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May 23, 2022

Jason Parr On What You Need To Know About State Sales Tax But Probably Don't (#127)

Jason Parr On What You Need To Know About State Sales Tax But Probably Don't (#127)

“The most costly mistake you can make when it comes to sales tax is ignoring the current situation or marketplace.” - Jason Parr

Jason Parr has dedicated his career to helping companies find peace of mind when it comes to state and local tax (SALT), especially sales tax. He has been with Peisner Johnson for 25 years. He currently serves as its President and CEO and has deep experience with all services offered by Peisner Johnson. Having "grown-up" in the SALT arena, he has gained expertise on how to navigate the sales tax issues and processes that keep owners, tax professionals, accountants, and CPAs up at night. Peisner Johnson focuses its efforts on helping companies manage sales tax compliance, including sales tax return services, nexus studies/risk assessments, and getting registered properly, as well as, due diligence, audit defense, research, automation, and tax recovery services. Parr lives in Dallas, and he and his wife of 31 years have 6 married children and 9 grandchildren, and 2 on the way. He enjoys golf, racquetball, ultimate frisbee, and a new favorite - pickleball.

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Your liquidity event is the most important financial transaction of your life. You have one chance to get it right, and you better make it count. 

But unfortunately, up to 90% of liquidity events fail. Think about all that time, money and effort wasted. Of the "successful" liquidity events, most business owners leave 50% to over 100% of their deal value in the buyer's pocket and don't even know it.

Our founders said "no" to a 7-figure offer and "yes" to a 9-figure offer less than two years later. 

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Enjoy the interview!


[00:00:00] Jeffrey Feldberg: Welcome to the Sell My Business Podcast. I'm your host Jeffrey Feldberg. 

This podcast is brought to you by Deep Wealth and the 90-day Deep Wealth Experience. 

Your liquidity event is the largest and most important financial transaction of your life. 

But unfortunately, up to 90% of liquidity events fail. Think about all that time, money and effort wasted. Of the "successful" liquidity events, most business owners leave anywhere from 50% to over 100% of their deal value in the buyer's pocket and don't even know it.

I should know. I said no to a seven-figure offer and yes, to mastering the art and science of a liquidity event. Two years later, I said yes to a different buyer with a nine-figure offer. 

Are you thinking about an exit or liquidity event? 

If you believe that you either don't have the time or you'll prepare closer to your liquidity event, think again. 

Don't become a statistic and make the fatal mistake of believing that the skills that built your business are the same ones for your liquidity event. 

After all, how can you master something you've never done before? 

Let the 90-day Deep Wealth Experience and our nine-step roadmap of preparation help you capture the maximum value for your liquidity event. 

At the end of this episode, take a moment to hear from business owners, just like you, who went through the Deep Wealth Experience. 

 Jason Parr has dedicated his career to helping companies find peace of mind when it comes to State and local tax, especially sales tax. He has been with Peisner Johnson for 25 years and currently serves as its president and CEO with his deep experience with all services offered by Peisner Johnson. 

Having grown up in the State and local tax arena, he has gained expertise on how to navigate the sales tax issues and processes that keep owners, tax professionals, accountants, and CPAs up at night. Peisner Johnson focuses its efforts on helping companies manage sales, tax compliance, including sales tax return services, Nexus studies, and risk assessments, and getting registered promptly as well as due diligence, audit defense research automation, and tax recovery services. 

Jason lives in Dallas and he and his wife of 31 years have six married children and nine grandchildren and two on the way. He enjoys racquetball, ultimate Frisbee, and a new favorite pickleball 

Welcome to The Sell My Business Podcast. So delighted to have you with us and for all, you business owners out there, particularly those that are thinking of a liquidity event, ignorance is not bliss when it comes to a liquidity event and today's guest he's going to reveal all kinds of interesting things that you better know and really take care of today as opposed to during a liquidity event. But let me not get ahead of myself, Jason, welcome to The Sell My Business Podcast.

It's such a delight and a pleasure to have you with us. Jason, there's always a story behind the story. What's your story? What got you to where you are today? 

[00:03:28] Jason Parr: Hey, Jeffrey. Thank you so much. It's a pleasure to be here with you as well. So I'm just starting out as a pool service guy. In college servicing pulls, trying to get my accounting degree and I get connected with some great guys. These are the founding partners of Peisner Johnson, and that's really where my story started with State and Local Tax.

