ADP Sales Tax Service

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January 14, 200812-1pm EST

ADP Sales Tax Service

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Housekeeping Items

Today’s webinar will last for 60 minutes, ending at 1pm eastern time.

The last 10 minutes of today’s program have been reserved for questions & answers.

We will launch a brief survey at the conclusion of today’s webinar. Those who complete the survey will be entered into a drawing for an ADP TotalPayDebit Card, preloaded with $100 and good anywhere Visa is accepted.

For more information on the TotalPay Card and other ADP Payment Solutions, visit us on

the web at adp.com

CPE Credit

Are you applying for CPEcredit for today’s webinar?A. YesB. NoC. Not applicable

Requirements for CPE CreditLog in from same e-mail address that you used to registerStay for the full hourAnswer 4/6 polling questions

Polling Question # 1

How are you currently calculating sales and use taxes?A. Use in-house employeesB. Use your ERP system’s native

tax capabilities C. Use third party tax engine (ADP,

Vertex, Sabrix, etc.)D. OtherE. Not applicable

RequirementsLog in from same e-mail address that you used to registerStay for the full hourAnswer 4/6 polling questions

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Today’s Speakers

Annette KovameesDirector of Tax

ComplianceADP

Tim Walsh Sr. Director of Product

ManagementADP

Matthew S. WalshDirector, Tax Research

ADP

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AgendaADP Sales and Use Tax Calculation

Beyond the Tax Engine: ADP Sales Tax Service

Benefits of the ADP Sales Tax Service

Question & Answer Segment

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NASDAQ: ADPFortune 300 company Experts in automating back-office processes such as payroll,

benefits administration, pre-employment services, and sales tax compliance so that organizations can stay focused on the core business

50+ years of experienceRevenues over $8 BillionMore than half a million clients worldwideAAA credit rating from both Moody’s and Standard & Poor’sMajor player in the sales and use tax market since the

acquisition of the former Taxware business in November, 2006

ADP

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ADP Sales and Use Tax Calculation

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Sales & Use Tax Calculation Options

Through its Taxware line of products, ADP is building on more than 30 years of experience in the sales and use tax market. ADP offers sales, use, and Value Added Tax (VAT) solutions Integrations available for…

• Oracle• PeopleSoft• JD Edwards• Siebel• SAP• Microsoft Dynamics GP• InforAnd more!

Turn sales tax compliance into one of your company’s strength

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Sales and Use Tax SystemDomestic tax engine for the USA & Canada

Scalable to accommodate multiple business models Precise taxing jurisdiction assignmentsSales tax exemption processing (STEP) Includes a database of rules for thousands of situations, including full and partial exemptions, special rates, caps, and thresholdsIncludes a comprehensive Product Taxability Matrix that contains over 3,000 classifications of products and servicesAbility to map products to the Taxability Matrix and add customized product codes unique to your business

Records tax calculation results in the Sales and Use Tax Solution Audit File for later reportingDetailed file for internal and external audits Resulting data may be fed into the ADP Sales Tax Service for automated tax returns and reportingAddresses tax compliance for purchases with consumer's use tax capabilities Allows for tax decisions by vendor, business location, product, service, cost center or projectSuperior Point of Sale (POS) functionality delivers both invoice and line-level processing required by retailers

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About ADP’s Tax Content

Out-of-the-box standard product codes and use based exemptions. More standard content means less customization, less maintenance, and faster time to production.Special Tax Rules

• Tax Type Determination• Tax Holidays• Special Tax Zones

Additional content is continually added to cover new tax rules and industriesCentralized data update process

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Tax DiscussionSales Tax Compliance in a Complex World

Tax compliance is costly and cumbersome, a drain on the bottom

line…over $102.5B in 2002** The cost of Tax Compliance, Scott Moody, Sr. Economist,

Tax Foundation, 2002

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Keeping up with tax law changes is time consuming• 748 rate changes in the U.S. alone last year• Changing tax rules for both product and purchaser• Sales tax holidays

Forms updates• Most rate changes impact tax forms and need to be updated• Some jurisdictions regularly change forms• Tax authorities won’t accept out-of-date forms

Tax Law Complexity

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About ADP’s Tax Research Capabilities

Tax Expertise• Clients have direct access to 50 CPA’s, CMI’s*, tax

attorneys, and analysts• Fluent in numerous languages

Superior Tax Content• ADP researches, develops, and maintains content using in-house resources - not outsourced or purchased from third parties.

