Rick Sowan Discusses Sales Tax EP 43

Sales Tax

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EP43: Transcription

Radio Host: Alright we are back,8:02 right here 620AM KEXB your experts in business, I am Brian Glenn thanks so much for joining us on this Wednesday morning. Good morning, have you voted? And did your vote actually count? And did you vote for the right person? That is one of the questions we talked about in the 7 o’clock hour as we had a volunteer that works in Terrell County at one of the polling stations call up and tell us first hand that she’s witnessing that people are not having their vote count. They are voting straight Republican and when you go to confirm the vote, it says they are voting for Hillary. And they’ve gotta go grab an official and say what’s going on and of course the officials according to the Fort Worth Star-Telegram which by the way is the only media here locally I’ve seen even cover the story and if you’ve found it somewhere else please let me know I wanna see it. But they are kind of spending it as a user error. That it’s your problem, that you are not clicking the right thing. Now I’ve had several people on Facebook, I had one person just text me a few minutes ago said “no,no.It happened to us. We are down in Hale County. We are in Jefferson County, We are in Orange County, we are in Southeast Texas, we are in Tyler County, it’s happening to us. It’s done an isolated incident. It’s not a friend of a friend of a friend of a friend. Which is what they wanna make it seem like it’s all one big rumor meal that’s going around. That’s not really happening to anybody but it’s happening and all I wanna do this morning is give you a heads up that when you walk into that voting booth, that you confirm your vote and watch very closely what you are doing. Keep an eye on what you are doing and when you say submit make sure everything is highlighted that’s it! I mean that’s all I wanna do and a very valid point.
Rick Sowan: That’s a very good public service announcement because I think every voter should make sure they verify their vote.
Radio Host: And all fairness Rick, that’s even on the democratic side as well.
Rick Sowan: Absolutely.
Radio Host: If you wanna vote straight Democrat ticket, make sure that Hillary Clinton is highlighted. And it’s only fair I’m just gonna say it. But so knowing that I’m gonna go later today at the polling station in McKinney and I’m gonna keep an eye on it and I’ll know firsthand if that happened to me. Because all I can go off is what has happened to other people and I just thought you know what, it’s just a heads up. And so if you notice people outside these polling areas were going out telling people hey just give your heads up before you confirm your vote, make sure your candidate is selected. So the doing about word of mouth right now which is good. Alright we’ll get into what Rick is here to talk about but first let’s kick off this hour with our good friend Neal McCoy and our daily Pledge of Allegiance. (Neal McCoy recites Pledge of Allegiance)
Radio Host: Amen. You gotta love that guy.
Rick Sowan: Amen.
Radio Host: Neal McCoy we need to do that every day. Alright Rick Sowan from BKM Sowan Horan is here and of course Daniele is in the parking lot still. We’ll get her in the building before too long. I guess security is patted her down.
Rick Sowan: I’m sure it is. She’s questionable.
Radio Host: Yeah. She made the list of questionables but you got some tax information that a lot of business owners need to be aware of.
Rick Sowan: Absolutely. There’s a lot of change going on right now regarding sales tax that I wanna make sure the listeners just tuned into and make sure that they are taking advantage of every opportunity they have to save sales tax because sales tax is 8.25% so considerable amount of money and so shouldn’t be taken lightly and there are some recent administrative clarifications that I think will make some opportunities available to some people that aren’t thinking about that right now.
Radio Host: I always like to look, or reflect back what the sales tax was back in the day. You know people always talked about gasoline back in the day was 75 cents because I remember being about 75 cents probably. What was sales tax was 20 years ago?
Rick Sowan: It’s a lot less than 8.25%.But every year it’s probably gone up, not every year but probably in 20 years it’s gone up.
Radio Host: And of course the whole debate now with the people of Arlington about throwing a little bit of about you know…that’s a heated topic.