When you think of State and local tax, you're thinking of sales tax, property tax, State income tax. Anything that might be levied at the State level. And so I got in contact with these guys and they had been running this firm for about five years and I was hired on as a staff assistant, still going to school.

And I came to love State and Local Tax. And essentially I like to tell people that I grew up in the firm and now 25 years later, this is my 26 years at the firm I'm the president and CEO. So I've learned, I think everything you can imagine as it relates to advisory services, consulting what happens with State and local tax?

How to strategize around it. And then we've built a compliance practice around the requirements that companies have to be registered properly and to file their sales and use tax returns on a monthly or quarterly basis. And so that's just grown into that. And Jerry Peisner one of our original founders retired back in 2015 and the other founding partner, Andy Johnson is actually on sabbatical for three years doing some great work down in Costa Rica. And I have been the President and CEO for about four years now. And so State and local tax is my world, we call ourselves the sales tax people because we have focused so much in the realm of sales tax in the last few years due to Wayfair versus South Dakota, some might be familiar with that Supreme Court case, but that's really created a lot of inquiry in the marketplace when it comes to sales tax.

[00:05:18] Jeffrey Feldberg: Wow, Jason that's just an incredible story. How you came in really at an entry-level and now you're running the company and you've been there for 25 years. I mean, you read about this stuff and you see it in the movies, but to actually have someone in person who's done that. So before we jump into all the sales tax and the cases and the regulations and all those other kinds of things, what was that like for you coming in I presume it into a company and an area of specialty that you really were just beginning to learn. And here you are today doing what you're doing. What would be some lessons learned that you can share with our listeners on that?

[00:05:55] Jason Parr: That is a great question. You learn a lot of them over the years, obviously, as you grow into different positions and I've probably held every position that we quote out there. But one of the things you learn is that a business and running the businesses is truly all about relationship. We have a couple of sayings in the firm.

We over me, it's this idea that together you're stronger than yourself as you approach problems or difficulties or challenges. And that can be in professional life or personal life. It can most definitely be in the State and local tax world. The other one is collaboration builds confidence.

 We evangelize quite a bit that we want to talk to everybody about this because it's important for helping people establish what they do well in the business and fulfill that and do that and not have to worry about some of the administrative hassles that come with dealing with sales and use tax State and local tax across the board.

Just by way of example for me I know sales tax, I know property tax, I know State income tax. I know how to do it inside and out. I know how to help companies navigate that. I know how to help companies mitigate the cost associated with getting everything right, or getting set up and getting that straight.

And I served as the COO for several years before I was named President and CEO. And so I know how to manage people and projects and State in local tax, but I really didn't know how to run a business, so to speak. And what I mean by that is I have an accounting degree, but I've rarely used any accounting in these last 25 years.

And so even though I'm an accountant, you would not hire me as your Controller or your CFO. One of the things that I've learned is you get people that are great in those areas. I could spend half my time or more managing those aspects of a firm. And I know I would do half as good and I wouldn't be applying myself to the most valuable aspect of the business.

And so you get really great people around you to manage the things that are really important and finances are important. And then the other thing I learned as a CEO is you wear several hats, but the most important hat I think is CRO. Until you can find someone that is a perfect CRO for your culture and your goals and your efforts and what you're trying to achieve, you really have to wear that hat, the branding, the messaging, what you're trying to achieve, and what you're trying to help people achieve has to come from that aspect.

So in that regard, the last thing I would say that I've learned is when you do find somebody that you put in a position of responsibility you have to train and orient endlessly, but you also have to have trust and confidence in their efforts. If you undermine those efforts by working directly with individuals that you've put them responsible for, you really begin to destroy trust throughout the whole organization.

So there's just a couple of things from a philosophical standpoint and a practical standpoint, I suppose, that I've learned as I've been the CEO of the last four years, what it really takes to run a business.

[00:09:01] Jeffrey Feldberg: Well, Jason, you are absolutely spot on. And for all of our listeners out there, I really hope you're listening carefully to what Jason was saying because Jason, in the 90-day, Deep Wealth Experience, step number two, X-Factors. You're doing one of the X-Factors for your business.

And that for us is, does the business run without you?

And you said to yourself, hey, I could be doing all of these other things, but half as effectively. So let me put in people that are just better than me. It'll be better for the business, better for the clients. And so for all you listeners out there, all of our business owners, can you say what Jason just said, or is it well, you know, the business really doesn't run without me?

So you heard it from a professional take the lead that Jason has taken and take it from him of have the business run without you. And Jason, before we get down to some of the interesting things that you're doing on the sales tax side and the tax side in general, can you talk to us about your culture?

