Farewell 2017; Here’s To You 2018!

This was supposed to be a “December” article – but the month was just crazy – so here I am on New Year’s Day 2018 reflecting on 2017 as well as looking ahead to 2018.  What a year it has been – hasn’t it?

So much has happened in the sales tax world, our heads were spinning here at the Sales Tax Institute – things that could have lasting consequences in how we manage sales tax.  The biggest of course all centered around nexus…

  • Economic Nexus wins the prize for the most impactful events.  Although we had a few states (Alabama and Tennessee) pass provisions in 2016, South Dakota took the fast track approach.  We will hear this week if the U.S. Supreme Court will hear the Wayfair case which could overturn Quill and make the Dakotas, with a combined population of just over 1.6 million, the states that define nexus for the entire country!  Keep an eye out on Jan. 5 for the news from SCOTUS. (of course on Twitter @SalesTaxInst)
  • Massachusetts decided to take a slightly different approach – “cookie” nexus!  Ohio will consider software licenses in the state to create nexus starting January 1, 2018

  • Over the summer, discussions between 25 states, the MTC and the online seller community resulted in a once in a lifetime Online Seller Amnesty Program.  In all my years in the sales tax field, I can only remember one other multi-state full forgiveness amnesty program that was offered – Streamlined Sales Tax.  The Online Seller program was ground breaking, at a breakneck speed and quite controversial.  Should online sellers come forward and start collecting tax to get the prior period forgiveness?  Or should they try to keep off the radar?  We talked to many companies about this – and ended up helping close to 20 companies participate.  The MTC was overwhelmed with almost 900 participants, they are still trying to process the applications.  The states had hoped to capture sales tax on the holiday season but hardly any applications were due before year end.  It could be months before all the registrations are in place.
  • But what about all the other states that didn’t participate?  Well, they have been busy too.  From Massachusetts suing Amazon to get the list of their 3rd party sellers with inventory in Massachusetts warehouses, to South Carolina assessing Amazon for sales made by the 3rd party sellers, to Amazon agreeing to collect tax on sales made by all 3rd party sellers that aren’t otherwise registered in Washington under their new Marketplace nexus rules effective January 1, 2018.  We also know that California, Washington and Pennsylvania have been aggressively sending notices to online sellers.
  • And then based on the Colorado DMA case, a number of states followed their lead and enacted notice and reporting provisions.  Some of them have included egregious penalties for noncompliance (Rhode Island wins this one with a minimum $50,000 penalty if you fail to do all 5 things required!).  And their goal is of course to get companies to “voluntarily” register instead of complying.
  • So how can you keep on top of all these crazy nexus changes?  We’ve got you covered with our Remote Seller Nexus Chart.   And we are updating our popular 5 Things to Understand About Your Nexus Footprint whitepaper – let us know if you want us to send you the link as soon as it is posted!

Another trend we followed (because it is in our backyard!) was the Cook County Sweetened Beverage Tax saga!  It truly was a saga – our blog post got 13 updates!  It was passed, delayed, challenged, upheld, took effect, and then political forces resulted in a repeal after just a few months.  It was great fun to see our friends from Horwood, Marcus & Berk in action during the hearings I attended.  Although the Cook County Tax didn’t survive, other localities have been successful in enacting and sustaining their sweetened beverage taxes, including Seattle’s 1.75 cent per ounce tax that started January 1, 2018.

The other area we have seen some activity relates to taxing the sharing economy, with the AirBnb model getting a lot of attention.  Who is the seller – the platform or the individual provider?  In a number of states, including South Dakota, the platform providers are agreeing to collect to protect their ability to operate.  Ride sharing platforms have done the same.  It will be interesting to see how this approach plays out as more industries join the sharing model!

And then administratively, two big changes happened in 2017!  The California Board of Equalization is now the California Department of Tax and Fee Administration (CDTFA).  That’s going to take a while for people to stop using BOE and start saying CDTFA.  Not sure I’ll get there anytime soon!  And likely to help set up the ability to collect tax if federal legislation passes, Arizona now administers all local taxes (although the locals still can have alternative taxability rules).  And a number of states had their own amnesties with more coming for 2018.  Stay on top of all these with our Tax Amnesty Chart.

How do we stay on top of so much stuff?  Great question – and it is a lot of reading, following, and listening to what is going on.  I attended a number of conferences this year – usually as a speaker, including a few new ones like CPA Practice Advisor Ensuring Success which was a new format for me – a virtual conference where the speakers were together, but all attendees were virtual.  Kudos to Gail Perry for her 10 hour marathon moderation!  It was an honor to participate.