Rick Sowan: Yes. You know that’s where they are taking the revenue dollars and trying to partial it out to these opportunities they have for same development or other types of real estate development. What I was hoping to bring to some of the listeners is an opportunity may be to have a frank discussion regarding your sales tax exposures with your professional service providers because they can also be large depending on the circumstances and what you do as a company. Your exposures can be rather large and you should not ignore them because states are becoming with a drop in oil and gas, revenues the stakes are becoming have to find areas to fix those gaps and sales tax is an easy area for them to go after so we just wanna makes sure that our clients understand their exposures. They can make decisions regarding whether they want to comply or not comply but they need to understand their exposures.
Radio Host: Absolutely. Rick Sowan joining us from BKM Sowan Horan. As you guys always do on this Wednesday before we get into how did you drive into work today?
Rick Sowan: Very good, actually surprised it took me 15 minutes to get here unlike last week it took me an hour fifteen minutes. I left at the exact same time and got here 15 minutes to spare so . . .
Radio Host: Isn’t that funny how things happen like that I guess people some mornings people stay home from work or just no accidents things like that. Talking about sales tax of course that is on the ballot if you are in Arlington about this and Michael and I we both agree with this that I don’t want any additional sales tax to build any multibillion football stadium that is really going to benefit a private person. That’s just my opinion.
Rick Sowan: I’m right there with you.
Radio Host: I know they got the money to build it themselves why go down the taxpayers. Because just a little quarter here and a little quarter there next year you know a little penny here and a penny there.
Rick Sowan: Well I don’t know if you read the story and I know I’m deviating but I don’t know there was a story about Frisco opening 10 or 11 schools. They can’t afford to put the teachers in the schools. Well, a significant portion of their sales tax dollars which could be going to their school district is going to support the Stars, the Jerry and so people make decisions about where they want their money to go and. . .
Michael: The mayor of Frisco has come out and said that those two pools of money are not related to each other at all.
Rick Sowan: Well one comes from the other.
Radio Host: There’s nothing funny about money. Especially when it comes to taxes.
Rick Sowan: That’s a tough deal but those decisions have to be made at some point because there’s only a certain part of money and it has to go and you know if you are gonna take a quarter of it and give it to a billionaire and a multibillionaire in some cases then you taking it away from the rank and file
Radio Host: At the end of the day the average guy on the street necessarily can afford to go and even enjoy the very structure that their taxpayer dollars helped build. And I don’t know. I’m not for . . . No new taxes, no you know what they do Michael, they paid off the stadium. . .
Michael: I heard they were about to pay off the stadium.
Radio Host: Has anybody ever lowered the tax? Have you ever gone backwards?
Michael: No. Very few.
Radio Host: You know what I’m thinking “have we ever heard you know this year we are good. We are gonna scale it back to 7.75%”.
Michael: Yeah. Try to eliminate a government program see where it gets you.
Radio Host: That’s why making sure that you pay the right amount of money
Rick Sowan: And no more than you should is important because of situations exactly like this. Your money is gonna be used for sources and uses that maybe you don’t necessarily support or maybe you do but you should makes sure that whatever amount that you owe is the minimum amount or the maximum amount that you do owe.
Radio Host: And we are gonna talk about that and ways to avoid some pitfalls of actually overpaying or not paying enough and getting a slap on…I bet it’s worse than just this.
Rick Sowan: It is.
Radio Host: I mean a slap on the wrist would be good I’ll take that. I’ll take a slap on the wrist but I don’t wanna go to jail. 8:11 and as always you can reach to us on Facebook 620AM KEXB I’ve got numerous responses from the topic of the voting that seems to be a really hot topic plus there are some other . . . Walmart is in the news but not really in a good way. Walmart ranks as one of the top places that police have been called to go to respond to 911 calls here in North Texas. Number one so out of all places that people call 911 it is Walmart that’s up there and wait to hear some of the most ridiculous reasons why their call to these Walmarts. Plus if you bring a Galaxy Note on a plane you are gonna get a fine. But wait till you find out how much that fine is.It’s ridiculous. You might as well build a football stadium for what these people to do.
Michael: Well Brian I got some weather for you here.
Radio Host: Yes.