Because some of the things that you're saying, just with the transparency that you're having, the responsibility, the training, the commitment I would suspect that you have a rich and vibrant culture where people get what the mission is and they enjoy coming in.

And it's not the same blank, different day kind of thing that typically goes on out there. So what's your secret sauce where your culture that you can share with us?

[00:10:17] Jason Parr: Well, it may sound a little bit cheesy, I really believe, and this is my own personal and professional belief that when you help other people, you help yourself. So we really have this idea that we want to help one another achieve. One of the greatest aspects or enjoyments that I have in running a business is providing opportunity for professional growth, professional, and personal growth.

And so helping other people and really communicating it is key in our culture. And what I mean by that is just what I said earlier, confidence or collaboration builds confidence. And we say that a lot. We mean that it's on the wall. We expect people to ask questions the most successful individuals in our firm are individuals who don't mind asking questions.

I'm not one to say, there's no dumb questions. There clearly can be dumb questions, but that's okay. The more questions, the better as far as I'm concerned, because when two people collaborate, I'll just give you an example. Even as CEO, I collaborate with my executive team on almost every decision, I don't just go it alone and say, this is what we're doing, and kind of mandate it down the line. Now we don't just take everybody's input and vote for it and then go in any particular direction either. But when we're really considering what might be best for a client might be best for a partner, a CPA or accounting firm, what might be best for a particular contractor or employee, or even our firm overall. I want to talk to the people that I've made responsible to get their input, to get their thoughts and essentially council together, because you can feel really confident about a decision that you're going to make and the direction that you're going to go, and you can really go it alone. And you can have a lot of success in that.

But when you talk to somebody else that you respect and trust or admire could be a mentor or a peer or colleague, and you just get the nod to someone who's saying, yeah, I see where you're coming from. I think that's pretty good. Just that little bit of nodding gives you a lot of confidence to move forward.

You don't move forward with any intrepidation when you collaborate. So collaboration within our responsibilities with one another, within the work, with everything that we do is a big part of our culture. And I don't want to give you the idea that means that everything that everyone has to say necessarily percolates or is moved on.

But within our departments, within our executive leadership, within management, and within peer groups, we push and encourage and constantly discuss the idea that collaborating with someone else really will build confidence in the decision that you're going to make.

[00:12:53] Jeffrey Feldberg: Well, that's terrific. And again what is just really screaming out as you're talking, Jason and for listeners, it's so important in step number six of the 9-step roadmap. When you're looking to select your advisors, really what you're hearing from Jason with his culture and that transparency and that responsibility.

And it's really a team effort. And as the saying goes, when the team works the dream works and that's what you have with Jason and company. So Jason, let's go back to the beginning here for just a moment because there was an important ruling that forever changed the face of business. And for some of our listeners who maybe aren't aware of that, walk us through what happened and the implications of that?

[00:13:35] Jason Parr: In July of 2018, there was a Supreme court case that essentially worked up through the State of South Dakota. And it was Wayfair, which is an e-commerce furniture company. And essentially South Dakota was saying, you have no physical presence in our State, but because you sell into our State through electronic means, we believe that we can impose our sales tax law upon you and require you to collect tax on the things that are imported into our State or sent to customers within our State.

Well, In the world of sales tax, it's probably been 50 years since we had a Supreme court case and the real function of that result back then was you had to have some minimal physical presence within a State for them to be able to impose their sales tax law on you and require you to collect tax on sales that you made into that State.

And what happened with South Dakota is they won at the Supreme court level. And one of the reasons they won is because there was a threshold. It's not imposed on everybody who has goods coming into the State. But from our perspective is a very low threshold. It's a hundred thousand dollars in gross sales.

If you import a hundred thousand in gross sales into the State of South Dakota then you now are responsible to register, collect tax on those sales, and remit that tax. Well in the last three years, every state that imposes a sales tax and DC have passed legislation almost mirroring South Dakota's Supreme court said it was good, then it'll be good for every State.

Then you don't run into lawsuits. Some of the bigger states like California, Texas, New York, their threshold is $500,000, but most States the threshold is a hundred thousand. So it flipped the landscape. When I was worried about sales tax as a brick and mortar company I was only worrying about where I was located.

So I only collected sales tax in maybe one State, two States, maybe up to five States. I didn't worry about States where I shipped goods. Now, where it was about where you were located now, it's about where your customers are located and that has huge ramifications on the marketplace. One of the things that I say is every company doing business in the US and I mean, this 100% of every company probably needs to register in at least one more State.

