It’s that time of the year again, when states offer residents a “sales tax holiday” – almost always focused on the back-to-school buying season.

This year, for the first time ever, Illinois will offer residents a sales tax break on school supplies, clothes and shoes that cost up to $100 without paying the 5 percent state sales tax. Lost tax revenues for the period of August 6-15 are estimated at $60 million.

This is obviously great for shoppers, but every year when the tax holidays kick in, some agencies remain skeptical and focus on the negatives, such as lost revenues, according to the story on Stateline.org. For example, the Tax Foundation argues that sales tax holidays don’t actually encourage shoppers to buy anything. Instead, shoppers purchase things they would have bought anyway, but on a different day.

Sixteen states will participate in this year’s sales tax holiday. The article includes the viewpoints of other groups as well. Read the full story here.

Although small businesses in Ohio already have no general tax on corporate profits or personal property used in business, life in the Buckeye state will soon get even sweeter.

According to an article on WebCPA.com, Ohio is in the final phase of lowering its business taxes so that small business owners can collect their first $1 million in receipts virtually free of state taxes. In addition, businesses will pay only about $4,000 on the first $5 million in receipts.

Based on a set of previous tax reforms, Ohio is one of only two states with no general tax on either corporate profits or personal property used in business.

“We took a look at the barriers to business from a tax perspective at the state level, and went in and tried to eliminate those barriers that were impeding companies from being globally successful, so any company can look at our state as an advantaged location to serve the world market,” said Ed Burghard, executive director of the Ohio Business Development Coalition.

According to a study conducted by professors at Georgia State and Niagara Universities, in one 24-hour period, only 18% of eBay sellers of consumer electronics collected sales tax on products they sold – even in their own home states. Data such as this adds steam to Rep. Bill Delahunt’s nascent Main Street Fairness Act, a bill that, if passed, would let states simplify their sales tax collection methods (as more than 20 states have already done) to require out-of-state merchants (including online sellers) who do not have physical presence (nexus) in the state in question to collect sales taxes.

This new data, and its relationship to the Main Street Fairness Act, is highlighted in a story on Forbes.com.

The Georgia-Niagra study, originally published in the National Tax Journal, notes that compliance rises dramatically with the size of the merchant. However, one of the professors, Mikhail I. Melnik of Niagara University, said he was surprised to find that even among eBay sellers with 10,000 to 15,000 ratings – those with many unique customers who do not necessarily qualify as “occasional” sellers – only half bothered to collect sales taxes on in-state sales.

“They appear to be real businesses who have decided deliberately not to comply with state sales tax,” Melnik said. “That’s a violation of law.”

As states continue to scramble for additional revenue in the midst of all manner of fiscal crises, Melnik points to one of the study’s key findings, underscoring the big push for passage of the Main Street Fairness Act: “the real gold for revenue-hungry states is to be found by reaching across state lines.”

In my last blog, we explored the first of three activities to help you capitalize on your summer growing season - networking in your “social sphere.”  In this article, we’ll explore two other important activities that can help you generate new business and expand your influence in your chosen markets.

Meet With Your Clients
Cross-serving your clients – or selling additional services to them - is the holy grail of the accounting profession.   It is a great client retention strategy because clients are more likely to stay with their CPA firm the more services the firm provides for them.  Making your firm a “one-stop service provider” helps build client retention and loyalty.

I’m not suggesting that you explore ways to deliver more to your existing clients just so you can sell your clients more “stuff.”  Instead, I want to help you uncover real client needs waiting to be met, because if your clients have unmet needs and you’re not solving them, you run the risk that someone else will.

To position yourself to meet your clients’ needs, conduct at least one existing client meeting per week this summer (either by phone or in-person).  Start with your “A” clients or your largest clients and eventually contact all of them.  Use the meeting as an opportunity to “check in” and see how you are doing for them.  Then, ask a few questions to help you assess whether or not the client may be a candidate for other services, including finding out their most important goals for the coming year and what challenges they’re most concerned about as they look ahead. 

