraccounting partners.
I've been with Avalara for fouryears now.
I actually first started in ourstrategic initiatives group.
(09:29):
So I was more focused onexercise side of things.
And so we recently launched theAvalara for accounts channel,
which I transitioned to a littleover 2 years ago to help launch
this channel.
And as we grow our relationshipswith our partners.
Dan DeLong (09:44):
Excellent.
Thank you.
Thank you all for, joining us.
So we'll, as you have, as youmight have guessed we're gonna
try to keep this conversationalas, opposed to being
presentational as we have donein the past because there's just
so much to, know and to talkabout with regards to the sales
tax in general.
(10:06):
So we're, gonna dovetail off ofour last our last webinar where
Alicia talked about the, settingup a QuickBooks online sales
pack, and then where you'repushing the envelope of, things
that you might want to do.
And I think David over at DavoDavid Joseph, who graded Davo
(10:31):
said it best, I think when hewas on a prior webinars with us
that there's no value.
To doing sales tax to a businessowner, right?
It's, a compliance thing.
It, there is they have to do it.
But there, there really is novalue.
(10:51):
And I'm always remember my myexperience with the Arizona
department of revenue.
Not that I had a directedintegration with them, but I had
a friend who worked at theArizona department of revenue
and they managed the collectionof sales tax as well as the
income tax in in local Tucsonoffice.
(11:15):
And it was like clockwork wherethey would always have someone
come in and say, I can't affordto pay sales tax.
And then, of course, theirquestion to them is, what are
you doing spending the state'smoney?
And that, that kind of leadsinto this whole thing about how
(11:36):
business owners perceive salestax as it.
From an accounting perspective,everybody probably on the call
is of course you're you don't dothat, but they're looking at the
money in the bank, and spendingbased off of what's in the bank
and not realizing that some ofthat is to be earmarked or
(11:59):
separated or segregated from Theregular cash flow activities
that they are normally doingthey can certainly get in, get
themselves into trouble withpayroll liabilities as well.
But sales tax in an accountingbeat is a liability that they'll
have to pay, there'll be holdingthat for on behalf of the state.
(12:23):
And so 15, I wanted to ask youhow that kind of, how that's
solved by something like Davobecause of how it, actually
works between, saving, thecompany from themselves, with,
(12:44):
regards to sales tax.
Cristine Vickery (12:46):
Sure, absolutely.
Let's face it.
Managing sales tax is doing ajob for free for the state.
You don't get paid to do it.
It's basically you're riskaverse.
I'm going to go ahead and sharea screen, not to be over
presentation like, but just sowe have the visual learners as
well as the auditory learnerscovered.
But when you think about it, caneveryone see my screen okay?
(13:08):
Okay, beautiful.
I think we all know the problemis that the sales tax dollars
mingle, they co mingle with thebusiness working capital.
And because they're mingled,it's, it's, it, people, they can
spend it, it can, payroll cancome up on the same day that
your sales tax is due and, Davohelps this by moving the cash
(13:29):
dollars out daily.
And because if you don't do thatand you miss it, you're looking
at anywhere between 20 and 30percent in penalties and late
fees for your customers.
And that's good.
That's awful.
So what Delva will do is it'llgo into QuickBooks and it will
pull down the previous day'ssales and sales tax
transactions.
Now, there is a stipulation inQuickBooks that you have to be
(13:52):
using it for your invoices andyou have to have the status of
paid for the invoice and paymentstatus has to be closed.
Otherwise, Davo will not see ityet, but we'll go in and look at
QuickBooks from the previousday, pull down those sales tax
dollars and take them out sothey're not commingling.
And then Davo has the the salestax dollars to go ahead and file
(14:14):
and pay on time guaranteed.
And we do look for the propersales tax ability to be correct
in QuickBooks, of course.
And this is really great for 54.
99 per month.
I will tell you that.
Effective February 1st, thatprice will be moving to 57.
99 or 58 almost, and it givesyou a lot.
(14:37):
You get support for all of that,but also to keep in mind there
for when you file and pay ontime, you do get a rebate and
over more than half the statesin the U.
S.
And this is important because itcan make Davo either free or
substantially discounted.
And so those, are really the,the main nuggets really is why
(15:03):
spend A, your time on it, Bit's, you're doing a free job
for the state.
And just like Dan said, it's notgoing to give you more
inventory.
It's not going to give you moreemployees.
And it's really there's no valueto you except for not wanting to
pay late fees.
I'll stop sharing just so we cankeep this conversational.
Dan DeLong (15:22):
And what, they, what I really liked about cause when
we had Alicia on last time aboutif you set up, QuickBooks online
with regards to collecting thesales tax properly, This is the,
this is a great add on oraddition to it because that's
(15:43):
really where Navo excels, right?
It's.
If you're setting it upproperly, then, Davo will,
intercede by impounding the,liability so that it doesn't
show on their, money that'savailable to to spend.
(16:05):
And then, everything thathappens after the sales tax
collection is then automated,right?