But more than likely they need to register in several more States if they're not already registered in all States. And so we see everything from needing to register in 5 to 10 more States up to needing to register in every State. As we break down State by State, what accompanies sales tax responsibility is in those States.

[00:16:16] Jeffrey Feldberg: Wow. Wow. Just think of the ramifications and just imagine for a moment we're in a liquidity event and sales tax has never been an issue before. We didn't do our preparation like we should have ahead of time. We didn't speak to Jason, but the future buyer who is smart and sophisticated comes in and says, hey, you have an issue here.

And depending on the severity, I'm either going to walk away from the deal. So all that time and money is wasted. Or I know I said, I would pay you X dollars. I'm going to penalize that. I'm going to give a 40% discount because I have all of these back taxes and penalties and interests and everything else that's accumulated over the years from what you're doing.

So, Jason, this is a game-changer. Talk to us about how does that apply? Is this just for physical goods or is it services as well? Or what's the differentiator here? If any. 

[00:17:05] Jason Parr: Yeah. Great question. And just to echo what you just said from a due diligence perspective in the process of liquidation event. If the buyer comes in and identifies that you have potential exposure, we try never to use the word exposure. We say you might have a sales tax responsibility. So let's figure out what that is.

But if they determine you might have a liability, then they and their consultants are likely going to overstate that potential liability and want to set up some sort of an escrow account, which effectively reduces the value of the sale in the first place because you've got to put up some cash to manage these liabilities going forward from a selling standpoint, our greatest success is when we find someone who might have a seven-figure exposure across multiple States, and we can reduce that.

Mitigate the out-of-pocket taxes, penalties, and interests that might be associated with getting the company compliant or registered correctly. And we really cheer internally when we can help a seven-figure liability, turn into a four or five-figure liability. When you think of an escrow account that is $5 million versus paying $50,000, it's a big deal.

And there's ways out there to do that. And we can talk a lot about that, but just to get back to your question, every company doing business in the US. And this is a big deal for owners to recognize, needs to understand if they have a sales tax responsibility, a responsibility to collect tax in a particular State on goods and services. Historically tangible goods have always been taxable unless there's some sort of exemption. Think of wholesalers or resell, or maybe you use tangible property in a way that you, as the purchaser could be exempt from the tax, but that's something that they would need to give you a piece of paper to prove that there's no tax due.

So tangible goods, typically taxable, services historically not taxable, but more and more States over the last 10 years have been a enumerating services that are taxable. One of the things that kind of slip by in the world today is software as a service. Platform as a service, infrastructure as a service. Several software-related service organizations that believe that they're just not taxable because no tangible property is supplied.

There's a dozen or more States that now tax software as a service, they may tax it as software, or they may tax it as data processing service or an information service, whatever they can get within their umbrella of definition of taxable service, they'll pull those things in. New York being a good example that if you're an IT service company, that's providing network monitoring services, you're out of state, maybe you're in Georgia and you're monitoring networks within New York electronically. New York calls that a security service. Security services have always been taxable. You hire a security guard, you actually pay tax on that service.

When they define network monitoring services as a security service. Now, all of a sudden you're an IT company who's not being collecting tax. You're not registered. And you could have a seven-figure liability just in one State for the last few years. And so the other one would be digital goods.

Digital goods have become a big deal in the last several years. I like to say States are usually about 10 years behind technology and modernization. And so they eventually find a way to either legislate or define what you might be doing within something that's taxable in their States. So yes, products, goods, services, intangibles, digital goods.

You really need to understand State by State what your situation is there. And we simplify it. Just three questions that every company needs to answer for themselves. 

Number one, do I have nexus? Big question? I could have physical nexus or economic nexus, but I need to look State by State and determine do I have nexus because if you have nexus, then the number two question is really important.

Number two is what I sell that goes to your question. What is taxable? Every state has its own sales tax legislation. Its own sales tax law. It administers its own law. And so one good that might be taxable in one state might not be taxable in another supplements are a good example. And there's a lot of other examples because supplements sold in one State could be taxable at the full rate.

In one State it could be at a reduced rate. And in another State, there could be no tax on supplements. You need to know State by State. Number one, do I have nexus, number two is what I sell taxable in that State. If that's the case, then the third question is I need to know how do I sell my goods and services. If you sell from brick and mortar and ship your goods if you sell through your own website that's one way to do it.

