Divisions & Practices
State Tax Consulting Group: Automated Compliance & Maintenance
Automated Compliance and Maintenance (ACM) involves the service of automating state and local sales/use tax compliance functions including billing sales/use tax to customers, reporting the tax to the state and local authorities via returns, validation of sales/use taxes paid to vendors, and more importantly, the accrual of use tax.
In most cases, this service is performed in conjunction with an enterprise-wide software implementation such as SAP, Oracle, PeopleSoft, Baan, J.D. Edwards or Lawson. These software packages are powerful enablers to organizations, and the implementation of such software provides opportunities for automation and improved accuracy of the sales/use tax accrual function.
This can be accomplished by using the sales/use tax sensitive information available within a financial application package in the host system, interfaced to an external sales/use tax bolt-on software product such as Vertex Sales Tax Q Series. Establishing the interface requirements correctly between the host system and the bolt-on system, and the proper configuration of both systems is critical to accurate sales/use tax compliance.
The ACM process involves (1) the mapping of reporting entities to a hierarchy in the ERP software, (2) identifying and defining the key data elements available for making sales/use tax decisions for sales and purchase transactions, (3) identifying which data elements will be included in the new processes, (4) establishing interface requirements/restrictions, (5) validating/updating existing tax decisions used by the company and identifying areas where additional tax decisions are required, (6) establishing the configuration requirements for Vertex's TDM, (7) populate and map the relevant tax decisions in Vertex's modules, and (8) write a sales/use tax test script and perform functionality testing of the automated accrual process.
Key to the process is the evaluation of established host software fields that capture the information needed for taxability determinations and the development of a master tax decision matrix. This information will include material groups, cost centers, work orders, general ledger account number, WBS elements (if available), and other data that will enhance the automation of the tax function. Standard Vertex interface data gaps will be resolved by defining and utilizing existing user exits or other procedures to accomplish the appropriate tax decisions.
Sale/use tax decisions cannot be made solely on the type of property or service acquired, but rather how and where the property or service is used must also be considered. Purchasing agents or accounts payable personnel who are generally unfamiliar with the nuances of sales/use tax exemptions and requirements typically make these decisions. The significance of sales/use taxes should be a primary concern to tax departments during any enterprise-wide software implementation project. Traditional transaction-based compliance can give way to technological streamlining and simplified compliance procedures and offers the following advantages:
- Only trained tax professionals make use tax decisions within the bolt-on software product;
- Large sales/use tax overpayments and reverse audit fees are eliminated;
- Reduced exposure for sales/use tax audits which generally result in large assessments and consume significant amounts of time and expense; and
- More time will be available for value-added tax department activities rather than traditional compliance and audit management.
Timothy M. Kirkpatrick, Principal
Tax Reporting Performance Improvement
PwC's global network of tax professionals can deliver a wide range of customized technical tax accounting, process and technology consulting services. Services include:
- Tax accounting performance improvement
- Balance sheet tax account validation: payable and deferred taxes
- Tax data management services
- Implementation of 3rd party tax provision and compliance software
- Risk & controls assistance
- Financial statement carve-out support
- IFRS readiness
- Tax provision outsourcing
Issue-specific tax accounting consulting — covering such topics as: uncertain tax positions (UTP), valuation allowances, business combinations, intra-period allocations, and accounting for stock-based compensation.
Tim Lapetina, Partner
State Tax Consulting Group: Telecommunications Tax Automation
Given the complex and continually evolving nature of the telecommunications industry, operations are often spread throughout the United States causing compliance with transactional taxes to become a difficult task. Due to differing positions of the various state and local jurisdictions on the treatment of telecommunications services, automation of this function becomes an unquestionable requirement that Vertex Communications Tax and PricewaterhouseCoopers can help you solve.
PricewaterhouseCoopers has developed a Telecom Tax Automation ("TTA") strategy and process based on considerable experience, which will ensure that the desired Vertex Communications Tax compliance results are achieved.
The TTA process involves:
- Creation of tax business requirements;
- Performing tax determination studies and identifying jurisdictions where custom tax decisions or rates are necessary;
- Performing product analysis to determine where custom category/service codes are necessary;
- Product mapping to Vertex Communications Tax category/service codes;
- Implementation support providing on-site consulting and advisory services;
- Performing unit testing;
- Training related to setup and maintenance;
- Creation of tax reporting requirements;
- Automation of telecommuniations fees compliance; and/or
- Performing user acceptance testing.
Specialized TTA tools developed and maintained by PricewaterhouseCoopers include:
- The GUI: This graphical user interface allows Vertex Communications Tax users to create custom tax decisions and rates, review tax decisions, and kick-off the monthly update process.
- Translation Table: This table translates Vertex Communications Tax Type Codes to the tax, fee and surcharge descriptions required by each taxing jurisdiction. This table is necessary to accurately present taxes, fees, and surcharges on customer invoices.
- Interstate Private Line Table: This table provides revenue apportioning rules in those jurisdictions imposing a tax, fees, and/or surcharge on interstate private line services. As many states require specific apportionment rules that differ from that of interstate toll calls, this table will help you reduce potential tax liabilities caused by complex taxation methods.
Coupled with Vertex Communications Tax, PwC's team of telecommunications experts can help make the automation of tax compliance as simple as possible.
Brian Goldstein, Partner
Information provided by Vertex Consulting Alliances are self proclaimed. Vertex has not verified the information and Vertex is not responsible for the accuracy of the information.