Is that, right?
Really a nutshell of what Davo,how Davo works
Cristine Vickery (16:16):
in this.
It is, it's mostly automated,but we do have Beth could attest
to, we do have professionalfilers on staff and that's
another reason why yourcustomers can feel great relief
and trust and giving that.
That task to Davo, because youcan know that it's going to be
done properly and that weunderstand it as well as on
(16:40):
time.
So it's really, yes, we do agreat job of moving the sales
tax dollars out.
So we don't get you in troubleand keep you out of that risk.
And you have a truer sense ofthe value and profitability of
your business.
And it's certainly at leastlooking at your checking account
to that extent, but also it'sgoing to be done right.
Yes,
Matthew Fulton (16:59):
real quick.
There's a question inside thechat, which we just want to draw
attention to.
They were asking the pricingthat showed was the 55 per
location.
Just for a bit of clarification.
I believe that's discussingeither per state is what you're
that you have to do filing.
And is that correct?
Or what do you mean?
Cristine Vickery (17:17):
That is per location.
So if you have four restaurants,for example, or for retail
locations, then it is perlocation per month.
And that covers up to threefilings.
And it's funny too, when youtalk about sales tax, a lot of
business owners don't realizethat if they leave their
business and they owe sales tax,that it follows them personally.
(17:41):
So it's a really good tidbittoo, to help them.
Keep that risk away from, theirfinancial livelihood.
Michelle Long (17:49):
So I just wanted to clarify we talk about if it's
set up properly and stuff.
So do you all do that?
And we talked about the Hersheybar and the toothpaste how is
that something that you all makesure it is set up properly?
Cristine Vickery (18:05):
Davo does not do that.
We are a service that we trust.
It's correct in QuickBooks.
So how do
Michelle Long (18:11):
we get, how do we as the accounting professional
get help with that?
Don't you all have a servicethat helps us with that as well?
Cristine Vickery (18:17):
That's going to be the Avalara side, I
believe not the Davo is the sortof, you have all of the merchant
journey that they go through.
And part of that journey isSetting up their business
properly with the proper taxcodes and categories, right?
And Davo comes later.
So the Davo that we're justtalking about now, that's really
that, Hey, let's finish thatlast step.
So you don't have to ever belate and know that it's done
(18:40):
right based on what we'reseeing.
So that would be before thatjourney.
Okay.
Yeah.
Dan DeLong (18:46):
Would that be more of a Heather question or a Chris
question?
Cristine Vickery (18:52):
That is a great question.
Dan DeLong (18:54):
Pick
Kris Pupilli (18:55):
your poison, right?
I can start and then Heather cancertainly add some color.
Yeah, so as far as, That initialsetup goes we do have
implementation specialists andwe do have customer support and
I can actually, I have a fewscreens pulled up.
(19:17):
I think this was Particularlydiscussing tax codes.
Is that fair?
Dan DeLong (19:25):
Yeah.
What do I, how do I know thatI've set up my, my my sales tax
correctly in, inside of quick,because as we talked about last
time, it, lists all of thecategories, but how do I know
I'm choosing the right one?
And, I think you guys have apretty good resource to help
with that.
(19:45):
Of course, it's.
focused on setting this upinside of Avalara or AvaTax as
your flagship tax calculationproduct, but it would still be
available or they would be ableto help help determine what
these sales tax categories orclassifications are.
Kris Pupilli (20:03):
Yeah, absolutely.
I guess we could take this acouple different ways.
The first, you is, this is apublicly facing resource here
and it's our Avalara tax codes.
And so we just, we have, I'lljust type in shipping because
(20:23):
any company that sells productsthey're going to have to ship
and we have differentdefinitions.
Of the types of shipping so youcan come in you find the one
that most closely relates toyour business typically this fr
is what's most frequently usedand then You'll associate that
(20:47):
with the shipping line item andi'm gonna what i'm gonna do here
is i'll just for fun We'll builda tax matrix just so you can see
Normally, you
Dan DeLong (20:58):
don't say fun and sales tax in the same sentence,
but
Kris Pupilli (21:02):
Yeah I'm really doing this for Michelle.
So next time she sees this, shecan brag about Hey, how is
shipping taxed differently?
So we have all the US armedforces, but you'll see that
shipping is taxed verydifferently.
across the country.
Most of it, it's going to betaxable, but then there's also a
(21:23):
number of states where it's taxexempt.
And this is to Michelle's pointabout fluoride and almonds and
all that, it's almostimpossible.
To keep up with all of this,right?
Like how would, one businessknow, Hey I'm selling to
Michigan and Minnesota, theMinnesota stuff, the shipping is
(21:43):
going to be taxable.
The Michigan stuff, the shippingis going to be tax exempt.
Matthew Fulton (21:50):
I'm quickly remembering my.
pain points from the last one.
This becomes somewhatchallenging with this example
and keeping us on topic of thequestion.
In the past, I worked with aprecious metals company and we
helped them actually set upAvalare for a full website, like
API wise.