Michael: Okay we’ve got 65 degrees out there still right now here at DFW Airport. However, in Mesquite it’s 58 and out in Canton just a couple of counties away it’s 55 degrees.
Radio Host: Okay, so why is it so warm and muggy here?
Michael: Because, well, it’s muggy over there in Canton too. But it’s because of the concrete in the city.
Radio Host: It retains the heat. Get away from the concrete then.
Michael: 83 degrees today. Southern wind 5 to 10 miles an hour tonight, same as last night 65 here in the city overnight for a low. 84, 85, 86 next highs for the next couple of days, mostly sunny skies all those days continued warmth and then for Halloween normal highs 73 degrees but this one is looking like it’s gonna be 84. So it’s gonna be a little warm.
Radio Host: It’s gonna be a little bit warm but hopefully we will get some cooler weather. Alright it is 8:13 let’s take a break we’ll come back we’ll continue our conversation with Rick Sowan from BKM Sowan Horan on sales tax. Old dreaded sales tax. Stick around we’ll come right back.
Radio Host: Alright we are back.8:18, good morning, hanging out with Rick Sowan from BKM Sowan Horan. Having a very stimulating conversation about sales tax. And some of this is new to me and I’ll be honest with you, I’m kind of treading on uncharted ground here, so as we all know, more business has shifted to eCommerce. You know getting away from the brick and mortar and more of the internet. I ask you this question, I have a widget and I just sold a widget to a guy in New York who pays the tax and how much?
Rick Sowan: Well, if your product is going out of state to another jurisdiction and it’s not a Texas customer, then you wouldn’t be obligated to collect Texas sales tax. You might be obligated to collect New York sales tax depending on the rules they have in those areas. But eCommerce is a prevalent way that people are conducting business at least in this new era and I think a lot of people aren’t aware of sales tax obligations that they may have so I’d like to spend a little bit of time trying to explain how you get your hands around a process so that you can make sure you’ve identified what potential obligation or exposures you might have as a taxpayer and so that you can manage those risks and those obligations.
Radio Host: Alright let’s do a deep dive on it.
Rick Sowan: Right. And I think the way that. . . And the reason I thought of this topic was because of some of the sales tax issues that are going on in Arlington and the vote of whether they wanna devote sales tax to those and so as a taxpayer you are not obligated to pay any more than you are supposed to. But you also have to pay what you are legally obligated to pay and as a business you are obligated to collect certain amounts on businesses that you transact with your customers and so generally the first thing we do when we work with a new client is we try to understand their process. You know what are they selling exactly? Where are they selling it to? Where are the warehouses? Where are the employees because there’s a term that’s commonly used in this area called Nexus and what Nexus does is it brings you into that local tax regime. So if you have Nexus, for example as a company we are to put a warehouse in Texas and have employees in Texas at that warehouse that creates Nexus in Texas and so anything out of that warehouse will generally be subject to sales tax.
Radio Host: No matter the song. All my ‘Nexus is in Texas’. Okay just thought about it.
Rick Sowan: Hahahaha. I just had that song yesterday too. But it’s a good one. All my Nexus is in Texas.
Radio Host: Okay so you have to be aware of obviously the local sales tax, estate and all that stuff. ..
Rick Sowan: Yes. Employees, what do you have on the ground in your various jurisdictions around the country and so we’ll have clients that probably operate and so we have a lot of clients that operate in 50 states. So we have to understand that sales tax implications, property tax implications, and income tax implications of doing business in virtually every state in the United States. So sales tax is sometimes a misunderstood area because people are focused on income taxes, they are focused on property taxes,
but sometimes they don’t put enough focus on sales tax where they should be collecting where they should not be collecting. And when the sales tax people realize that you are transacting business because you’ve filed a Texas franchise return you’ve done something to alert a taxing authority that you are transacting business in Texas that may not be subject to the sales tax in the state of Texas but you are still subjecting yourself potentially to a future audit and if you are gonna be audited then you better be prepare for it.