If you sell on a marketplace facilitator platform, Amazon, Etsy, Walmart, whatever the case may be, depending on the way you sell your goods through the platform or channel that you sell it determines whether you're the responsible party for collecting the tax, or if there's a third party that might be the responsible party for collecting tax.

So just to give you an example, every State that has passed an economic nexus legislation has also passed what they call marketplace facilitator legislation, which means if it's sold through Amazon or Walmart or Etsy, they're the responsible party to collect the tax. So you might be a seller that sells on Amazon.

You sell on Etsy, you sell on Walmart, but you also sell through your website and use Shopify to be your merchant account. On those platforms, you're not the responsible party. You have nexus, what you sell is taxable, but you're not the responsible party for collecting. When you're selling through your own website, you have nexus.

What you sell is taxable. You are the responsible party for collecting that tax. And so what we do is we look at each of those questions and we talk through your business and give you an understanding. We call it peace of mind. We try to bring peace of mind to others regarding sales tax. It's right on our front page of our website.

When somebody asks what I do, you know, the elevator pitch we bring peace of mind to companies regarding sales tax. That's how I present what we do as a firm. When somebody is just asking and passing you know, what do you do? I don't say I'm a CEO or I run an accounting firm. We bring peace of mind to companies in regards to sales tax.

And the way we do that, you would think, okay how do I get answers to these three questions? How do I figure out what my situation is? We have what I consider to be a cheesy named free consultation. If I told you, hey, listen, we have this free consultation. I want you to come on.

And it's like a discovery call where we learn about you and your business. You learn a little bit about us and we help you gain confidence to bring peace of mind on next steps and decisions that you need to make. When I say free consultation, your automatic response is oh, hard sell. So maybe I don't want to get on that free consultation, but the name of our free consultation is called a What's Next Call.

Everybody we talked to and we talked to multiple people on a daily basis when they hear these three questions when they gain some understanding about their situation in relation to those three questions across the US almost every time they say okay, what do I do next? So we call it a What's Next Call.

It is a free consultation. It's a free call. And we back what we say about helping other people. You help yourself in this regard. If you come to that call and we walked through your situation and you don't really need what we offer or there's really no reason for you to even get registered, or there's no reason to engage.

If you walk away from that call more confident about next steps and you have some peace of mind, owners, sometimes don't sleep well at night. So if you gain some peace of mind by having that conversation and we don't engage and work together, we are perfectly happy. Truly perfectly happy because someone else is walking around with a little more confidence, sleeping better at night, having some peace of mind when it comes to this issue. And that makes us happy.

[00:25:08] Jeffrey Feldberg: I love that. And for our listeners out there, I'm going to put a pause for just a moment on what Jason spoke to us about in regards to sales tax. And I want to ask you a question because Jason, you so eloquently walked us through what you do and how that works. And for our listeners out there, as you know, with a 9-step roadmap, step number three is all about the future buyer, mastering the art of thinking like a buyer.

And part of that is you're creating a narrative. Well for all of our listeners, guess what, you're the future buyer for Jason either you're going to buy his services or you're not. How did you feel when Jason was going through his narrative and some of the descriptions that he gave in terms of what he does? You can remember Jason as, hey, he's a peace of mind sales tax guy.

In a heartbeat, you're going to remember that. Well, yeah, it's this no obligation. It's a, What's Next kind of call. And so as Jason went through that and Jason, thank you for that. It's a wonderful example as business owners, how we need to think like our buyers.

So, Jason, a thumbs up for that. And for our listeners, you just heard a terrific example, a terrific narrative. So Jason walks us through now, big picture-wise, you gave us a sense of how that works and what that looks like. Let's go into a little bit more detail.

So a business owner approaches you, they do the What Next call. And as it turns out, yeah, maybe they have some potential responsibility as you call it. So they now engage your company and you're going to go in and help that business. So what does that look like from a timing perspective and what are you needing in terms of resources or access for the company and the records. 

[00:26:51] Jason Parr: Really great questions, before I share that, let me just say this, thank you for the kudos on the way we operate. It's a huge part of our culture and we push it strongly. Every day, if there's someone that you can help your psyche will improve it really will be better. And we never lead by fear, but with one caveat, I will say this we don't like to say, oh man, you're in deep trouble.

It's gonna look really bad, you've got huge problems. You don't lead that way, that doesn't offer any peace of mind, but I will say this and Paul Johnson, our VP of operations, he says this all the time, the most costly mistake you can make when it comes to sales tax is ignoring the current situation or marketplace.