And during the process, Ilearned if you sell more than 1,
(22:13):
500 worth of precious metals atone time, They're non taxable.
If it's less than 1500, it istaxable.
So in that kind of scenario,this, I think this is where
trying to determine whether it'sa DAVO or an AvaTax, as your
liability increases for thatstuff, it makes more sense to be
stepping up to the higherplatform where you can really
(22:34):
map each individual item andhave those special rules.
Is that fair to say?
Kris Pupilli (22:40):
Yeah, absolutely.
And I think a more.
Precious metals, it's a, it's anindustry we run into.
But I think something that mightbe a little more applicable
would be clothing and apparelbecause there's a couple of
states that have taxabilitythresholds for clothing and
apparel, and they're rightaround the a hundred dollar
mark.
(23:00):
So if you're selling into thestate of New York and you're
over 110, that clothing andapparel is going to be taxable.
If somehow you're findingclothes from New York that are
less than 110, you're going toget those tax exempt.
So
Dan DeLong (23:22):
Heather or Chris, if, I think one of the, one of
the aha moments that I had when,orbiting the booth around at
some of the conferences and notnecessarily wanting to, or do I
want to step into this, wholenature of, sales tax, could you
(23:48):
that the set the stage, becauseone of the, one of the webinars
that, that we had you guys onwas where you just laid out the
framework of the suite ofservices that that you guys
offer, because I think a lot of.
Folks in the accountingcommunity are timid to to, to
cross into that threshold ofokay, what am I getting myself
(24:11):
into by interfacing with Avalar,but there are pick and choose
your own adventure types of waysto, work with.
And we just talked about thatwith Christine about you could
just do Davo, and that if I'mcomfortable setting it up
properly and I have thatconfidence that I have done
(24:31):
that, Oh I can just.
Add on this Davo add on to theQuickBooks Online to pretty much
do the crockpot method of salestax, where I put all my
ingredients in and theneverything else is then handled
for me.
What other let's talk about thatabout what other sweets and
(24:52):
services or services that youguys offer?
Because I saw in the chat do youguys offer?
Sales tax certificates andthings like that.
Heather Lopez (25:03):
Yeah, great.
Great point, Dan.
There we go.
This is it.
We can, so what's nice is thatthere's so many different ways
that you can work with Avalara.
And we've been around for solong 20 years now and every
anytime someone sees orange,they usually associate Avalara.
(25:23):
And so we try to make sales tax.
Fun as possible.
And what's nice is that weactually created an entire
channel.
Dedicated for our accountingpartners 4 years ago, so still
relatively new.
And to avalare and how we workwith accounting partners.
There's actually 3 differentways.
And Chris, if we could go aheadand look at that slide.
(25:46):
How we 3 different ways we canwork with our accounting
partners.
If we can.
I think it's the 1 or 2 beforethis.
Oh, I'm so I'm a visual person.
So it's just easier for us.
Everyone to see, how we workwith our partners here.
(26:10):
And so traditionally, oh, goahead, Matthew.
Matthew Fulton (26:13):
I was just gonna say, as he was pulling it up
there, there was a question andlet's say it a little bit.
I'm going to throw you off a bitof maybe at some point touching
base on if you're using a stripeor square for certain things.
If you have different channelsin different ways, tax has to be
collected and then reported howthat comes into play with this
as well.
Heather Lopez (26:33):
We, can definitely get into that here.
Let's bring it up here.
But it's a great point.
So here is the different waysthat we work with our accounting
partners.
Traditionally, how we've alwaysworked with our accounting
partners and how we still do isthrough this first motion here,
which is our referral motion.
And so if your client has a needmaybe they need to collect
(26:54):
exemption certificate managementor automate that process.
Maybe they have an issue withthey're doing some kind of
communication or excise tax somesort.
You can refer that over toAvalara and either you can, we
actually redid this entireprogram this year and which is,
an awesome about this program istraditionally if you refer
(27:16):
something over to us it's agreat way to add a revenue
stream to your firm.
You can earn commissions onanything you refer over to us or
you can pass on automaticdiscounts.
Within that referral program,there's.
Marketing materials if you wantto work closer with us, there's
different levels and way you canwork with us.
(27:37):
The more we work together, thinkof it as an airline program.
The more you fly, the morepoints you get, the more you
work together with us.
And as helping your clients thehigher incentives you can earn.
So there's, an entire packagewith our partner program and
it's totally free to join.
So if your clients have somekind of sales tax or if they're
(27:58):
selling online, or if they'reselling or however they're
transacting, they're most likelygonna come up with sales tax.
That's a great way to work withus in our partner program, and
it's free to join.
Now, the next motion here isthis implement motion, and so
you can actually becomecertified to implement Avalara
solutions for your clients.
Now, if your end client, they,honestly, it's.
(28:21):
Sales taxes can be verydifficult.
To navigate.
And so that's also another areaor another opportunity for you
to make additional revenue atyour client.