Industry Leadership• First and strongest supporter of the Streamlined Sales Tax Initiative (SSTI), a nationwide effort to harmonize sales and use taxes

Over 30 years of experience

*CMI = Certified Member of the Institute, a designation from the Institute for Professionals in Taxation (IPT)

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ADP Tax Research

Content update strictly controlled processes and procedures. SAS 70 type II compliant by KPMG audit.

Content updates provided at least once a month.

Updates include new content, law changes, rate changes, processing changes.

Update information letter provided with each summarizing changes.


Describe your most recent audit experience:

A. SmoothB. Moderate number of issuesC. PainfulD. Not applicable



How many sales and use tax returns are you preparing each month?

A. 0-10B. 11-25C. 26-50D. 50+E. Not applicable


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Beyond the Tax Engine: ADP Sales Tax Service

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How Companies are Currently Handling Compliance

• Manual• Reports and spreadsheets are manually consolidated to populate paper or web forms

• Compliance Software• Software containing forms with more or less robust import features/abilities

• Third Party Services• Utilizing external service provider to file forms and potentially remit payments

Challenges Beyond Tax Calculation

1. Mergers/acquisitions and business growth adds to compliance workload

2. Internal review more stringent and time consuming

3. Struggling with state and local jurisdictions

4. Running into penalties and fees

5. Sales tax department spending 70-80% of time on compliance

• Less time for strategic issues• Less time for process improvements• Less time for technology enhancements

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OverviewADP Sales Tax Compliance Service

Compliance Solution• Hosted by ADP• Based on your tax data, ADP will…

• Create and file Sales and Use tax returns (Paper, EDI, Web)

• Make payments (EFT, Check)• Handle all agency notices

ADP handles the payment and filing of taxes to all state and local jurisdictionsLiability for the timing and accuracy shifts to ADPADP has 60 years of tax filing and remittance experience – more than any other U.S. company

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Process DiagramADP Sales Tax Service

ERP, Finance or Accounting Application

Standard Reports

CLIENT

State and Local Jurisdictions

NOTICEHANDLING

SFTP PaymentProcessing

Return Preparation and Filing

Tax Return Copies& Reporting to

Client

Audit File

Tax Engine:Taxware Enterprise or Sales and UseTax System

ADP

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Step-by-Step CalendarADP Sales Tax Service

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High Level ProcessADP Sales Tax Service

ADP executes payments on behalf of client and files returns as required (Web, EDI, Paper)

Due Dates

Funds transfer (Wire, ACH Credit)Business Day 10-15

Returns and reports available for download. Debit notice sent tocustomer - (S/U Liability)

Business Day 8-10

ADP prepares returns and reconciles source data to returns

Business Day 5-8

Customer transmits data – via secure FTP as soon as books are closed (AR/AP)

Business Day 1-4

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ExceptionsADP Sales Tax Service

Pre Payments/Estimated Payments• ADP will track your schedule, remind you and execute

the payment on your behalf

Adjustments• ADP will make adjustments to returns based on client

instructions

Holds• ADP will track your holds and release as appropriate

Amended Returns• ADP will prepare based on client instructions. Additional

fees may apply

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ReportingADP Sales Tax Service

Return Copies• ADP provides copies of all returns for review by client

Reconciliation Reporting• Showing data in vs. data out and any differences on a

high level

Detailed Reporting by Return• Breakdown of amounts by return, showing data received,

holds, adjustments, pre-payments, discounts etc.

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Tax Return Preparation, Filing and Payment

ObtainPre-payment

info

Enter Pre-PaymentInformation

Enter tax dataon forms

PrepareCheck

Request

Approve Voucher

Print Check/Generate

ACH

CollateChecks & returns

Mail Returns

Web File/EDI file

Review &Approval

Run ReportsFrom Tax

Engine

Run Reports/Extract Data

fromERP system/s

Calculate self-

assessed tax

Get Data from Remote

Locations(Stores, BU’s etc.)

