presents presents Procurement Cards and Sales Tax Complexities Mastering the Compliance Challenges A Live 110-Minute Teleconference/Webinar with Interactive Q&A Today's panel features: Camille Buccina, Tax Auditor 2, New York Department of Taxation and Finance , Albany, N.Y. Deborah Ranch, Senior Tax Manager, Sara Lee Corp. , St. Louis, Mo. Glenn Feldman, Tax Director, PricewaterhouseCoopers, Tampa, Fla. Douglas DeRito, Principal, Ryan , Atlanta Tuesday, July 27, 2010 The conference begins at: The conference begins at: 1 pm Eastern 12 pm Central 11 am Mountain 10 am Pacific 10 am Pacific You can access the audio portion of the conference on the telephone or by using your computer's speakers. Please refer to the dial in/ log in instructions emailed to registrations.
For Continuing Education purposes, g please let us know how many people are listening at your location by g y y • closing the notification box • and typing in the chat box your • and typing in the chat box your company name and the number of attendees attendees. • Then click the blue icon beside the box to send to send. For live event only
• If you are listening via your computer If you are listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection. lit f i t t ti • If the sound quality is not satisfactory and you are listening via your computer speakers, li t i i t k please dial 1-866-873-1442 and enter your PIN when prompted. Otherwise, please send e p o p ed O e se, p ease se d us a chat or e-mail sound@straffordpub.com immediately so we can address the problem. • If you dialed in and have any difficulties during the call, press *0 for assistance.
Procurement Cards And Sales Procurement Cards And Sales Tax Complexities Webinar July 27, 2010 Camille Buccina, New York Department of Deborah Ranch, Sara Lee Corp. Taxation and Finance debbie.ranch@saralee.com camille_buccina@tax.state.ny.us ill b i @t t t Glenn Feldman, PricewaterhouseCoopers Douglas DeRito, Ryan glenn feldman@us pwc com glenn.feldman@us.pwc.com doug derito@ryanco com doug.derito@ryanco.com
Today’s Program Revenue Agency’s Perspective Slides 6-14 ( Camille Buccina ) Sara Lee Corp.’s Experiences Slides 15-21 ( Deborah Ranch ) ( Deborah Ranch ) Best Practices For Corporate Taxpayers With P-Cards, Part I Slides 22-34 ( Glenn Feldman ) Best Practices For Corporate Taxpayers With P-Cards, Part II Slides 35-39 i i h d lid ( Douglas DeRito ) 5
Revenue Agency’s P Perspective ti Camille Buccina, New York Department of Camille Buccina, New York Department of Taxation and Finance
New York State Sales And Use New York State Sales And Use Tax Law States: Tax Law States: Maintain records Make records available Preserve records for three years Reg. 533.2, NYS sales and use tax law 1132, 1135 Article 28k, sales and use tax law Sect. 1135 7
Failure To Keep Adequate Failure To Keep Adequate p p q q Records Could Result In: Records Could Result In: Penalties Interest Interest Revocation of certificate of authority Result: Out of business 8
Required To: Required To: q File Sales And Use Tax Returns File Sales And Use Tax Returns Monthly Quarterly Quarterly Annually 9
Be Prepared To: Be Prepared To: Be Prepared To: Be Prepared To: Have records available Separate procurement card transactions ◦ General ledger account ◦ Extraction ◦ Extraction – special report special report ◦ Electronic format 10
Be Prepared To: (Cont.) Be Prepared To: (Cont.) Be Prepared To: (Cont.) Be Prepared To: (Cont.) Manual review and verification • Estimation method • New York State prefers that the precise amount of tax is paid on New York State prefers that the precise amount of tax is paid on each purchase. 11
Review Of Records Review Of Records Review Of Records Review Of Records Detail review Test period: Form AU-377 12 Test period Audit Method Test period: Form AU 377.12, Test period Audit Method Election Form Stat sample Stat sample 12
What About Exempt Sales? What About Exempt Sales? What About Exempt Sales? What About Exempt Sales? • Resellers Resellers • Resale certificate Form ST-120 • Single transactions • Blanket certificates • Exempt purchasers • Exempt purchasers • U.S. government • New York State • United Nations • Exempt organizations 13
References References References References Web site: www.nystax.gov Telephone: (800 225-5829 Publication 900, Important Information for Business Owners Publication 750 A Guide to Sales Tax in New York State Publication 750, A Guide to Sales Tax in New York State Publication 38, Your Rights as a Taxpayer Publication 850, New York State and Local Sales and Use Tax Quick Reference Guide Q 14
Sara Lee Corp.’s E Experiences i Deborah Ranch, Sara Lee Corp. Deborah Ranch, Sara Lee Corp.