Instead of Avalara doing theonboarding, that'd be an
opportunity for you to do theonboarding for your client.
So you can become certified todo that.
(28:42):
I think that was maybe one ofthe questions here.
And then the last motion here isthe tools motion.
So what tools can Avalareprovide you as an accounting
partner to maybe do some ofthese functions?
Maybe, you're not a sales taxexpert, but your clients come to
you often asking to help withreturns, maybe.
(29:03):
And so we've we also have builta tool.
It's actually the same tool thatwe use internally to file
returns on behalf of ourclients.
We file over 7 million a year.
We actually are the largestsales and use tax filer in the
U.
S.
Same tool that we use to fileour returns.
We put a user interface on itspecifically for our accounting
partners.
(29:23):
That way you can file returnsfor your clients by leveraging
Avalara's team.
Dan DeLong (29:30):
So it's not it's not just one size fits all when it
comes to how, you can come workwith Avalar.
And I see a lot of questionscoming in does it work with
Stripe or does it work withthis?
That's, another option.
But when it comes to QuickBooksonline, Chris, I think maybe you
(29:52):
would be the best person toanswer this about what is Ava
tax?
And how does that differ fromAvalara in general?
Kris Pupilli (30:02):
Yeah, that's a fantastic question.
So what Avitax is, that's ourflagship product.
So that is our sales taxcalculation engine.
With that, we're able to do acouple of really cool things.
The first part is we validateyour address.
(30:23):
So when that comes through we'regoing to do an address
validation.
That helps with bad shippingcharges or anything like that.
I don't know if anyone's everran into those.
But I did work for a TMS companyand part of our discovery was,
hey, do you use Avalara?
Because they wanted to know ifyour shipping address was going
to be correct.
(30:44):
So that's one piece.
Then what we do is we actuallydrill down Into the latitude and
longitude.
So when Michelle was saying nextdoor neighbors having different
tax rates it's a true thing.
Shopping malls can potentiallywe have a couple of examples of
shopping malls that havedifferent tax rates.
So we drill into that.
(31:06):
So we find the correctjurisdictions and then we find
what those tax rates are.
And we look for any specialsourcing rules.
Some states are origin, somestates are destination, some
states are a hybrid.
And then we make that taxdetermination and pack it, pass
it back to your business system.
(31:27):
And yeah, go ahead.
Dan DeLong (31:30):
now when like when, things get complicated which is,
a great use case for Avalara.
When they're selling online andthey're using Stripe or Square
or some other kind of point ofsale system and QuickBooks is
somewhat involved, in the, wholesituation, I think it's
(31:55):
important to understand What Iwill have a tax would interface
with, or can it interface withall of them and just be that
single source of truth for forsales tax.
But like the example of, Hey,I'm doing some sales inside of
QuickBooks online.
And I'm also, I also have an ecommerce channel.
(32:17):
That, I might need to, collectsales tax on, but that data is
not coming into QuickBooks in a,format that will.
Cool.
Utilize the sales tax engineinside of QuickBooks where would
that best be?
How would that work with thattype of situation?
Kris Pupilli (32:37):
Yeah.
So Dan that's a really coolquestion.
just because of the way thatAvalara was built, we were built
on these partnerships and wehave over 1, 400 different
business systems that trustAvalara to integrate into and be
part of their system.
So when you have, and I'm justthinking, I'm just using this as
(32:58):
an example, partially becauseyou and partially because of
Susan in the chat.
So you have a company that'susing a Shopify or that's using
a QuoteWorks or a Jobber, andyou have QuickBooks on the back
end.
Avalara has the ability tointegrate into all of these
platforms.
Kind of like a wheel withspokes.
(33:19):
So Avalara is going to be thatcentralized point of truth.
And then we have these pre builtintegrations into all these
different platforms so that youhave your centralized point of
tax truth.
And then we can ping out andsend those tax determinations
into whatever business systemyou need.
Dan DeLong (33:40):
And then if you don't have, if you don't want to
integrate them directly, You canjust, you can also just import
those transactions into, Avitaxto make sure that it's,
calculated properly, right?
Kris Pupilli (33:52):
Absolutely.
Absolutely.
Michelle Long (33:55):
while we're talking about these complex kind
of things or whatever, we didhave somebody that asked can we
connect Avitax for a companythat invoices in QBE inside
RightWorks?
So in a host enterprise,
Heather Lopez (34:10):
absolutely.
Yes.
Kris Pupilli (34:13):
Okay, so I think I heard your question.
And I don't know what happened.
I keep getting kicked.
Keep getting booted out of here.
Yeah, so if you're so we, wehave a great partnership with
right works.
They're one of our, one of ourlarger QuickBooks partners and
(34:35):
we have an integration forQuickBooks Enterprise.
So we have that configurationis, no, that configuration is
quite common for us.
Dan DeLong (34:49):
So the so the, in just in general, like how does
Avitax interface with theseintegrations?
Does it sit in between the salesand the collection of the sales
tax?