Where else was I?  I crisscrossed the country – in fact in one week I went from Chicago to San Diego to Orlando (via SFO) to Chicago to Lawrence, KS.  Yikes, that was a tough week but so rewarding being at Vertex Exchange where I taught Sales Tax Basics to the largest breakout group of the entire conference (on Sunday afternoon!) and then heading to the COST Annual Meeting where I got to see old friends like Doug Lindholm and Chuck Drury. I wrapped up the week at the KU School of Business Dean’s Advisory Board with our brand-new Dean – L. Paige Fields.  This board meeting was different for me, as I had ended my term as Board Chair at our April board meeting.  (and yes, they made me cry!)

I was also selected this year to the Accounting Today 100 Most Influential People in Accounting (for the 3rd time).  I take my role in the sales tax community seriously and am honored to be in this esteemed group.  All of you help me stay on my toes!

The Sales Tax Institute also had some changes in 2017.  We are happy to have Tatisa Joiner as our Office Administrator (and friendly voice when you call) and our newest addition is Hannah Bannister who joins as a Marketing Coordinator.  She joins John Londay who celebrated his 9th year with us!  We continued our monthly webinars and in late 2016 we launched our Webinars On Demand with our 3 most popular webinars.  Hannah has been working on getting our next group ready to launch – Tax Challenges with Services, Effective Audit Defense Techniques and Effective Tax Research.  Look for announcements on these during Q1.

We also had some fun during the year.  As a group we went with our marketing/business advisors (Brad Farris & Angela Jackson) from Anchor Advisors on the Chicago Architecture River Cruise (including those important to us all!).  I also tagged on some R&R to some of my conferences including visiting family in Rhode Island after speaking at Accountex in Boston and something from my bucket list – a visit to the Grand Canyon after the Arizona Tax Conference.  If you haven’t been there – I highly recommend it!  Of course there was a Jayhawk Basketball and Football game enjoyed after Board meetings as well as some great family time.  We celebrated my dad’s 80th birthday which was so much fun.  Some of you might have met my dad at our 20th Anniversary party.  He was surrounded by his kids as well as siblings who came from both coasts (Oregon and New Hampshire) and Montana.

What’s coming up for 2018 you might ask?  From the tax perspective, we will be talking about that in our January webinar so you should join us on January 30!  We are also launching a brand new website in February so keep your eyes out for that.  We are super excited to update our look and what we can offer you for sales tax resources.  We’ve loved working with Orbit Media on this project.  We are also working on some new things for our Basics of Sales Tax and Advanced Workshop classes – will you join us?  It will be great fun!  We’ve also been talking about some new learning opportunities – not ready for announcements yet – but hopefully this summer!  And of course, if there is something you are looking for, please send us a note – whether it is a topic you need to learn about, a resource you find helpful that we should include on our Helpful Links Page or some individual consulting you need, we can help.

Before we jump into the new year, I’m going to take a little R&L (relax and learning) trip.  I was never able to do a study abroad trip when I was in college, but that is what I will be doing for the next 10 days!  I guess it is a perk of my involvement at KU!  I’ll be joining the Supply Chain class for a trip to Panama!  We lived there 50 years ago (my first memories) and it has been my dream to go back.  This is going to be so much fun – I’ve gone through all the family pictures from the 3 years we lived there and now I’m on a mission to get current pictures of as many of the places as I can.  I don’t know that I can recreate this one – but here’s me at about 6 years old in a traditional Panama dress!  (I was pretty cute, wasn’t I?)

Keep an eye on social media (@yettertax and @KUsupplychain) as well as my linkedin.com/in/dianeyetter for updates.  I’m excited to learn about supply chain (not tax!) and share what I know about logistics, manufacturing and international business with the great group of students I’ll be with.  Thanks to Roger Woody for letting me tag along.

Thanks to all who helped make 2017 a great year!  I’m really looking forward to 2018 – so much excitement ahead of us.  I hope the work we do at the Sales Tax Institute and YETTER Tax help you stay on top of what you need to know.  We wouldn’t be here if it wasn’t for you – so THANK YOU!

Happy New Year!

Posted on January 2, 2018

About the Author:

Diane L. Yetter

Founder of the Sales Tax Institute

Diane L. Yetter is a strategist, advisor, speaker, and author in the field of sales and use tax. She is president and founder of YETTER Tax and founder of the Sales Tax Institute. You can find Diane on LinkedIn and Twitter.