Sara Lee Structure • • The Sara Lee P card program is designed to expedite the purchase and The Sara Lee P-card program is designed to expedite the purchase and receipt of goods and services. • Our P-card program is used for, but not limited to, purchases of: office O P d i d f b t t li it d t h f ffi products, general maintenance and repair operations, computers, direct materials, freight/shipping, postage, utilities and services. Travel and entertainment expenses are not allowed under the P-card program entertainment expenses are not allowed under the P card program (there is a separate card issued for these types of expenses). • T Two general categories of purchases l t i f h – Informal: Employee makes one-time, ad hoc purchase at local retailer 16
Sara Lee Structure (Cont.) – Formal: Employee chooses item via an online catalog and makes e- purchase that way • Company is not currently using any type of outside software package to monitor these transactions for sales/use tax purposes. – Neither sales tax rate verification nor – Neither sales tax rate verification, nor – Use tax accrual • With the new purchasing system, tax department’s hope is to get all catalog vendors to Level 3, where sales tax information will be readily available via monthly reports from the system. 17
Sara Lee Structure (Cont.) • Current approach relies heavily on knowledge and training of field personnel. – Purchasing employee takes responsibility, whether purchasing in Purchasing employee takes responsibility whether purchasing in person or via online catalog. – When making a purchase from online catalog, purchasing/approving employees have the ability to remove tax purchasing/approving employees have the ability to remove tax prior to approving payment. • T Tax department reviews purchases from a GL/expense account review d t t i h f GL/ t i of what’s going through the SAP system. 18
Staff Training • Training of field personnel on P-card policy and practices takes place in the following ways: – Online P-card policy manual p y – During annual meeting held for all plant controllers – Tax department posting of general sales tax guidelines/charts on the company intranet site the company intranet site – Internal audit reviews include standard testing of retention compliance 19
Pros To Sara Lee Approach • Is the only approach the tax department currently has in place – By no means is it foolproof, but at least it is something By no means is it foolproof but at least it is something • So far, the accrual methodology has held up under scrutiny; no serious i issues have been raised upon audit h b i d dit 20
Cons To Sara Lee Approach • Tax staff is constantly working to ensure the company is capturing all data needed. • Requires frequent review to ensure the accrual percentages are correct or at least within the tolerance range g • Approach isn’t looking at where the company shouldn’t be paying tax 21
B Best Practices For t P ti F Corporate Taxpayers p p y With P-Cards, Part I Glenn Feldman, PricewaterhouseCoopers Glenn Feldman, PricewaterhouseCoopers
Background A. Procurement cards (commonly called “P-cards”) are corporate credit cards that let companies purchase high-volume, low-cost goods without completing purchase orders . 1) This lowers the cost of processing purchase orders by limiting their use to costlier items, and saves the internal cost of processing a check and postage. B. However, there are many state sales tax issues that should be considered when using these cards. co s de ed w e us g ese ca ds. 23
Sales Tax Issues A. Sales tax info must be retained for verification on state audit. B. It can sometimes be difficult to determine when and where sale took place. C. Internal controls for, and procedures around, P-card usage will determine an enterprise’s sales/use tax compliance needs. 24
Recommend
More recommend