And then what does it do as faras If you were to use this with
with QBO to make sure say, youdon't, say you don't trust
(35:13):
QuickBooks online.
I don't know why you would dothat.
It always worked.
But if you have some of thesecomplicated setup and you are
integrating with Avitac with,QuickBooks online, how does that
work?
How does it, is it a, I hate touse the word seamless
integration, but that is theterm that people will use, how
(35:37):
does it, how does that work whenyou're integrating with some of
these with something that is thesales and then calculating the
sales tax.
Kris Pupilli (35:45):
Yeah, I'll do my best to not use that word, Dan.
But we are, so we, areintegrated in a way that looks
and acts just standardfunctionality.
So go ahead, Matt.
I saw you come off mute.
Matthew Fulton (36:06):
I think the key to this right workflow wise
would be You want your avatarsyour avalara program to
integrate directly to whateverthird party application that's
going to be responsible forcreating the invoicing And this
figuring out the sales taxthere, that way, whatever it's
going to calculate appropriatelythere, and then their sink of
(36:28):
that third party app, which goesto QuickBooks online would be
pushing into QBO the correctamount, the invoice with the
proper sales tax amount, becausethe Avalara product would be
handling that calculation.
Based on whatever third partyapp that you're doing it with.
And then if it also wouldconnect to QuickBooks online, if
you do your sales from there forthose ones to then combine
(36:49):
everything together to give yousingle reporting with totals for
everything.
Kris Pupilli (36:55):
Yeah.
Yeah, you seem like you've donethis before.
Matthew Fulton (37:00):
A couple times.
Dan DeLong (37:03):
So I launched the second poll question because I
realized we're just chattingaway and we're not taking the
poll questions and those thatneed CPE we need to do that.
Prior to this webinar, this isthe question.
What.
What did you think Appalaraspecialized in, which the, this
is a multi choice questionbecause as we're discovering
(37:26):
Appalara does more than thanwhat we had thought, like even
the 1099 processing is is,something that that you guys can
handle.
Is that more of a question forHeather or, Chris or both?
Kris Pupilli (37:41):
I'd say that's more of a, that's more of,
Heather is more, much morefamiliar with the 1099 process.
Okay.
So how does that work?
Heather Lopez (37:50):
So we acquired a company called Track 1099.
I think it's about 2 years agonow to now offer a way to
automate and streamline the 1099collection and filing process.
Additionally, we can collect W9sall year round.
And also it's a very easy way togain consent.
For electronic delivery insteadof mail, because I know that's a
(38:12):
huge thing, trying to reducemailing costs as post, I think,
when our postage went up toalmost 90 cents this year.
If you're trying to reduce that,is a great way to handle that.
And so you can either foraccounting partners that are
maybe filing 1099 on behalf oftheir client.
Very easy way to streamline andautomate that process as we can
(38:34):
file all the do all the efiling, state filings, mail and
the W 9s, or if you have aclient that maybe handles it on
their own, they can also sign upwith us directly for account to,
to also streamline and automatethat process, and then 1099
season is coming up.
Before you know it, it'll beJanuary and it's crunch time.
(38:55):
If you haven't already,definitely check us out.
It's still tracked 10 99.
But we now it's gonna berebranded to Avalara 10 99, but
our website is track 10 nine.com
Dan DeLong (39:06):
and there will be orange somewhere included in
that
Heather Lopez (39:09):
Sure.
Yes,
Dan DeLong (39:12):
Lucky.
Guess question, question thatthat popped up there as soon as
you started talking about 10 90,can you do amended.
1099s with with Track 1099.
Heather Lopez (39:23):
So we can do corrected 1099.
It's free to do if, as long asthe 1099 was originally filed in
Track 1099, we can file thecorrection.
So say if you're using adifferent provider before and
started using Track 1099, youwouldn't be able to file the
corrected form if it was doneoutside a different software
before.
It's a great question.
Dan DeLong (39:47):
All right.
so who wants to talk about Nexustracking?
Because you have a really coolthing.
Like we, we talked about it lastweek about.
Inside of QuickBooks Online, youdo have this economic nexus
tracking ability but it's moreof a report and and that sort of
thing.
(40:07):
Can you, are you able todemonstrate what it looks like
and how the economic nexustracking works in Avitax?
Kris Pupilli (40:16):
Dan, I sure hope so, but we'll see every time
I've gotten called on, I gotkicked out.
Okay.
Dan DeLong (40:23):
We'll try to hold on to you here.
Kris Pupilli (40:26):
I, what I'm showing right here, this is the
home screen for an Avalaraaccount.
So the first thing you're goingto see when you log in or at
least I see my eyes go to thismap over here on the right.
And what this is showing is thisis essentially a showing you a
(40:47):
snapshot of where you or yourclient has created economic
nexus.
So when I click into thedetails, you can see.
That we have a number of statesthat are orange.
And if you look over here,you'll see your sales threshold.
So these are the states wherethe thresholds have been met.
