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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Corporate Tax

Date & Time
  • event Date

    Tuesday, March 5, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    110 minutes

Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

$247.00
CPE
ALL

This course will prepare tax specialists to handle the full range of potential sales and use tax issues involved in drop shipments, whether as vendors, shippers, or customers. The panelist will provide an integrated approach to compliance, documentation, and tax planning in this evolving and complex area of tax.

Faculty

Michael T. Dillon
President
Dillon Tax Consulting

Mr. Dillon is an attorney and founder specializing in multistate sales and use tax matters for multistate and multinational businesses. For more than 25 years, as leader of his firm, practice leader for global accounting firms and in-house for two publicly-traded E-commcerce and Technology companies, Mr. Dillon has successfully helped companies identify multistate nexus, negotiate settlements of historical exposure, register and automate sales tax compliance processes, and address risk during M&A activity.  He has successfully represented taxpayers in over 200 sales tax audits, and 500 Voluntry Disclosure Agreements (VDA), often coming in when “all hope is lost” to beneficially resolve the matter.  Mr. Dillon is a member of the State and Local Tax Advisory Board for Strafford Publications. He is highly sought to lecture and author articles on sales tax matters for organizations such as AICPA, Strafford, BNA, CCH and the Center for Professional Education.

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Description

Using drop shippers, i.e., a manufacturer or distributor, to fulfill customer orders presents one of the most difficult compliance challenges in sales and use tax. If a shipper is registered for tax purposes in the destination state, it must collect tax unless it has the seller's resale certificate.

If the destination state is among those that don't accept other states' certificates, a nasty spat over tax could ensue between a seller and drop shipper. What is the taxable sales price in that case? What documentation is required--for you and your customer?

Constant awareness of different states' taxation policies toward drop shipping--and fine-tuning of your company's tax planning in this area--is critical to keep a tax staff's management of the process under control.

Listen as Michael T. (Mike) Dillon, President at Dillon Tax Consulting, clarifies the confusion regarding sales tax treatment of drop shipments. The webinar will provide a framework to manage the associated tax research, compliance, and planning aspects more effectively.

Outline

  1. Fundamental drop shipping concepts
  2. Problematic scenarios and issues to anticipate
    1. Nexus: What are the potential sales and income nexus traps for parties involved in a drop shipment transaction?
    2. Documentation
  3. Ongoing compliance demands with drop shipping
  4. States that pose particular issues

Benefits

The panelist will review these and other key topics:

  • What are the larger states' particular rules on drop shipping and sales tax? What is the tenor of audits in those states that don't automatically accept another state's resale certificate?
  • What gets taxed if a resale certificate is not accepted: the price the seller charges to the customer or the price the drop shipper charges to the seller?
  • What style and level of documentation are prudent, both for the customer invoice and internal recordkeeping at the seller or drop shipper?
  • What are the potential sales and income nexus traps for parties involved in a drop shipment transaction?

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Identify the types of drop shipping transactions and varying state rules about taxing them
  • Recognize states that will accept multi-jurisdiction resale certificates and those that do not
  • Determine trends and best practices to optimize your company's sales and use tax planning concerning drop shipment sales
  • Ascertain key state differences in the treatment of the sales taxation of drop shipments

  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite: Three years+ business or public firm experience at mid-level within the organization, preparing complex state income tax forms and schedules; supervisory authority over other preparers/accountants. Some knowledge and understanding of state taxation of drop shipments and familiarity with sales tax nexus issues.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.