Biographical Information Tia Stern, Manager Sales & Use Tax, - PDF document

Tuesday & Wednesday, January 28‐29, 2020 Hya� Regency Columbus, Columbus, Ohio Workshop GG A Changing Marketplace … Marketplace Facilitator Laws, Industry Considerations, and Technology to Help Businesses Succeed Wednesday, January 29, 2020 11:00 a.m. to 12:30 p.m.

Biographical Information Tia Stern, Manager – Sales & Use Tax, The Wendy’s Company One Dave Thomas Blvd, Dublin OH 43017 614.764.3352 FAX: 614.764.3296 tia.stern@wendys.com Tia has over twenty-seven years of multi-state and Canadian VAT tax experience in the service, manufacturing, retail, construction, and most recently the QSR industry where she has been the Manager – Sales & Use tax for The Wendy’s Company for the past three years overseeing compliance for corporate restaurants, audits, and tax planning. Seven years ago, Tia and her husband started a small franchise business in automotive interior presentation where she manages the accounting, finance and payroll functions. Tia is a member of COST, IPT and RISTAP. She is a graduate of Franklin University with a B.A in Accounting. Susan Haffield, Partner, PricewaterhouseCoopers LLP 45 South 7th Street, #3400, Minneapolis, MN, 55402 612-596-4842 susan.haffield@pwc.com Susan Haffield is a partner in the Minneapolis office of PwC. Susan provides consulting services focusing on indirect tax strategy, audit defense, refund analysis, structures, sales tax reserves, process improvements, e commerce, and nexus evaluations. She also specializes in indirect taxes associated with the retail and consumer products industries. Susan has been actively involved in the Business Advisory Council of the Streamlined Sales Tax initiative. She is a frequent speaker for organizations such as Council on State Taxation, Ohio Tax Conference, Paul J Hartman SALT Forum, Institute for Professionals in Taxation, Tax Executive Institute, and New York University. Susan has over 30 years of experience. In addition to her experience in public accounting, Sue was a manager in the Cargill tax department where she focused on indirect taxes and state and local income taxes. She joined PricewaterhouseCoopers in June 2002. Sara A. Caldwell, Esq., CPA, Legal Counsel, Ohio Department of Taxation 4485 Northland Ridge Blvd. Columbus, OH 43229 614-995-0990 Fax: 614-728-1806 Sara.Caldwell@tax.state.oh.us Sara began her career with the Ohio Department of Taxation in 2012 and is currently employed as legal counsel for motor fuel tax, international fuel tax agreement (“IFTA”), gross casino revenue tax, alcoholic beverages taxes, horse racing tax and replacement tire fee. Sara additionally assists with matters on other taxes including public utilities, tobacco and sales tax. Sara’s primary responsibilities include providing legal advice to department personnel, reviewing legislation, drafting information releases and responding to requests for tax commissioner and informal opinions. Sara was previously employed as an attorney in the Appeals Management Division and served as a liaison between the department and the Taxation Section of the Ohio Attorney General’s office. Prior to that, Sara worked as an attorney in the Division of Tax Equalization, focusing on real estate tax exemption related matters. Sara graduated from Ohio University with a B.B.A. in Accounting and the University of Toledo College of Law. Sara is licensed to practice law in the State of Ohio and maintains an active Ohio CPA license.

29 th Annual Ohio Tax Conference January 29, 20 19 A Cha nging Ma rketp la ce ... Ma rketp la ce listed gets listed here. Fa cilita tor La w s, Ind ustry Consid era tions, a nd Technology to Help Businesses Succeed Sara Caldwell Legal Counsel, Ohio Department of Taxation sara.caldwell@tax.state.oh.us Tia Stern The Wendy’s Company Susan Haffield Tia.Stern@wendys.com PwC susan.haffield@pwc.com

Agend a • The Rise of Marketplace Laws • Features of a Marketplace • A Look at Ohio’s Law • Practical Issues • Case Study • Technology PwC 2

3 The Rise of Ma rketp la ce La w s PwC

Fea tures of a Ma rketp la ce Marketplace Facilitator Definition Exam ple: Marketplace Facilitator - A person that facilitates the retail sale of tangible personal property or digital property by listing or advertising the tangible personal property for sale at retail and either directly or indirectly through agreements or arrangements with third parties, collects the payment from the purchaser, and transmits the payment to the person selling the property  Key Features o Listing or advertising the item for sale o Collects payment o Transmits the payment to seller PwC 4