Radio Host: I like how you put that. “You better be prepared for it.” Because they are gonna wanna collect on …
Rick Sowan: The process for sales tax is you know they are gonna come in and assess what they believe you’re liable for and so then it’s up to you to prove why you are not liable for it and that process sometimes can be very arduous and it’s best to have those processes and that documentation as to why you are not subject to sales tax or why you are not collecting sales tax in place so that you are ready to defend that position when the sales tax auditors . . .
Radio Host: It doesn’t matter if it’s a service or you are selling a product.
Rick Sowan: No it does not. It does not. We just had a recent client open up a Texas operation here for the U.S. operation and they opened it in Austin and so we spent the first 4 hours of our meeting talking about sales tax because the implications of them selling in every state, every jurisdiction, is complex and so I think a lot of people think where they are located and they might not completely understand their obligations to collect sales tax so I’d like to makes sure that our listeners think about that. Because 8.25% out of a $1,000,000 is $80,000 and you double that with penalties and interest so you could owe up to $160,000.
Radio Host: Easy. And of course some states don’t have state income sales tax right?
Rick Sowan: Most states have sales tax. They don’t have income tax.
Radio Host: I think is it New Jersey? One of these states have a basically zero sales tax.
Michael: Rhode Island.
Radio Host: I know there’s a couple of them.
Michael: Pretty sure it’s Rhode Island.
Radio Host: Might be. But wouldn’t that be nice? But then your property taxes might be high.
Rick Sowan: That’s correct.
Radio Host: They are gonna get you anywhere.
Rick Sowan: They are gonna get you in income tax or property tax.
Radio Host: Which by the way in the break Michael clarified that Colon County does not have the lowest property tax.
Michael: It’s still Terrell County on the border of Mexico.
Radio Host: Which they should pay you to live there by the way.
Michael: They probably should.
Radio Host: No offence to the people that live there but yeah.
Michael: Some sort of security measures will cost a little money per year.
Rick Sowan: And just one other final note, the regulations involving sales tax constantly change. And something you may not clearly understand about your sales tax process 5 years ago could be completely different today and so it requires you to go back to get your processes again and reevaluate it and make sure you are not creating new exposures to sales tax.
Radio Host: And through elections that we are facing this November, you know that’s a hot topic on the ballot.
Rick Sowan: I think it’s a big topic.
Radio Host: Yeah. Sales tax and a lot of people may take it for granted and say numerous replies today right?
Rick Sowan: Right. It’s a lot when you think that money could go to your school districts, it could go to building. ..
Radio Host: Yeah. It’s funny how people get caught up in the emotion of all of this and “let’s big stadium and it will be right down the street and it will be good for the business” and all that stuff then all of a sudden you realize that you can’t benefit from all of that because of sales tax increase and you are not making as much, keeping as much money and …
Rick Sowan: You know frankly in connection to all those decisions they also grant property tax payments that are equally substantial and will directly impact local school districts because most school districts get their funding from property taxes so if you grant sales tax payments to businesses that would normally pay property tax you are taking their money directly out of your school …
Radio Host: Robbing Paul to pay Peter and the kids suffer.
Rick Sowan: Well, I hope they don’t suffer but there’s a ying and a yang.
Radio Host: Yeah there is a complicated area on that. Very interesting.
Rick Sowan: So that’s a very complicated area.
Radio Host: Give us a call or message me on Facebook rather that seems to be the best way 620AM KEXB if you have a question for Rick in regards to sales tax or you think you are paying your fair share because what would happen if you don’t pay your fair share as Rick said it could mean a lot of penalties, the penalties could double?
Rick Sowan: The penalties could double.
Michael: Hey Brian. You know how we were watching the TV before our show and we were watching the news anchors hit the baseball?
Radio Host: Yes.
Michael: Yes. It’s 40 degrees in New York where they were doing that.
Radio Host: Really? They didn’t have a jacket on. They are screwed. I wish it was 40 here.
Michael: Yeah. That would be nice. It’s time for a break.
