Navigating Divergent State Sales Tax Treatment of Product and Service Warranties and Software Maintenance Contracts

Recording of a 110-minute CPE webinar with Q&A


Conducted on Tuesday, February 21, 2017
Recorded event now available


This webinar will provide tax professionals with a detailed update on the latest state tax developments and trends for multi-state companies buying or selling warranties. The panelist will offer compliance approaches to adjust to multi-state developments.

Description

Whether a company acts as buyer or seller, sales of warranties or maintenance contracts covering various products (along with associated labor and parts) are an area of state sales tax policy with considerable variation and confusion for multi-state corporations.

In many states, a service agreement that must be bought with a product is taxed, while an optional warranty is exempt. However, optional software maintenance agreements often are handled differently. Sales tax on parts and labor may depend on whether the warranty is mandatory or optional and who backs it.

Depending on the state, buyers and sellers may need to consider whether the “true object” of a warranty contract sale was a product or service; whether the deductible for warranted repairs is taxable; and whether withdrawal of repair parts from inventory constitutes a taxable sale.

Listen as our experienced state tax adviser provides a practical guide to the latest developments in state sales tax treatment of warranties to effectively manage this complex aspect of multi-state sales tax compliance.

Outline

  1. General state tax issues with warranties
    1. Treatment of mandatory vs. optional warranties
    2. Handling of contracts covering physical products vs. software
    3. Special issues with extended warranties
    4. Taxability or exemption parts and labor
  2. More complex issues with warranties
    1. States that impose “true object” tests
    2. When and where using third-party warranty administrator can trigger sales tax nexus
    3. Handling of inventory withdrawals of repair parts
    4. Taxability of deductibles
  3. Specific large state examples
  4. Options for adjusting a multi-state tax compliance strategy

Benefits

The panelist will bring you current on these and other critical areas:

  • Variations among states’ sales tax policies covering mandatory vs. optional or extended warranties
  • Software maintenance agreements: which states opt to treat service contracts differently when they cover software vs. a tangible product
  • Potential nexus traps: when using a third-party warranty administrator can create sales tax duties for your company in a state
  • Current hot topics: impact of state court and administrative rulings; issues such as extended warranties purchased online

Learning Objectives

After completing this course, you will be able to:

  • Recognize recent state sales tax developments and changes to sales and use tax treatment of tangible products related to warranties
  • Identify states that impose sales and/or use tax on software maintenance agreements
  • Determine how states include associated parts and labor on warranty work as subject to sales tax
  • Discern whether your company’s sales tax policies on warranty sales or purchases are in compliance with current multi-state developments

Faculty

Sean Evans, Director, Tax Advisory Services
DuCharme McMillen & Associates, Overland Park, Kan.

Mr. Evans provides a variety of nationwide tax advisory services including sales/use tax process reviews, nexus studies, sales/use tax training, and voluntary disclosure negotiations. Additionally, he is skilled in developing tax matrices designed to support clients’ business process requirements as well as strategic tax planning. He also serves as project manager for tax software implementations and business process reviews. He has 20 years of experience in transaction tax consulting. Prior to joining DMA, he was a Senior Tax Manager for a national tax firm, where he conducted both public and on-site training courses on sales/use tax as well as federal information reporting.


Recordings

Recorded Event

Includes full event recording plus handouts (available after live webinar).

Note: Self-study CPE and EA credits are not offered on recorded events.

Recorded Webinar Download $247.00
Available 48 hours after the live event

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Recorded Audio Download (MP3) $247.00
Available 24 hours after the live event

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DVD (Slide Presentation with Audio) $247.00 plus $9.45 S&H
Available ten business days after the live event

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Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

Program Materials

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Program Materials

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CPE Credit

Strafford is a NASBA CPE sponsor and our live webinars qualify for CPE credits. They offer you a high quality, cost effective, and convenient CPE option, with no lost travel time or expenses.

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Customer Reviews

I thought that the speakers were very knowledgeable and their presentation materials will be good reference guides.

Claudia Del Castillo, CPA

Sol Schwartz & Associates

Provided a lot of information. Examples made it easier to put in everyday perspective.

Therese Au

Forsythe Technology

I especially liked the examples illustrating the topics concepts.

Melinda Tompkins

Holly

It was an excellent program!!

Marni Odermann

Supervalue

Coverage was practical and straightforward. Well done.

Stuart J. Frentz

Bradley Arant Boult Cummings

or call 1-800-926-7926

Sales and Use Tax Advisory Board

Silvia Aguirre

Principal

CertCapture

Rick Bregitzer

Manager of Domestic Taxes

Parker–Hannifin

Stephanie Anne Lipinski-Galland

Partner

Williams Mullen

Joseph Geiger, Esq., CPA

Tax Consultant

Vertex

Diane Matulich

Senior Manager, Local Taxes

Advanced Micro Devices

Rich Prem

VP of Indirect Taxes and Tax Reporting

Amazon.com

or call 1-800-926-7926

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Strafford webinars are backed by our 100% Unconditional Money-Back Guarantee: if you are not satisfied with any of our products, simply let us know and get a full refund. For more information regarding complaints and refunds, please contact us at 1-800-926-7926 ext 10. Complaints regarding this program can be submitted via the course evaluation found in the “Thank you” e-mail at the end of the course.