(41:08):
It shows your threshold, as wellas what your sales were.
And it lets you know that you'vecrossed, essentially you've
crossed that threshold, and it'stime to get registered.
Dan DeLong (41:21):
And then, that is a service that, that Avalar can
handle as well.
It's okay, I've.
Now that I've crossed thatthreshold, now what?
I can lean into Avalara to beable to set that up.
Properly, right?
Kris Pupilli (41:38):
Yeah.
And yeah, that's and that'sperfect because we have an
ability to do that right herefrom the screen.
It will take you to where youcan buy registrations right here
online or a lot of theaccounting firms that we're
working with, or pro advisorsthat we're working with will do
(41:59):
those registrations.
And then it's very simple.
You'll check the box for the newstate once you're registered.
So it's just a check box of allthe different states.
And then something else, Dan,that Avalara offers is a sales
tax risk assessment.
And this is something that wealways recommend when we're
(42:20):
first talking with businesses,especially businesses that have
been established for a littlewhile.
And there we find out for somereason or another tax wasn't
collected properly.
Hey let's do a risk analysis andtake a look back and see if
you've created a lot ofuncollected liability.
Matthew Fulton (42:41):
So I want to get a little nerdy on one part of
the question.
The calculation of the salestax.
When you have companies that ifyou're buying and you're paying
sales tax on certain products,interior design is what I think
of right off the bat, they'rebuying this stuff.
They've already paid the salestax.
So now within theircalculations, they need to
reduce the amount of sales taxthat they're actually liable
(43:03):
for.
So it starts to be coming,tracking the expenses on the.
I'm sorry.
The tax on the expense side.
Is there a way within avalare tohandle that?
Or is there a form where we canadd that number in to make sure
the tax is correct?
Kris Pupilli (43:20):
Yeah.
Yeah, absolutely.
So it's too I think where you'regoing, Matt, is that sometimes
there is going to be, there'ssales and use.
And yeah that's, absolutelysomething we can do.
We are currently working on anintegration into the AP side of,
(43:40):
for, with Intuit but right nowit is a, it's a manual upload
and what you'll do is you'lljust upload those purchases into
Avalara.
It's an Excel sheet, an Excelfile.
You just throw your purchases inor your or your services.
And then we can take whatevertax you populated, or we can
just calculate that use tax onyour behalf.
Michelle Long (44:05):
So Chris, I had a question for something you said
right before Matt's question.
You said the risk assessment,you can help to determine
something Back liability forbasically they had sales where
they didn't charge sales taxes.
So there's liability where theydidn't collect it, but they may
(44:25):
have that liability if they getcaught or audited or whatever.
Do we as the client recommendthey go back and file amended
and fix it?
Fess up to, Oh, wait, we did itwrong and pay it out of their
own pocket.
Or do you help advise when youdo that risk assessment or when
we come and say, Hey, thisclient has been doing it wrong.
(44:48):
How do you help us to decidewhat's the right course of
action in that?
Do you help in thatdetermination after you do that
risk assessment and stuff?
Kris Pupilli (44:58):
Yeah.
Yeah.
Michelle, I will give you theproper answer.
And then I
Michelle Long (45:06):
will
Kris Pupilli (45:07):
tell you what I tell.
I tell the companies that I workwith.
We always initially the rightthing to do is you should come
clean.
But that's not always going tomake the most sense for the
(45:27):
companies.
So just, for example, we'll justuse this Alaska, example they're
going to have about 284, 000worth of sales that they did not
collect sales tax on, right?
If we take the national, I'mjust going to use round numbers.
(45:48):
So 10 percent sales tax plus25%, penalties and interest.
They're going to somewhere inthe ballpark of 40, 45, 000 in
uncollected tax and penalties.
If they were to get caught,Michelle would 40, if you were
to get caught with 45, 000,would that be a big detriment to
(46:12):
your business?
Oh yeah.
And so that's the conversationsthat we have.
And then we have specialagreements with the various
states where we have we canlimit that liability look back
period so that, hey, maybe youdon't owe tax for the last seven
or eight years.
Maybe you only owe tax for thelast four years or the last
(46:35):
three years.
So we can limit that, historicalliability.
And then we also have anagreement for penalty abatement.
As well.
So we have that 25.
I think Christine said 25 to 30percent penalty.
It's very state by state, but wehave agreements with the state
to help with that penaltyabatement as well.
Dan DeLong (46:58):
Okay.
Great.
Now, I guess the biggest, thingthat I want to make sure that
people understand, especiallywhen it comes to something like
Davo and Avitax, you guys Avitaxor Avalara has its own filing
and remitting service, that'spart of, that's part of Avitax,
(47:20):
and then, There's Davo that hasa file and remitting service
where is the line between thetwo if you're working with
habitats or avalara in thatcapacity.
Do you go with Davo or do you gowith the file and remittance?
I can probably have a text.
Cristine Vickery (47:38):
Yeah, I can probably speak to a little bit
of that demo is meant to becompletely automated.