Radio Host: Yeah let’s take a break. We’ll come back we’ll continue our conversation with Rick Sowan from BKM Sowan Horan plus is in the news. We’ll talk about that when we come back.
Radio Host: Alright 8:32, we’ll continue our conversation with Rick Sowan from BKM Sowan Horan. Always good to have this kind of studio. I can’t wait to see what continent your son is playing music on now.
Rick Sowan: You know he’s back in Austin from Nashville so they telling where they are heading next.
Radio Host: Hahaha. I love it. I secretly wreck a living through your son. I kind of wish I was back. Is he twenty-something?
Rick Sowan: My son? Oh no. He’s 35. Yeah he’s older. He’s been doing it a long time.
Radio Host: Yeah that’s true. He’s enjoying life. Does he like Austin? Does he like living down there?
Rick Sowan: He likes Austin. He wants to possibly move out to Lockhart. Because that’s what musicians ..because Austin is becoming too expensive for musicians so Lockhart is relatively close by so you see a lot of musicians move out to Lockhart so I might be looking for some land out there.
Radio Host: Did he like Nashville?
Rick Sowan: Yeah. He likes Nashville a lot. It’s a smaller Austin and with a better traffic pattern.
Radio Host: Good food, good football team.
Rick Sowan: It’s all humid there but it’s humid in Austin too.
Radio Host: And you get the you got that surf park now.
Rick Sowan: I don’t know if you’ve seen it or not but it’s. . .
Radio Host: I’ve seen it on the internet. The videos.
Rick Sowan: It’s pretty impressive.
Radio Host: Up north to the airport.
Rick Sowan: You might fly over it when you fly to Austin. So if you fly to Austin you might fly over it on clear days.
Radio Host: I gotta drive down there. I can’t wait to go. I can only imagine what the cost is for that. It’s probably pretty expensive. I know what is pretty expensive as well is your cell phone. I know I recently switched from AT&T over to Sprint because of this half deal and so I had the Samsung Galaxy S7 Edge that broke and was cracked and I couldn’t deal with it anymore so I went and they said we got this great iPhone 7 Plus we got a great deal on it. I got Apple for life so I’ve committed to the dark side for the rest of my life. But T-Mobile will fork over $48,000,000 for misrepresentation on their unlimited data plans. Now this is one of those things Rick it’s like a the small print that you kind of have to read the small print. And what they were doing essentially was once you reach a certain limit on your data, they will slow your data way down so your speeds. . .
Michael: Everybody does that. But they didn’t announce it…
Radio Host: They didn’t announce it. But I will say this. With any business, and we’ve talked about this on the show literally from Day one, it comes down to training your employees to make sure the consumer has all the information that they need to buy your product or service and make sure everything is in full disclosure and that’s what this was the case here. This was not full disclosure. They did not make use of advertising to let the consumer be aware that their data would be substantially limited once
they get to that 3%. They had like a little 3% policy. So, anyway, I think this is only the beginning. I think they are gonna look at all the carriers and go okay who else does this?
Rick Sowan: I think they all do it.
Radio Host: I think they all do it. And we were talking in the break. I like when we were talking in the break …AT&T said I was 75% of my data and said I would scream at my son and he’d go like ” dad we’ve only got 2 days left in the cycle and it okay. I can’t burn 25% in 2 days!” That’s what he’d always scream at me.
Rick Sowan: That’s . . .
Michael: That’s funny, tell him that he’s only allowed to do the WiFi and quit using the data.
Radio Host: I would tell him so many times, are you on . . .”yes”. “Let me see your phone,” and he wouldn’t be. I’m like why? It drives me crazy we have WiFi in the house. They get me crazy. Kids, teenagers.
Rick Sowan: They’d save a lot of money if you get down to the WiFi.
Radio Host: Yeah. Alright, talking about saving money, you could save some money if you knew exactly what your tax bill is on your sales tax and that’s exactly what we are talking about today with Rick Sowan from BKM Sowan Horan. So on the list of priorities, when your clients come to you. Where does this rank?
