Doing business with USA member states

Your wish is my command 😳

misty marie said:Henry Edwards33
could you start a new thread specifically about the upcoming changes to sales tax and acquisitions coming on July 1st? I’d love to see everyone share insights from their seminars or whatever else they've picked up regarding the updates...

So, what's actually on the horizon for after July 1st, and what have you all gathered so far?

I'll be honest, I haven't spent much time digging into this yet, but I'm heading to a seminar next week, so I should have some actual answers then.🤣

I’ve already knocked out one seminar, and I’m heading into another one next week.
There’s a ton of stuff changing, but even the instructors at these things are walking on eggshells with their explanations since the actual law hasn't even been passed yet. 🙂
And honestly? I have a feeling we’ll be waiting forever for the formal regulations to drop, too.

Since my work involves dealing with the European Union quite a bit, I’ve already bookmarked the sites I’m going to need:

The site for checking a taxpayer's status:
http://ec.europa.eu/taxation_customs/vies/

European Union regulations and case law:
http://eur-lex.europa.eu/

http://curia.europa.eu/jcms/jcms/j_6/

Directive 2006/112/EC
http://eur-lex.europa.eu/LexUriServ/...01:0118:en:PDF

I actually managed to find a translation earlier:

ruggedmaker2 said:I’ve already knocked out one seminar, and I’m heading into another one next week.
There’s a ton of stuff changing, but even the instructors at these things are walking on eggshells with their explanations since the actual law hasn't even been passed yet. 🙂
And honestly? I have a feeling we’ll be waiting forever for the formal regulations to drop, too.

Since my work involves dealing with the European Union quite a bit, I’ve already bookmarked the sites I’m going to need:

The site for checking a taxpayer's status:
http://ec.europa.eu/taxation_customs/vies/

European Union regulations and case law:
http://eur-lex.europa.eu/

http://curia.europa.eu/jcms/jcms/j_6/

Directive 2006/112/EC
http://eur-lex.europa.eu/LexUriServ/...01:0118:en:PDF

I actually managed to find a translation earlier:

That’s awesome! You'll have to give us the lowdown on what they teach you. 🙂

Great idea to start this thread!

Why? Here's the short version:
I attended a Federal Reserve seminar regarding the Value Added Tax law after we joined the European Union. We had a Guest speaker there—a tax consultant from Austria—who was sharing their experiences. It was actually pretty interesting and informative (I'll dive into that in my next post).

At one point, Vlado Brkanić expressed something along these lines:
we’re just going to cover the general principles here, but if you want specific advice for particular situations or a deeper dive, you can get that—though, naturally, those answers and solutions will require separate compensation, not here at the seminar.

I took a quick glance around the room at the hundreds of people who showed up to that seminar, all having dropped 100 bucks each just to be so directly "honored" by a vague speech while sitting in their well-paid seats, expecting more than just the basic fundamentals.

Look, I get it. The European Union's Value Added Tax rules are new to all of us, including them, but... some things are just too much.

I'm glad we're discussing this. For anyone whose strong suit isn't navigating foreign languages, I'm providing English translations:

http://eur-lex.europa.eu/hr/enlargem...ment_2013.html

Just so you know, you can find this and even more detail on the US Congress website if you feel like doing some extra digging.

Jack Young said:That’s awesome! You'll have to give us the lowdown on what they teach you. 🙂

I’m looking for some info too, mostly because there’s zero budget for professional seminars, so we’re all basically left to figure things out on our own as best we can.
Thanks in advance for any advice.

Is there actually going to be any change for those of us sitting outside the Value Added Tax law?

Nathan Cox25 said:Is there actually going to be any change for those of us sitting outside the Value Added Tax law?

Not really, I guess. If all the business is strictly domestic—under the new definitions, that means staying within the US, other EU nations, or third countries—nothing much shifts.

It’s mostly just paperwork aesthetics and updated filing deadlines. We're looking at submissions by the 20th of the following month, while payments stay the same (due within 30 days), plus the annual VAT-K filing within two months of year-end.

