Kexin Smith, LedgerGurus’ lead for sales tax research and consulting, was recently recognized by the Sales Tax Institute as a Woman to Watch in Sales Tax. Kexin was instrumental in starting the sales tax practice at LedgerGurus and Stephen Brown, LedgerGurus COO, had a brief conversation with her.
Stephen: Tell us about your background in accounting.
Kexin: I am a CPA and I’ve been working with LedgerGurus since August 2018. It’s been 3 1/2 years, and I’ve really enjoyed working here.
Prior to LedgerGurus, I graduated from Brigham Young University with a Bachelor and Master of Accounting, specializing in tax. I worked at Deloitte in their London office in the United Kingdom doing business tax. I filed lots of corporation returns for offshore entities that still have filing requirements. I’ve also worked at Goldman Sachs and other companies as well.
Stephen: In 2018, the Supreme Court Wayfair v. South Dakota ruling changed the landscape of sales tax for online sellers. What would say you’ve learned about sales tax having joined us shortly after that change?
Kexin: That sales tax is constantly changing. It’s a very challenging area, but it’s not an impossible area to be an expert in as long as you have the persistence to dig in deep to find out exactly what’s required and keep up with all the news and legislations. I think sales tax is a great opportunity for accounting firms and accountants that want to diversify their service offerings.
Stephen: Part of the reason that we started our own sales tax practice was there weren’t many firms that provided that service. Why do you think firms don’t provide sales tax services?
Kexin: I think it seems challenging because it’s a multi-state issue. After the Wayfair decision, firms and businesses must know requirements in all the different states, what’s taxable and the procedures when it comes to registrations. I think most accountants and accounting firms don’t feel like they can become expert in all the states besides their home state. What they don’t realize is there’s lots of technology companies that make that possible in today’s day and age.
Stephen: Who are some of the top sales tax technology companies that you’re you’ve worked with?
Kexin: We work with Sovos and their subsidiary Taxify for smaller customers. TaxJar and Avalara are two other great companies in this space. They have great databases for different tax rates in all the different states and they do their own research when it comes to taxability. They also have forms that are updated when the states update what’s required on the forms. They help accountants build a sales tax practice.
Stephen: What would you like to see improved by the sales tax technology vendors?
Kexin: The initial implementation of the software can be improved for sure because sales tax software can be complicated, especially for non-accountants. If the settings on these tools are not set up correctly, then the returns that get filed later and the amounts remitted are not going to be accurate. So, I would love to see these companies make the implementation phase a lot smoother and a lot more user friendly, especially when they don’t have help from accounting firms like us.
And the second thing is I would love to see is that the sales tax technology companies have databases that are consistent. There can be a discrepancy between the vendors because they use different databases and different rates sometimes. I would love to see uniformity on that.
Stephen: On the legislative front, what would you want to see from states that could improve sales tax compliance for businesses?
Kexin: One word – simplification. For example, Colorado returns are often 100 pages long and can be 1,000 or more pages long because you have to report to each of their counties and districts. A better example is Alabama and Texas where you submit a 1-page return and they distribute taxes to the counties and other entities.
Second, would be consistent economic thresholds for each state so businesses can know where they owe sales tax.
Third, would be making registration much easier. Sometimes remote sellers need to register in separate cities and parishes. Ideally, they only register with the state.
Stephen: Finally, tell us about the sales tax course that we recently launched.
Kexin: We just launched LedgerGurus sales tax courses at the end of last year and we’ve had a good amount of participants. It’s for both accountants that want to develop a sales tax practice or for online sellers that want to take this on themselves instead of hiring it out.
We break sales tax down into steps, making it easier to understand. It’s a very practical way to learn to manage your sales tax. We teach people how to do a nexus analysis, develop a game plan on where to register, how to do the registration, how to do the filings, and how to manage to manage sales tax from a project management perspective. We review sales tax technology and teach how to setup the tools with your ecommerce platform and how to use them for filing sales tax returns.