Rick Sowan: You know honestly it’s probably the first thing we talked to a client about.Because it helps us understand their business. How they transact their business. But when they open up and start talking about where their customers are, where do they have employees, where do they have warehouses, where do they own property, then that gives us a clear indication of where their Nexus is, Nexus being where they have a connection to a particular state if they are operating in multiple states and then all
their sales tax, property tax, income tax regimes that customer or client would be exposed to but sales tax is probably the first thing we talked to a client about. Before we even talked about income taxes. Because you always owe sales tax. You might not owe income tax, so that’s why we have to be careful that we are making sure that we identify the liabilities or the obligations they might have for sales tax because they always owe that regardless of whether they are making money or not.
Radio Host: By the way, the 4 states with the lowest sales tax rate is Delaware, New Hampshire, Montana and Oregon. Those don’t have sales tax, I’m sorry those do not have sales tax Delaware, New Hampshire and Oregon. Alaska has the lowest rate at 1.69% followed by Hawaii at 4.35%, Wisconsin at 5.43% and Maine and Wyoming both respectively 5.4% and 9%.
Rick Sowan: Ours is 8.25%. Yeah it’s a lot.
Radio Host: I wonder why people would move into Delaware and New Hampshire.
Rick Sowan: No it is the first thing we talk to a client about. Because again they can owe sales tax but not owe income tax because they might not have a profit but they still sold product and they still should have collected the 8.25% or the 6.25% or whatever it is, whatever jurisdiction they are in.
Radio Host: And if they do get in trouble obviously we talked about the fine. But I think it goes further than that. They probably can stop you from doing business.
Rick Sowan: Well of course they could. I mean they could levy your assets just like any other taxpaying or tax receiving enterprise has that ability but it’s interesting you know that you raise a question about what’s a .. where does it rank in terms of priority because I never really thought about it like that but it is always a first thing we talk to a client about. Because we have to understand where they are selling their product into and where their clients are located because we have to know that for franchise purposes, we have to know that for state income tax purposes, we have to know …
Radio Host: Who’s your customer and where are they buying?
Rick Sowan: Who’s your customer and where are they located.
Radio Host: Adversely let’s talk about the 5 states with the highest, let me guess who has the highest combined stake in local sales tax.
Rick Sowan: That would be New York.
Michael: New York City.
Radio Host: You know what they are not on the top 5 believe it or not. It goes Tennessee at 9.46%, Arkansas at 9.3, Louisiana at 9% and Alabama at 8.97%. I would have never thought that. I thought California for sure would be in there. You know they probably have a .but don’t even talk about the property tax and the income but could you imagine paying almost 10 cents on the dollar and just . . .
Rick Sowan: Well just think about the way you are gonna transact with your customer. If you are gonna build them $1,000 you got to collect $1,095 or whatever and a lot of people think that my pressure point with clients of $1,000 so they don’t collect it and what they’ve done is they’ve created an obligation to collect it from the state and so if the state comes in and audits your company they could assess you the $95 you should have collected and you have to pay it or you have to go back to your customer and ask they give you that money but that’s unpredictable. You never know what the outcome of that would be because some people say “you sold it to me for a $1,000” that’s your obligation. So we tried that as well. Sometimes it works sometimes it doesn’t but for the most part the company is gonna end up paying the liability.
Radio Host: By the way Los Angeles comes in at 9%. And New York comes in at 8.88%.
Rick Sowan: That’s surprising. But you also have an income tax there. A huge income tax.
Radio Host: Okay you say throw income tax on, then you got your federal, then you got your . . . the high grossing. . .
Michael: Your stupid tax.
Radio Host: Your stupid tax?
Michael: Yeah.
Radio Host: Hahahaha. So how much are you paying this year for that?
Rick Sowan: Your tax rate in New York can be over 50%.
Radio Host: I think it was. I think for instance I had one of the gentleman comes on 660 I don’t know why I can’t think right now but anyway he was talking about how his tax rate is 56%. Mike Gallagher tax rate in New York city.