So number one, we say just simply, don't ignore it. If you think it's going to be bad maybe it won't be as bad as you think. Let's just talk through that. And because of my own experience, I can almost promise that you'll feel better after we talk. Then when you came into that situation and learned about what your potential responsibility would be.

So if we have a company that we've talked with and based on what we understand about their company. They could likely have a responsibility to collect and remit tax. We do what's called a what's next risk analysis. This risk analysis is looking at their sales by State for the last few years it could be the last year, it could be the last few years.

And what we're doing is we're going through and we're showing what the threshold is in each State. We're showing the effective date that law was passed. And we're essentially trying to identify when was nexus triggered based on your company's activities in that State. And so it could be physical activities or economic activities. 

One way or the other we're going to identify in each State when was nexus triggered and what sells would have been subject to a collection of tax. So built into this risk analysis is not only identifying when nexus was triggered, but it's also looking at taxable sales within those gross sales. If all your sales are taxable, you sell tangible items online.

Then we're looking at gross sales, but factored into this is some assistance and understanding and answering question number two, which is, is what I sell taxable? So if we identify you have nexus and then we identify you have some taxable sales associated in those sales from that date forward, then we start talking about recommendations or remedies to be able to get compliant with the States so that you don't have to worry anymore. Not getting compliant leaves the door open for as long as the law has been in place or for as long as you've been doing business in the State. As soon as you determine to get compliant. Those time periods start falling off, though, by what we call a statute of limitations. A State's not held to the limit they can go to on your business until there's been some effort to comply with the law. 

And so two typical recommendations to remedy your situation. One might be where your potential exposure or liability is not very material would be let's just get you registered prospectively. 

Going forward let's get you registered. So turn on the tax, which can begin collecting tax going forward, collecting at the right rate on the right items. And you can feel good about that. That automation on the front end of that is almost a set it and forget it. The backside of that filing the returns is not so much just set it and forget it.

But don't let me get ahead of myself. The other remedy if you have a responsibility in a State and it goes back one year or two years, ten years is what's called a voluntary disclosure program, which every State has, which essentially allows you to come forward to the State on an anonymous basis, enter into an agreement with the State where the State says, okay, you're coming clean.

So what we're going to do, cause we didn't have to spend the time and effort to come find you. We're going to limit how far back we look. Most States are somewhere between three and four years on that tax, but we're also going to waive any penalties that we would normally impose, which could be up to 50% of the tax.

And some States even waive interest, which is unusual but some States do or some of the interest. And so if you have a pretty significant liability and there's a strong chance of the State could identify that and pursue that if you've been in that State or the law has been passed for, let's say five years that State may limit that to three years.

If they find you and they made you come forward, then they can go back for as long as they determined that you had nexus and you've been doing business in that State. So voluntary disclosure programs are great ways. There's also sometimes amnesty programs that may be available at different periods of time, which might also waive the tax in some situations.

And so we're always looking for the path or the remedy that essentially waives tax, waives penalty, and waives interest. Our goal is no money out of pocket so that we don't work against your margins. One of the things we say pretty consistently is sales tax is a margin killer. And it's also the biggest tragedy if you were registered and could have been collecting tax from a willing payer, a purchaser. Everybody knows we pay tax now because of these laws. And so you have a willing recipient that will pay the tax. And if you didn't do that, and it has to come out of your own pocket with penalty and interest, that's the biggest tragedy in sales tax.

And the reason I say it's a margin killer is maybe it's been a couple years or three years or five years, and you've not been collecting a tax that you should have been collecting at 8% and penalty and interest is imposed. You could be paying you know, upwards of 20, 25% of the tax that should have been collected and remitted.

So you're paying the tax plus 25% more of that tax. And if you're running on a 10% margin or a 15% margin, your margin has been killed for two or three years. We have seen it put companies out of business, unfortunately. But for the most part, we work with companies to mitigate that out-of-pocket money and help them continue to do what they do best and continue to grow their business.

[00:33:06] Jeffrey Feldberg: So Jason, the takeaway here for our listeners, ignorance is not bliss. Ignorance is not bliss. You're setting yourself up for some really severe challenges ahead of time. And Jason, really what you're sharing if we kind of zoom out for just a moment and you look at what you're talking about, hey, come work with us.