Reconcile to G/L

Consolidate toFiling

Spreadsheet

Enter Bad Debt

InfoObtain

Bad Debt info Hold Credits/

Negative Amts

Enter Voucher(AP)

CalculateDiscounts

Review &Approval

Execute ACH(Treasury)

ArchiveBack up

Track CreditsNegative Returns

Notice Handling

P & IAbatementRequests

ManageThresholds &

Due Dates

(Print Returns)

PrepareFor Filing

GetTax Data

PrepareReturns

ProcessPayment

Disburse &File Returns

ProblemResolution

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Web InterfaceADP Sales Tax Service

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Allow 30-90 days from contract signing to go live

Filing set up (Reg ID’s, etc.)

Interface testing & parallel run

Filing transfer: make sure jurisdictions have information on where payments and filings are coming from

Implementation

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What to Expect

Timeline: • 8-10 week anticipated implementation plan.

Process: • Kickoff• Client configuration data gathering• Data delivery and validation• Testing • Upload/download testing and training • Production and support

Implementation: • Our #1 priority is to have you up and running as quickly and as smoothly as possible, while providing full technical and servicerelated support.

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How are you handling your sales and use tax returns today?

A. Use in-house employees

B. Use third party preparers(consultants) in-house

C. Using an outsourced solution

D. Other

E. Not applicable


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How many sources (tax engine, ERP system, spreadsheets, etc.) make up your sales and use tax returns?

A. 1

B. 2 - 5

C. 6 - 9

D. More than 10

E. Not applicable


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Benefits of the ADP Sales Tax Service

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Benefits of Compliance

Time spent on compliance tasks reduced from 70-80%

to just 10-15%

Time can be focused on strategic initiatives• Frees up time to stay ahead of business changes / growth/

M&A rather than react to change• Tax planning / reverse audits• Staff development and growth

Penalty and interest savings

Automated process

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BenefitsTax Calculation

Save time – Free up your tax professionals to control decisions and eliminate time-consuming compliance activities.Reduce risk – Avoid mistakes, costly audits, and legal action.Get the right rate – Stay up-to-date and stay compliant.Automate your tax calculation – Integrate to your ERP system and make more accurate sales and use tax calculations.

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• Controlled Process Flow• ADP responsible for the accuracy of the filings • SOX compliant process

• Return reconciliation to source data• Automated system transfers• Return review by other than preparer• Review for reasonableness• Systematic tracking of ‘manual’ adjustments

• Forms Filing• Timely returns and reports processing• Forms updated monthly or as needed. All forms research is in-

house.• Up to date tracking electronic forms, EDI, webfile responsibilities• Frees tax and accounting staff to focus on key business initiatives

BenefitsBetter/Smoother Sales Tax Process

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BenefitsOn-time Payments, Improved Notice Handling

Payments• Timely payments – Automated Clearing House (ACH) or

check, reduced risk of penalties and interest• Completely automated processing through ADP - moving

over $1 trillion dollars per year.• Comprehensive management of liabilities – no worry that

something has not been paid

• Notice Handling• Timely responses and resolution reduces audit risk and

internal backlog of issues.• Leveraging ADP’s research department if necessary –

seamless to client.

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BenefitsEnd-to-End Management of the Sales Tax Process

More time to spend on key business and strategic initiativesStaying ahead of the curveProactive rather than reactive approach to taxes

• Scalable solution – less concern about staff turnover

• Penalty and interest will likely be reduced• Consistent timely and accurate filings –

reduced audit exposure and risk

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Why Use the ADP Sales Tax Service?

We take care of your sales tax compliance so you can take care

of business.

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How many professionals are currently engaged in filing your sales and use tax returns?

A. 1B. 2C. More than 2D. OtherE. Not applicable


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Final CPE Question

Were program materials relevant and did they contribute to the achievement of the learning objectives?

A. YesB. NoC. Not applicable


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Question & Answer Segment

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Questions & Answers

Annette KovameesDirector of Tax

ComplianceADP

Tim Walsh Sr. Director of Product

ManagementADP

Matthew S. WalshDirector, Tax Research

ADP

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Our Next Webinar

“ADP Sales Tax Solution at Siemens: A Case Study”

• Wednesday, January 21, 12:00pm – 1:00pm • Information and on-line registration:

• ADP.com | Tools & Resources | Events | Webinars | Sales and Use Tax Webinars

ADP Sales Tax Service

Documents

Transcript of ADP Sales Tax Service