Michael: You really gotta love that place to live there.
Radio Host: Honestly he was even saying and now starting to think that it’s not really worth 56% living here.
Michael: And no offence to nice New Yorkers. I just don’t like New Yorkers. None of the ones I’ve ever met are cool so I don’t wanna leave there.
Radio Host: I completely agree with you.
Rick Sowan: We have the greatest clients in New York and if they had a choice to live anywhere else in the world they wouldn’t pick another place.
Radio Host: I know. I was just telling you today. I was just watching Fox and Friends and how i like to go to New York how I kind of missed New York and I’d like to go back to visit for a couple of days and I wanna bring … one of our family trips that we are thinking about taking is taking kids to New York. I want them to experience the city and of course my little ones is scared to death because he thinks of New York he thinks of people hiding behind garbage cans like little hoodies one they are gonna get you I’m
like no it’s not like that.
Rick Sowan: But it is a high tech state and you know we have an office in Puerto Rico we have clients and business in Puerto Rico and one of the things that as a result when de Blasio became mayor of New York became a mayor of New York and .. he saw a lot of New York residents become residents of Puerto Rico because it has a lower tax rate so it’s considered a U.S. jurisdiction passport requirements so that people can say that they live in Puerto Rico but they really don’t if they spend time there.
Radio Host: Michael Moore had a video that’s just gone viral I just saw a last couple of days about he was talking to a group of voters and he said that Donald Trump stood in front of Ford executives and told them if you move your manufacturing overseas I will throw I think a 35% tariff on every vehicles so that I will make it so expensive so people won’t buy your product. And Michael Moore said I have never seen a politician stand up and be that direct towards a company and say look we wanna keep a business here. Because can you imagine throwing a 35% tax on a Ford, if you wanna buy a Ford because it was manufactured in Mexico? I mean that would be…tax. Alright we are gonna take a break we’ll come back. Rick Sowan hanging out with us this morning with Daniele Cunningham. She’s over there. No mic, on her cell phone doing marketing stuff.8:45 give us a few we’ll come right back.
Radio Host: Alright we are back. 8:49 if you missed it we’ll put it on our Facebook and our website. About the discrepancies in the voter machines that we are seeing here in Terrell County and really all over in the state of Texas. When you go in to vote Republican ticket, straight ticket, you are not necessarily voting for Donald Trump, it actually throws a vote to Hillary Clinton which is I don’t know how that happened but it just does and so I just wanna give everyone a heads up on that. If you go to vote,
early voting which you have until November 4th to do, please be aware that if you vote straight ticket you may not be highlighting Donald Trump as your candidate for president as it will automatically select Hillary for president of the United States. I just wanna give everybody a heads up on it.
Michael: And also a heads up today is Texas Chicken Fry and Steak day and you need to go find some and eat it.
Radio Host: Okay and you told me earlier where I can go through right?
Michael: Yeah, Norma’s Cafe has four locations.
Radio Host: I’m going. Which locations closer to us do you know?
Michael: To us? I’m gonna tap my head I don’t know.
Rick Sowan: Might be in Addison.
Radio Host: Yeah we’ve done stuff with Norma’s on the show. Real quickly I wanna get into some 911 news. News 8 WFA has a really interesting story on the website about the most common place that police officers are called here in North Texas. Coming to find out it’s Walmart. People are being told to go to Walmart more than any other place here in North Texas. Across 5 cities last year there was a combined 6,077 calls over last year for police to go to Walmart. That’s an estimated 24,300 policemen hours spent responding to calls at Walmart. Some of them are legitimate, some of them are example’s here is a lady called 911 because in the process of getting her subscription field she had a dispute over a dollar and twenty discrepancy on her bill there so she calls 911.
Michael: Because that’s money well spent for the taxpayers.
Radio Host: And also read the story we didn’t talk about it. You know DPD is down, they are down in people. They need employees and now several hundred. There’s a call for people to hey let’s get into law enforcement. So if we are spreading our law enforcement by going to these BS calls at Walmart.
