Vertex has notified all Companies using Vertex O Series of the plan to transition O Series version 4.1 into an Extended Support phase by October 2011. This notice is intended to provide you with more detail on the Extended Support Program and to serve as a reminder to begin your upgrade project if you have not initiated it yet within your company.
The Extended Support Program will begin October 31, 2011, and for an additional fee, will provide a year of support from Vertex for O Series version 4.1. This program includes continued phone support from the Vertex call center, as well as continued monthly rate and rule updates available for download from the Customer Cafe. In addition, full access to all services on the Customer Cafe including the Knowledge Center, Product News, and previously released patches for O Series version 4.1 will remain available to program participants.
The recommended course of action is to upgrade to the latest version as soon as you can to begin using the features and enhancements Vertex has built into our latest version of O Series. We are recommending all customers who are using version 4.1 to upgrade directly to version 6.0 in order to take advantage of all features of both version 5.0 and 6.0. Please contact us to discuss how best to proceed with this upgrade project.
Illinois: New law imposes “click-through” nexus on certain out-of-state remote sellers
Effective immediately and applicable to periods beginning July 1, 2011,a new law imposes sales/use tax nexus on certain out-of-state remote sellers having a contract with a person located in Illinois under which the person, for a commission or other consideration based upon the sale of tangible personal property by the seller, directly or indirectly refers potential customers to the seller by a link on the person’s Internet website. Specifically, such sellers are deemed to be “retailers” or “servicemen” maintaining a place of business in Illinois that are required to collect Illinois sales/use tax on tangible personal property or services sold for use in Illinois if the cumulative gross receipts from such contracts to Illinois customers exceed $10,000 during the preceding four quarterly periods ending on the last day of March, June, September, and December.
Additionally, beginning July 1, 2011, new law imposes sales/use tax nexus on certain out-of-state remote sellers having a contract with a person located in Illinois under which:
The seller sells the same or substantially similar line of products as the person located in Illinois and does so using an identical or substantially similar name, trade name, or trademark as the person located in Illinois; and
The seller provides a commission or other consideration to the person located in Illinois based upon the sale of tangible personal property by the seller.
Again, such sellers are deemed to be “retailers” or “servicemen” maintaining a place of business in Illinois that are required to collect Illinois sales/use tax on tangible personal property or services sold for use in Illinois if the cumulative gross receipts from such contracts to Illinois customers exceed $10,000 during the preceding four quarterly periods ending on the last day of March, June, September, and December.
Michigan: Sales Not Covered by Direct Pay Permit; Taxpayer Liable for Sales Tax on Cleaning Supplies
The Michigan Tax Tribunal has held that a taxpayer was liable for sales tax on cleaning supplies resold to a customer that had a direct payment authorization issued by the Department of Treasury. The taxpayer provided facility maintenance services and supplies and equipment to other companies. During the period at issue, the taxpayer contracted with an automaker to provide supervisors to oversee the company’s janitors. The contract also required the taxpayer to purchase cleaning supplies and equipment, which were then resold to the automaker for use by its janitors. The taxpayer did not collect and remit sales tax on these sales because the automaker held a direct pay permit. The Department subsequently determined that the taxpayer owed use tax on the cleaning supplies. In the Department’s view the transfer of the cleaning products was incidental to the performance of the taxpayer’s services and therefore the taxpayer owed use tax.
The Tribunal first rejected the Department’s argument and held that the “incidental to service” test did not apply because the sale of the cleaning supplies was separate and distinct from the provision of the supervisory services. As such, the taxpayer did not owe use tax on the basis that the transfer of the supplies was incidental to the performance of its services.
Next, the Tribunal addressed the two transactions — the taxpayer’s purchase of the supplies from its supplier and the subsequent resale to the automaker — to determine if they were taxable. In addressing the taxpayer’s purchase of supplies and equipment, the Tribunal determined that, because of the resale exemption, the transaction was not subject to sales tax. Further, with respect to use tax, the taxpayer did not use the property purchased so use tax was not applicable. With respect to the second transaction, the taxpayer’s sale of the supplies and equipment to the automaker, the Tribunal held that the sale was not covered by the automaker’s direct pay permit because there was an exclusion from that permit for the sale of “tangible personal property consumed by a person performing any service” for the permit holder. Because the automaker’s janitors (persons) used the supplies in the course of cleaning (performing services), the Tribunal determined that the transactions were not covered under the direct pay permit. Lastly, the Tribunal addressed whether the taxpayer owed sales tax, or the automaker owed use tax. In the Tribunal’s view, sales tax is imposed before use tax and because the taxpayer should have collected sales tax on the transactions, the taxpayer, rather than the automaker, was liable for the unpaid tax.
Attention Vertex Sales Tax L Series users!!
Regular support for some Vertex Sales Tax L Series customers will be ending as of January 31, 2011.
The new Sales Tax L Series 5.0 release is now available. This release offers new functionality improvements to enhance jurisdiction identification and provide additional GeoCodes. The 4.3 and 4.2 releases are also available and include many program improvements and compliance updates.
Starting in January 2011, Sales Tax L Series customers who continue to operate on a software release that is older than five years (example: Sales Tax L Series release 4.1 or older) will be required to participate in the Extended Support Program in order to continue to receive monthly data updates. Monthly data update #340, which will be delivered in December 2010, will be the last data update that will be compatible with older releases of Sales Tax L Series. If you cannot upgrade before January 2011, participation in the Extended Support Program will be required in order to provide continued availability of monthly data updates for older program releases. The price of the Extended Support Program is in addition to the regular annual user license agreement.
Therefore if you have not upgraded your software to the newer version, now would be the ideal time to do so. As this Vertex software does provide patches or updates, the only time that the organization can take advantage of bug fixes, software updates, new functionality, and changes such as Texas or Washington sourcing rules is when the latest version is installed. This is also a great time to review the entire TDM rules configuration to make that they are accurate and up to date. When is the last time that they were updated? Please contact Brian @ 847 207-3935 for more information on how to upgrade to the latest version.