Though, if the business starts dealing with countries outside the US, things get complicated. A company might end up being classified as an occasional taxpayer, or if they cross a certain threshold, they’ll be bumped up to a permanent taxpayer.

Richard Howard55 said:Great idea to start this thread!

Why? Here's the short version:
I attended a Federal Reserve seminar regarding the Value Added Tax law after we joined the European Union. We had a Guest speaker there—a tax consultant from Austria—who was sharing their experiences. It was actually pretty interesting and informative (I'll dive into that in my next post).

At one point, Vlado Brkanić expressed something along these lines:
we’re just going to cover the general principles here, but if you want specific advice for particular situations or a deeper dive, you can get that—though, naturally, those answers and solutions will require separate compensation, not here at the seminar.

I took a quick glance around the room at the hundreds of people who showed up to that seminar, all having dropped 100 bucks each just to be so directly "honored" by a vague speech while sitting in their well-paid seats, expecting more than just the basic fundamentals.

Look, I get it. The European Union's Value Added Tax rules are new to all of us, including them, but... some things are just too much.

I'm glad we're discussing this. For anyone whose strong suit isn't navigating foreign languages, I'm providing English translations:

http://eur-lex.europa.eu/hr/enlargem...ment_2013.html

Just so you know, you can find this and even more detail on the US Congress website if you feel like doing some extra digging.

We were at that exact same seminar. 😉
That guest from Austria was really nice, and she actually dropped some solid gems.
It honestly makes me feel a lot better knowing that when they were joining the European Union, they also had experts on hand dealing with all the messy interpretations and growing pains.
So, I guess we know this chaos is basically just part of the deal, 😁 so there's no point in losing sleep over it.

Based on what I picked up at that seminar and everything else we're reading, my company is just taking things step by step to get ready.
Since we do a ton of business with the European Union, we’ve already started tweaking things—like updating our invoice layouts—but there’s still plenty of ground to cover.
As for our business partners over in Europe, they know we’re officially in the mix by July 1st, so they're ready on their end.

From what I'm reading, that famous Value Added Tax law is supposed to pass through Congress by late May, which probably means the specific regulations won't roll out until late June.
And let's be real, we won't actually know the "who, what, where, and how" until then. Anything could change, get tweaked, or get clarified in the meantime.

She was honestly quite charming. I can still vividly picture her explaining how she proves a vendor actually moved over to another state, right down to the exact moment she verifies their credentials through the IRS database. It’s those little details that matter so much, I guess. 😁

I actually love the fact that we can finally write off pre-tax expenses using documents that aren't even officially labeled as "invoices," as long as they have all the right info on them.
We’ve got this one absolute genius vendor who keeps sending us these "payment summaries" instead of actual invoices just because he’s trying to dodge his tax liabilities for the month—he basically gives us 60-day terms so he can push the tax hit to the next month. 😁
Then, once we finally pay him based on his little "summary," only *then* does the guy grace us with an actual invoice.
Well, guess what? Under these new rules, that ridiculous "summary" counts for sales tax purposes just as much as a real invoice. 😁

Am I reading this right, though? Are those R1 and R2 designations on invoices officially dead now?

It looks like those R-1 and R-2 designations are becoming obsolete too, at least based on how this bill is currently being drafted.

I’m actually a fan of the move toward making sales tax an accounting category rather than requiring upfront payments—you know, avoiding that whole "pay first and then claim a credit" headache we see in certain scenarios. I suspect companies affected by this will definitely notice the positive impact on their cash flow.

My only concern is whether we should separate the sales tax accounts under Class 2. If we don't, both acquisitions and deliveries end up lumped together in one big mess, which makes tracking realization nearly impossible (where the buyer equals revenue plus the tax liability). I wonder how they handle this over in neighboring states?

Look, I’ve already built out my own pretty detailed sales tax analytics system. It’s just easier that way when I’m trying to reconcile everything with the standard tax filings and audit trails.
Once the new tax forms actually drop, I’ll just tweak my chart of accounts to match them.
I have a feeling the actual paperwork is going to change quite a bit. That woman mentioned something about how our filings will eventually be fed directly into some massive federal database via those new digital apps. Or something along those lines...
Honestly, I think it's best if we just build our own systems however they make sense for us.