There is no you get to reviewthe returns and then they're
done there.
We will automatically take careof it.
And if you are looking forreviewing the process and we
cover up to three filings, Idon't know if someone from the
(48:00):
Avalara returns would like formanaged services would like to,
or MRA would like to addressthat more deeply on their side.
Kris Pupilli (48:07):
So I think where we see Davo as a great play is
if you have a physical location,like a restaurant or a retail
shop.
You have the POS platforms.
That's where we see Davo as afantastic fit.
(48:30):
And Christine, feel free to jumpin if I'm misspeaking.
But that's typically you have aphysical location and that's
about the extent of.
Your business.
Is that fair?
Cristine Vickery (48:43):
It really depends.
If they are if everything istracked, for example, if we were
to use Lightspeed as an example,if someone is doing some e
commerce and it's actuallyproperly represented with the
correct tax category anddescription.
And that then Davo has noproblem doing that.
They just have to set up theirtax profiles.
(49:05):
However, traditionally I wouldagree with you, Chris.
I think it's really point ofsales, a lot of them are not
doing e comm still like Squaredoesn't have a lot of e comm.
They integrate with other ecomm.
So I would say bar far and wide,Avalara is really core
competence and fantastic attaking care of your e commerce
(49:25):
customers for sure.
Kris Pupilli (49:26):
Could
Beth Raymond (49:28):
I just add that I would especially for the
clientele perspective that Davois definitely if we're able to
work with your clients that needthe cash management aspect of
our service.
And coming from a lot of smallbusinesses, coming up with the
(49:51):
funds to pay just on a monthlybasis can be hard because as
Christine mentioned at thebeginning that's just in a lot
of people's same bank accountand they're using it as capital
towards buying the brokenrefrigerator that they need to
replace.
So the fact that Davo is able toset those funds aside daily and
(50:13):
then pay from.
Our bank account so that isreally the headache that's gone.
So, I would say cash managementis, really the top, the daily
cash management for thoseclients that need it.
Those merchants that definitelyspend the sales tax before it's
due.
Cristine Vickery (50:32):
Which definitely segues into, you've
got high, you tend to be alocalized business and you've
got a high number oftransactions.
They might be low in value, butif you've got a lot of
transactions, people don'trealize how much sales tax they
start to collect.
That's a great point, Beth.
Thank you.
Matthew Fulton (50:50):
Yeah, I used, Ted, I used car dealership.
I was doing all their sales taxform, and it was the biggest
pain in the rear.
Their monthly sales tax was 30,000 a month.
And you'd have to report todifferent states at different
times because of where theperson actually lived.
So what I, believe I'm hearing,if I was to summarize, This
whole scenario if you start offwith QuickBooks online and their
(51:13):
sales tax set up onto it, aslong as you've got everything
set up appropriately withinthere, the product services,
everything else, which isfundamental to be able to use a
Davo anyways, right?
You need all that stuff set up,their thing can give you the
numbers, but they're not doingany of the filing for you.
You're taking that and you stillhave to go and do all the
filing.
You have to actually registerfor different nexus for
different places, everythingelse.
(51:34):
where Davo becomes an automatedadvanced improved version of
this.
You can use, especially withpoint of sale systems.
So it's tracking everythingstill reporting back to QBO.
So your books are correct, butthanks to Davo, you're going to,
Davo is going to do the filingof the different places that
needs to be done.
And then Avalara, as you step upabove become the more
(51:55):
complicated sales taxrequirements where maybe you
have different sales channels,You need to be able to combine
things in all uniquely orthere's unique scenarios.
Like I said about the preciousmetals or different things of
that nature, you can fullycustomize it, make it extremely
unique and still get thereporting back into QuickBooks,
but get the full calculationfrom the different places all
(52:17):
into one.
Is that kind of the tieredapproach in a sense?
Kris Pupilli (52:23):
I think that's fair.
I think that, yeah, I think soAvalara typically comes in if
you're not selling POS.
So if you have additionalchannels outside of a point of
sale system, so e commerce isbig, software, trying to think
medical devices comes up,dietary supplements, health
(52:48):
supplements, things like thatare pretty complex state by
state, right?
Those things.
Can
Dan DeLong (52:55):
you speak a little bit, Chris, about the
differences between QBO salestax and in Avitax?
On how, a little bit moregranular Avitax might be helpful
in the, The, calculation aspectof that.
Kris Pupilli (53:15):
Yeah.
Yeah.
And I try to touch on it alittle bit earlier.
One of the big things is goingto be that that initial.
So we do that latitude andlongitude assignment.
So we have that addressvalidation.
We're going to actually look atthe exact pinpoint on the map
because there's going to be someinstances where you can have 789
(53:36):
different tax jurisdictions.
That you're tracking for asingle location on a map.
And that's just not possiblethrough zip codes.
The other piece is going to bearound the tax codes and product
taxability.
So if you're selling anythingother than just stuff.