We'll do an analysis a what's next kind of strategy call to see what's going on there. And you'll not have to believe maybe I owe. Maybe I don't know. You will know with certainty. So believing is one thing. Having certainty is completely different and we all want to have certainty. Believing may happen, may not happen.

Certainty is knowing exactly what's ahead for us. And so it sounds like once you come in, you'll do your analysis. This is all that you do. And as a business owner, with you on board. I don't want to put words in your mouth, but to me and tell me if I'm off base, it sounds like, hey, I'm going to save money. I'm going to save time. I'm going to save effort. And to your point, I'm going to get peace of mind when all said and done. 

[00:34:06] Jason Parr: Yeah, no doubt, because in the end, we're going to work through that analysis. We're also going to help you get registered, where you need to be registered. We're going to help set up that front-end system to be able to collect tax at the right rates and on the right items. We're going to work with you on those remittances.

If you've been a business that's been preparing returns and filing returns in 2, 3, 4, or 5 States, that's fine. But if all of a sudden you're required to do that in 40 States, then you need an answer for that. And unfortunately for a lot of companies that need to register at this level and need these services in place, there's a cost to compliance.

And so that can be a little bit frustrating that you're really on the hook at this point to make sure that you have these processes in place and it can be super frustrating to deal with it. And so we like to say it just outsource it all, but we essentially become your State and local tax department and fulfillment of all of these services.

 But this I can tell you is cost to comply is far less than the cost to not comply. But it's an open door and an open window into what we do and what it looks like and what it costs. One of the things that's interesting about our firm is we don't bill by the hour. We gave that up a while back.

Everything that we do is a subscription priced. And so, you know what you're going to be paying, you know, what services are involved, what kinds of support and efforts are going to go into that. And it's really straightforward and clients really love it. If I bill you hourly and I tell you, it's going to be 40 to 60 hours, you're thinking 40, I'm thinking 60.

And if I tell you it's $200 to $400 an hour, then you're thinking 200, I'm thinking 400. And then we bill after the services are performed and we typically are going to have an argument about the bill and so all of that's resolved by saying here's what we're going to do. And here's the straightforward subscription costs that's associated with that.

And It's paid in advance of the services that are performed. Everybody's happy because they know exactly what they're getting and they don't have to enter into some long-term contract or agreement. We believe enough in what we do that's just simply month to month.

[00:36:11] Jeffrey Feldberg: I love that Jason. And again, you're providing certainty and I know as a business owner, I always prefer a project-based price relative to hourly, because like you said, hourly, where's it going to go? What's going to happen? Who knows? Project-based I have no surprises. I know exactly what's there. Let me ask you a question though.

More of on the technical side, there may be some business owners who were saying, hey, I hear you, Jason. I get all of that. But you know what? My business is not registered in the US. I have a company registered in somewhere outside of the US but I'm selling into the US. Does the long arm of the law from a State perspective, apply to me as a business owner who has a company that has a non-US-based location or home? 

[00:36:56] Jason Parr: The tax is still due so if you're an international company that's doing business through Amazon or any of the other marketplace platforms, you're in pretty good shape. I would say to anybody out there, that's an owner of an e-commerce business that only makes sales through marketplace platforms.

You're in pretty good shape. You probably don't need to be registered anywhere except maybe Missouri whose economic nexus law comes into effect on January 1st, 2023. The legislation has been passed, but the effective date is ahead of us. You probably don't have a lot of problems, but you, if you're an international company that is selling through your own website and shipping goods and products, and services into the US you do have a responsibility now, granted, it might be difficult for a State to reach out and grab or attach to that.

But it's legitimate. And there are a lot of international companies that obtain an FEIN to be able to conduct business in the US and then we help them get registered through that process. We don't actually get individuals registered for doing business in the US, we work with Scott Letourneau in Sales Tax Systems Inc.

It's really all he does. He helps international companies, especially e-commerce sellers to navigate the pitfalls of getting set up in the US if you want to set up as an entity in the US as an international company. But yes, my answer is yes, navigating that is a little bit different than a domestic company.

[00:38:20] Jeffrey Feldberg: Got it. Okay. So once again, don't believe you're out of the reach from the law. You have to have some certainty with that and you can get yourself set up and do all the right preparation. And Jason and team will only be too happy to save you the time, the heartache, and the headaches and help you go through that and do that for you.

So, Jason, this has been incredibly informative and we can go down this sales tax rabbit hole for how was all these different questions, but we're sorry to bump into some time constraints here. And we're at the part where I get to ask one of my favorite questions in the interview.

