Sales Tax–The Newest Playing Field for Acquiring Revenues!

You may have found Amazon affiliates billing sales tax on your purchases or you may be scratching your head at the many screens a vendor must fill in to use the Amazon affiliate program. What has changed? The dynamics of the marketplace has changed. Sales tax and use tax account for more than 30% of statewide gross revenues says one interstate sales tax reporting service. There have been recent landmark test cases, and the states are auditing more aggressively to further develop test legal precedent since the Federal congress folks did not act on proposed standardization of sales tax.

I was taught that Colorado has already hired over 100 sales tax auditors and Wisconsin has budgeted 111 for 2016 sales tax auditing. Most states and localities have a handful of auditors and dream of change. It is lucrative to challenge end user interstate purchasers for use tax and then double collect from the out-of-state vendor who had incurred nexus, i.e. the responsibility to collect the tax originally. Business owners will not be challenged until 3 years of past liabilities, interest, and penalties can be accrued efficiently by auditors.

As an affiliate seller on Amazon, you may be billed by one or more of the 1300 sales tax districts where your inventory was temporarily stored and nexus sales tax reporting responsibilities assign the tax liability directly to you. As an informed seller or buyer, it is your responsibility to ask questions and to research nexus.  For more see my facebook page.

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Are you looking at the ACA Penalty for 2015?

I know that folks are struggling with the ACA penalty exemption process. A dedicated site has been made available.

Visit https://www.healthcare.gov/exemptions-tool/#/

Have you tried any of the nationwide advocates?  I would like to publish success stories for 800 numbers or links here.  Please use the contact form and allow me to discuss posting your experiences.

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eIFRS is here

Accounting in the USA is changing dynamically this year.  International financial standards are affecting large business reporting being released first quarter, 2015.  Smaller businesses will feel the effects throughout the year through year-end.

Please contact me directly to hear more.

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Planning Time!

It appears the tax environment is stabilizing. Building business and forming business can be done more deftly.

The international accounting standards are coming; have your vendors and suppliers started discussing their plans with you? Have you started discussing your plans with them?

Planning for longer term growth and successive management is advantageous at this time.

Please contact me for more information.

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Property and Business Appraisal Frequency

An objective valuation would be the price at the time of sale between an informed buyer and an informed seller. For those times when it is not desirable or possible to sell, choosing the appraiser and purpose of the valuation becomes critical. Under the proposed changes to generally accepted accounting principles, appraisals to adjust historically valued assets to fair market value may prove necessary.

The same property or business valued for different purposes on the same day could have dramatically different values. Historical cost has been used throughout the United States for many tax and banking processes until recently. Financing looks at the future benefit or expected benefits, and the appraisal discounts for lack of control or marketability allow the user to see the reasons for the valuation. Premiums can be assigned for synergy and opportunities. Clarity on the purpose for the evaluation is essential as it defines both the cost and the level of service required. Purpose of use may trump the valuations method as well as the discounts or premiums assigned.

Fair Market Value is defined as:
The price, expressed in terms of cash equivalents, at which property would change hands between a hypothetical willing and able buyer and a hypothetical willing and able seller, acting at arms length in an open and unrestricted market, when neither is under compulsion to by or sell and when both have reasonable knowledge of the relevant facts.

The user needs to clearly understand the purpose for the valuation and the asset, income, or market use. There are no subsequent events related to valuation. Any assumption may have changed dramatically. The reader is forced to critically examine the report and the assumptions on a line by line, concept by concept valuation.

The car once driven off the dealer lot does not carry the same market value as the car sitting on the lot with less than 50 miles on the odometer. A condo with a legal action filed against the management service may not be marketable without a large discount until the law suit is settled.

Accounting concepts in the United States are undergoing rapid changes. International accounting convergence is still planned. Please contact me for more information.

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