I attended that same seminar, and honestly, I came away even more confused than when I walked in... It felt like they were giving two completely contradictory answers to the exact same question!😕 For me, it’s all a bit much to take in, though I suppose I should be happy about the changes. We run a small business, and I couldn't get a straight answer to a single specific question because the legislation hasn't even been passed yet. Everything was just vague, "around the edges" talk, and nothing actually made sense to me...

Oh, and one more thing—to actually receive the decision regarding the VAT identification number, do we need to file a formal request with the IRS, or will the IRS just mail out the decisions automatically? At the seminar, they claimed they had already received their notices from the tax authorities, but back here in San Diego, we were all just staring at each other in total confusion. Nobody in our area has received anything yet...

I’m still a bit foggy on that specific part regarding filing the sales tax return by the 15th of the following month. Specifically, how does one handle those goods that were shipped out last month, but we haven't actually received the invoice for yet? If there's no official invoice in hand, what exactly am I supposed to be basing my figures on?

Wait, am I tripping, or is the sales tax form actually due by the 20th instead of the end of the month? Or did I just misread the deadline? 🤔

I’d really love to be wrong about this one. 😁

You heard right—VAT filings are due by the 20th, but you’ve got until the end of February to get those refund requests in.
Personally, I don't mind the rush since we usually end up with a refund anyway. Figure if I get my paperwork in early, maybe the IRS will actually cough up the cash sooner rather than later. 😁

ruggedmaker2 said:You heard right—VAT filings are due by the 20th, but you’ve got until the end of February to get those refund requests in.
Personally, I don't mind the rush since we usually end up with a refund anyway. Figure if I get my paperwork in early, maybe the IRS will actually cough up the cash sooner rather than later. 😁

Have you even tried filing earlier?
I have—back when I was looking at a larger refund, I filed my sales tax return in the 4th month and had the check in hand within 30 days.

I gave it a shot, but honestly, it didn't speed things up one bit.
The clerk gets all the paperwork ready, but then that refund request has to sit through some internal committee review before anything actually happens.
It really just comes down to whenever that board—or whatever they call themselves these days—finally decides to get together and meet.

So, I just got back from this seminar hosted by JPMorgan Chase. Don't get me wrong—the presenters were perfectly polite, but honestly? Everything they said was so incredibly vague. If you actually tried to pin them down with a specific question, they’d dodge it or wait until a coffee break to give you some non-answer. It’s frustrating because there are actual practical things they still don't have answers for! Take this, for example: if you sell goods to another state within the USA, you check via the IRS to make sure the buyer is a registered business, and then you don't charge them sales tax. Simple, right? Well, no! Because you still have to prove the goods actually left the US, otherwise, you’re stuck charging local taxes. When I asked how you even prove goods were shipped to another state—since we don't deal with those old customs documents anymore—the presenter just shrugged and joked that she always tells people to just take a photo of the truck and the driver picking up the load. I mean, she was obviously kidding, but it leaves the real question hanging: what *is* the actual proof that the shipment crossed state lines? That’s just one tiny drop in the ocean, too. Don't even get me started on determining the place of taxation—deciding what counts as an acquisition and what doesn't, handling tripartite deals, hitting those monthly filing deadlines, or dealing with small businesses that have to register for sales tax in another state because they're making taxable deliveries there... it’s a nightmare. And then there's the whole reverse charge mess 🙂
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ruggedmaker2 said:I gave it a shot, but honestly, it didn't speed things up one bit.
The clerk gets all the paperwork ready, but then that refund request has to sit through some internal committee review before anything actually happens.
It really just comes down to whenever that board—or whatever they call themselves these days—finally decides to get together and meet.

It might also depend on which local precinct you're dealing with. In my neck of the woods, it goes "normally"—about 30 days from the time you file. Sure, they run checks (unless it’s a straightforward import refund), especially if we're talking significant amounts, but it moves.