And the question is this, Jason. I want you to imagine for a moment, the movie Back to the Future. And in the movie, you have a magical DeLorean car, which can take you to any point in time. So Jason it's now tomorrow morning, you look out your window, and there it is. The DeLorean car it's sitting there. The door is open and it's waiting for you to hop on in, and you're going to go back to any point in your life.

And you can go back to Jason as a young child, a teenager, adult, whatever point in time you choose. What would you be telling your younger self in terms of life wisdom or advice or, hey, Jason, do this or don't do that? What would that look like for you? 

[00:39:34] Jason Parr: Man, I really appreciate that question. That's very thought-provoking. And I don't want to be too personal because it doesn't relate to my professional life at all, but I would want to go back to multiple points, not with any regret to do over, but to just remind myself, enjoy this moment.

Married my wife 31 years ago. The birth of each one of our six children, their marriages, the birth of our nine grandchildren. They just announced two more coming this year. Just a sense of being overjoyed in those moments. And I guess if I could tell myself anything, it would be make sure that you keep spending the time necessary to enjoy that and to enjoy those relationships.

[00:40:14] Jeffrey Feldberg: Wow, I love that advice and terrific life advice but Jason stop the presses, hold on six kids. That's wow. God bless you. That is absolutely amazing. And nine grandchildren, well talk about the gift that keeps on giving and you have it right there, I love what you're saying, hey, just enjoy the moment because that's really all that we have.

And I think that's wonderful advice. So, Jason, let me ask you this, as we begin to wrap up the episode if somebody would like to find you online or ask questions, where would be the best place to do that? 

[00:40:44] Jason Parr: You know, it's so complicated sometimes to get ahold of a company, but we're simply at

[00:40:50] Jeffrey Feldberg: It doesn't get any easier I love that. And this is where they can find the What's Next call and get signed up for that and get some answers for that. 

[00:41:01] Jason Parr: Absolutely. Absolutely.

[00:41:03] Jeffrey Feldberg: Terrific. Well, Jason, a heartfelt thank you for taking part of your day and spending it with us on The Sell My Business Podcast. And as we wrap things up, please say healthy and safe.

[00:41:13] Jason Parr: Thank you so much.

[00:41:14] Sharon S.: The Deep Wealth Experience was definitely a game-changer for me. 

[00:41:17] Lyn M.: This course is one of the best investments you will ever make because you will get an ROI of a hundred times that. Anybody who doesn't go through it will lose millions. 

[00:41:27] Kam H.: If you don't have time for this program, you'll never have time for a successful liquidity 

[00:41:32] Sharon S.: It was the best value of any business course I've ever taken. The money was very well spent.

[00:41:38] Lyn M.: Compared to when we first began, today I feel better prepared, but in some respects, maybe less prepared, not because of the course, but because the course brought to light so many things that I thought we were on top of that we need to fix. 

[00:41:54] Kam H.: I 100% believe there's never a great time for a business owner to allocate extra hours into his or her week or day. So it's an investment that will yield results today. I thought I will reap the benefit of this program in three to five years down the road. But as soon as I stepped forward into the program, my mind changed immediately. 

[00:42:16] Sharon S.: There was so much value in the experience that the time I invested paid back so much for the energy that was expended. 

[00:42:27] Lyn M.: The Deep Wealth Experience compared to other programs is the top. What we learned is very practical. Sometimes you learn stuff that it's great to learn, but you never use it. The stuff we learned from Deep Wealth Experience, I believe it's going to benefit us a boatload.

[00:42:40] Kam H.: I've done an executive MBA. I've worked for billion-dollar companies before. I've worked for smaller companies before I started my business. I've been running my business successfully now for getting close to a decade. We're on a growth trajectory. Reflecting back on the Deep Wealth, I knew less than 10% what I know now, maybe close to 1% even. 

[00:42:58] Sharon S.: Hands down the best program in which I've ever participated. And we've done a lot of different things over the years. We've been in other mastermind groups, gone to many seminars, workshops, conferences, retreats, read books. This was so different. I haven't had an experience that's anything close to this in all the years that we've been at this.

It's five-star, A-plus.

[00:43:25] Kam H.: I would highly recommend it to any super busy business owner out there.

Deep Wealth is an accurate name for it. This program leads to deeper wealth and happier wealth, not just deeper wealth. I don't think there's a dollar value that could be associated with such an experience and knowledge that could be applied today and forever. 

[00:43:44] Jeffrey Feldberg: Are you leaving millions on the table? 

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