Fea tures of a Ma rketp la ce Three distinct legislative m odels: • With no exceptions, marketplace provider/ facilitator collects and remits sales tax. • A waiver process where registered third-party sales tax vendors can opt out of the platform remitting on their behalf. • Platform has the option to collect and remit sales tax on third-party sales, or comply with the ‘Colorado-style” information reporting requirements. PwC 5

Ohio Ma rketp la ce Fa cilita tor La w Definition of “Seller” “A m arketplace facilitator shall be treated as the ‘seller’with respect to all sales facilitated by the m arketplace facilitator on behalf of one or more m arketplace sellers… ” R.C. 5741.01(E) Not subject to the Ohio “marketplace facilitator” laws: • Provision of advertising services with no direct/ indirect payment collection, payment processing or virtual currency provided • Lodging by a hotel furnished to transient guests PwC 6

Ohio Ma rketp la ce Fa cilita tor La w Ohio Definitions – See R.C. 5741.0 1(T) a nd (U) Marketplace facilitator • Person that owns, operates, or controls a physical or electronic m arketplace • Retail sales are facilitated on behalf of one or more marketplace sellers • Includes an affiliate of such a person Marketplace seller • Person on behalf of which a m arketplace facilitator facilitates the sale of tangible personal property for storage, use or consumption in Ohio or • Services the benefit of which are realized in Ohio • Does not need to have substantial nexus with Ohio PwC 7

Ohio Ma rketp la ce Fa cilita tor La w W ha t is a n electronic m a rketp la ce? • Digital distribution services • Digital distribution platforms • Online portals • Application stores • Computer software applications • In-app purchase mechanisms • Other digital products Note – la w a lso a p p lies to p hy sica l m a rketp la ces See R.C. 5741.01(V) PwC 8

Ohio Ma rketp la ce Fa cilita tor La w W ha t d oes it m ea n to “fa cilita te” reta il sa les? A m arketplace facilitator must directly or indirectly do any of the following: • Lists, makes available or advertises the taxable goods or services • Transmits or otherwise communicates the offer or acceptance of sale • Provide the electronic/ physical infrastructure that connects the seller to consumer • Provides the marketplace in which the sale was made or otherwise facilitates the sale • Fulfillment or storage services • Sets the price • Provides or offers customer service for taking orders and returns/ exchanges • Identifies/ brands the sale as the marketplace facilitator’s • Provides software or R&D services of the aspects above AND PwC 9

Ohio Ma rketp la ce Fa cilita tor La w W ha t d oes it m ea n to “fa cilita te” reta il sa les? (con’t) A m arketplace facilitator must also (directly or indirectly) do any of the following: • Collect the price • Provide payment processing services • Collect payment in connection with a third party and transmit payment to the marketplace seller, regardless of whether the third party receives compensation or consideration • Provide virtual currency See R.C. 5741.01(W) PwC 10

Ohio Nexus Threshold s Econom ic nexus • Ohio follows the Wayfair standard, i.e., sales in excess of $100,000 or 200 or more separate transactions • Include both direct/ marketplace facilitator sales and taxable/ non- taxable transactions in determining thresholds • Generally determine the number of transactions by invoice not by the number of items on an invoice • Economic nexus standards do not apply if physical presence PwC 11

Ohio Nexus Threshold s How to d eterm ine w hen econom ic nexus is m et? • Look to the current and/ or preceding calendar year • If thresholds already met in 20 18 , the obligation to collect and file began Septem ber 1, 20 19 • Otherwise, the collection/ filing requirement begins “… on and after the first day of the first month that begins at least thirty days after the marketplace facilitator first has substantial nexus with this state.” R.C. 5741.01(E) Exam ple: A marketplace facilitator made its 200 th transaction in • Ohio on Decem ber 15, 20 19 . The facilitator must begin collecting and remitting on February 1, 20 20 . PwC 12

Ohio Nexus Threshold s Prior Nexus Standards Mostly unchanged by Am. Sub. H.B. No. 166, 133 rd GA • Rep ea led : • Software nexus • Network nexus • Commission/ compensation agreement with Ohio resident for referral of customers with gross receipts in excess of $10,000 PwC 13