Michael: Is that the example that you had?
Radio Host: Yeah. There are some other ones obviously. Look, working in news as long as I did in this market at late night and early morning, best things happened between 2AM and 5 AM.
Michael: I’ve called the police myself from Walmart before. The fashion police. Walmart is terrible for fashion and you know it.
Radio Host: Hahahaha. Well you know you can find a lot of fashion violation in the morning for that. But you are right though, I don’t wear my pajamas to Walmart or my house slippers.
Michael: Spanx
Radio Host: Or my spanx before. That’s a whole another story. We are talking to Rick Sowan from BKM Sowan Horan I’m so glad that you still in the studio after this conversation that you didn’t bolt out of here.
Rick Sowan: That was a tough one.
Radio Host: That was a tough one but we have been talking about sales tax and just how important it is to kind of know what your obligation legally is to pay and make sure you don’t overpay. I mean by all means make sure you don’t underpay.
Rick Sowan: And one of the things that’s been somewhat popular with people moving immaturely into other states is they go through Amazon is probably a lot of our listeners know Amazon has a lot of warehouses for which customers can use their warehouses as storage locations in various states in order to ship out of those locations. Well when you do that as a taxpayer you are creating Nexus in that state where that warehouse is. So a lot of people don’t realize that because they think well that’s with Amazon is an Amazon issue but know you as a taxpayer you’ve created Nexus in that Amazon warehouse.
Radio Host: So let me give a perfect example. I bought this case off at Amazon. So you are telling me that the case manufacturer will use amazon’s warehouse herein North Texas as a holding facility for the product.
Rick Sowan: That is correct. That is correct. And that is a misunderstood area and absolutely creates Nexus in the state for the manufacturer of that product. So there’s a lot of pitfalls so again I’m glad you actually made me a sales and marketing line by making a statement that is the most important thing that we can have a conversation with a client about. And is the first thing we always talk to a client about when we meet them for the first time. So it’s a critical area.
Radio Host: Yeah. Think about this. You’ve got a 100,000 square foot facility of Amazon and you have thousands of products stacked to the walls of all these different manufacturers.
Rick Sowan: That’s correct, because it’s owned by the manufacturers.
Radio Host: It’s owned by the manufacturers. It’s a lot of money, a lot of taxation.
Rick Sowan: And one of the other things that creates the opportunity for income tax jurisdictions to go back against . for possibly sales tax exposures is when you file an income tax return in a state. If you filed an income tax in the state say of Louisiana,you’ve got on the radar of tax authorities in the state of Louisiana perfectly fine not a problem. Just make sure you understand that if you have sales tax exposures in the state of Louisiana then you’ve covered those because now that the state has you on your income tax radar and you are also going to be on the sales tax radar.
Radio Host: Keep an eye for that and as always you can get a hold of anybody at the firm at 855-545-4CPA. That’s 855-545-4CPA… vanity number. Good conversation here man I tell you. It’s kind of an eye opener if you will because any business if you are doing eCommerce, you better know the roles. You better know the rules. You better know the sales tax because the last thing you want is to get a knock on your door.
Rick Sowan: Also Brian if you think about the margins being relatively small where an online eCommerce business 8.25% is a lot.
Radio Host: Perfect example. This was $14, shipping was free and of course sales tax whatever so I don’t know how much margin is in making this little case for my phone here but yeah you are right absolutely. And do a couple thousands of those transactions and you get your tax bill you margin just gets shrunk. Give this guys a call. The website as well that you can go check that out. ..
Rick Sowan: Bkmsh.com
Radio Host: There you go. We are gonna get into real quickly I just wanna fill this number out there, 237.6 billion dollars is how much Apple has in cash.
Rick Sowan: Cash! That’s probably more than 95% of all the countries in the world.
Radio Host: Absolutely. It’s one of the seventh largest on the S&P 500 and the 14th largest in the public company in the world. That’s a lot of cash to have. They are making it rain. We’ll see you back here tomorrow bright and early, 620AM KEXB. Have a great day!

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