(53:59):
I try like they call it tangiblepersonal property in the tax
world.
I use the scientific term ofstuff.
So if you're you're selling morethan just stuff on Amazon it
probably makes sense to, to lookat Avalara.
And then there's, certain statesand we, like to say if you're
selling in more than threestates.
(54:22):
You've created that nexus inmore than three states.
It's probably a good idea tostart to look at automation
because that's when that time tovalue play really comes in.
Dan DeLong (54:35):
That makes sense.
The, I had a question.
Did, anybody Matthew orMichelle, did you see any that,
that What flashed by?
Michelle Long (54:48):
We had a couple of questions from Bill.
The nexus tracking that wetalked about earlier, that is
sales tax only, not income tax.
Is that correct?
Kris Pupilli (54:58):
Correct, Okay, going to
Michelle Long (54:59):
make
Kris Pupilli (55:00):
the various departments inside of the state
do talk to each other though.
Okay.
So if you have triggered incometax nexus in a state and you're
not paying sales tax in thestate, there's a good chance
that you could be getting aletter.
From that state.
Okay.
Okay.
Michelle Long (55:19):
And then another one before what we talked about
if they have the uncollectedsales tax and that you're
negotiating 3 or 4 years versus7 years are the voluntary
disclosures done through a legalteam.
So those conversations areprotected pre finalization.
Kris Pupilli (55:38):
They are.
Yep.
Yep.
So we don't even, and we won'teven disclose the business name
or identifiable informationuntil that's all been
determined.
And it all hinges on just aslong as the state hasn't reached
out once the name has beendisclosed.
But yeah, we do.
I think last year we did over2000 voluntary disclosure
(55:59):
agreements.
Throughout the various states,and that number just continues
to rise.
Michelle Long (56:04):
And one more question that's pertinent to us
accounting professionals.
In some states, if I remembercorrectly, Ohio might have been
one.
If we bundle our services alongwith apps let's say we've got
Davo and QBO, and we're bundlingthese apps so that our services
(56:25):
are 2, 000 a month, whichincludes the apps.
So if we bundle our services andapps together, that could
trigger sales taxes on ourservices as well in some states,
but not in all states.
Is that true?
And is that something, is therea chart or anything anywhere or
(56:45):
resource anywhere where we canfind out so we don't get
ourselves in trouble as we nowwork with people in multiple
states?
Kris Pupilli (56:53):
So that is a fantastic question and Michelle,
I'd love to have an opportunityto walk through.
This a little bit more, but wedo have what we call it.
It's Avalara tax research, andthis is our tax research tool.
And one of the things that welook at is within this tool, we
(57:14):
have taxes of doing business,application of tax, all these
different categories.
And then we also are able tofind, specific tax laws.
And I, I don't I'm not going tojump into it cause I just don't
have enough time, but we do havethat.
And then to answer your questionin a shorthand, the answer is
(57:36):
yes.
The, if you're selling bundledproducts or services, if some
part of that is taxable, thestate will tax the whole thing
in certain states.
Okay.
Michelle Long (57:48):
Cause yeah, I thought in Ohio you had to
invoice separately, yourservices on one invoice and the
apps on another invoice.
Okay.
To make sure you didn't do that.
So be careful out there, people.
Kris Pupilli (58:03):
And then also know for the accounting professionals
on the calls, we do have thoseservices specific for accounting
professionals as well.
Dan DeLong (58:13):
Yeah, cause it, it definitely could.
I know that's, a common answeror question I'll just avoid
sales tax altogether by, by justdoing a bundle.
That's not always the.
Easiest answer becauseeventually they tend to find
these things out.
Like Chris alluded to they dogovernment agencies do talk to
(58:36):
each other, especially when onegets triggered.
And another one is just sittingthere twiddling their thumbs,
waiting for you to file areturn, whatever that might be.
Michelle Long (58:49):
The states are looking for more and more money
and sometimes sales taxes is agood area for them to go collect
money and stuff too.
Dan DeLong (58:58):
Yeah, there's a great story, there's a great
story with David Joseph abouthow he discovered that he was
do, some taxes by an auditorjust sitting there counting
customers going in and out ofhis restaurant, right?
That, that is that's that's, notthe kind of conversation that
you want to have with me.
(59:21):
In, that regard.
So I did ask the last question,would you like to learn more
about Avalara?
Because as we have determined,it's more than time than one
hour is gonna allot for us Youcan reach out and talk to them
about their, suite of services.
We appreciate everyone from theAvalara team joining us here
(59:41):
today, even Jamie as her voice.
Beth Raymond (59:49):
I got very excited about WriteWorks and QuickBooks
Enterprise.
Dan DeLong (59:54):
That's okay.
So we appreciate all the orangefolks joining us today.
And we will see you next time onthe QB Power Hour.
And the CPE for today will befollowing up by the end of the
week.
If you answer all the pollquestions.
So we appreciate you joining ustoday.
And we'll see you next time onthe QB Power Hour.
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.