Assuming the client is satisfied with the quality and level of service that they are receiving, you can also share that the highest compliment they can pay you is the referral of a friend or colleague to your firm. Ask them if they know anyone who is looking for a CPA or someone who could benefit like they have from your services - and make sure that they know you’re not “too busy” to accept referrals or to do more work for them.

Build Referral Source Relationships
Another great way to develop business this summer is to focus on establishing long-lasting relationships with referral sources.  If you already have some strong referral sources, be sure to first reach out to them and schedule an appointment to meet if you haven’t met for awhile.  Then, commit to continue meeting on a regular basis, perhaps as often as quarterly, to deepen the relationship and stay current on changes in your firms.  If you want to build additional referral sources, begin looking for potential bankers, attorneys and other service professionals with whom to partner. 

Start by contacting your own banker, insurance agent or other professional service providers and make them aware of your interest in exploring a referral relationship.  You can also contact your local bank branch and ask to speak with their business banker.  Most business bankers are very interested in CPA relationships, so your interest is likely to be reciprocated. 

With any potential referral source, let them know that you would like to talk about the possibility of getting to know each other better because you would love to be able to make recommendations to your clients who may require their services and want to serve as a reliable and trusted resource for them to refer their clients to.  Although asking for these types of meetings can feel somewhat awkward at first, it will start to feel more natural the more often you do it. 

Keep in mind that you may need to have a couple of meetings before you determine if you are going to have a win-win referral relationship.  If it doesn’t feel right or you wouldn’t feel confident referring people to the prospective source, simply thank them for their time and move on to other sources until you do find the right fit.  Referral sources are long-term relationships where mutual respect and trust are present.  You only need a few to really generate opportunities, so be particular with whom you choose to partner. 

Dedicate time to these two activities every week, and you’ll be sure to generate new relationships and new business, too.  What one specific action can you take this week?  Post your commitment and share your result, too.  We’re interested!

Jennifer Wilson is a partner and co-founder of ConvergenceCoaching, LLC, a leadership and marketing consulting and coaching firm that specializes in helping CPA and IT firms achieve success.  Learn more about the company and its services at www.convergencecoaching.com.

Knowing an organization’s data is safe and secure – and lowering the risk of expanding too much, too fast – are two of the reasons Michael Hugos believes cloud computing will continue to explode in usability and popularity over the next several years.

Hugos, a former CIO and a principal of the Center for Systems Innovation, is co-author of a forthcoming book on cloud computing, and was profiled in a recent CFO.com article, “Certainties: Death, Taxes, and the Cloud.”

Cloud computing is certainly not without its share of controversy, where many concerns come from IT departments, says Hugos.

“Cloud computing is not happy news to many people in the IT world,” he says. “Most IT jobs are for system administration, and that’s going to be outsourced. It will be the equivalent of what happened to blue-collar manufacturing jobs here in the United States in the 1980s.”

For many companies, profits are directly tied to data centers, so Hugos says it’s hard to argue with the success many large companies have found so far in cloud computing, including Amazon, Google, IBM, and Hewlett-Packard.

“In the showdown between security and profitability, profitability will win,” says Hugos. “I’m not suggesting that companies get rid of all their data centers in the next six months. But over the next four or five years, as they need to refresh their servers, I don’t see why they would want to continue adding hardware that is becoming obsolete.”

A new white paper, “Three Key Tech Strategies of Successful 21st Century Accounting Firms,” authored by Jim Bourke, CPA.CITP, and Partner at WithumSmith+Brown, PC, was presented during the press appreciation reception hosted by SpeedTax and Fujitsu ScanSnap at the recent AICPA TECH+/Practitioner’s Symposium Conference.

By all accounts, the event was a huge success, thanks to Jim Bourke’s contributions and the many attendees who visited with members of the accounting press. The event was held on Monday, June 7 at the Bellagio Hotel in Las Vegas.

Representing the AICPA were Bob Harris, Chairman of the AICPA; Tommye Barie, a new AICPA Board member and Chair of the AICPA’s National Accreditation Commission; Jim Metzler, Vice President, Small Firm Interests; and Mark Koziel, Director of Specialized Communities and PCPS/Firm Practice Management. Other staff included Joann David-Parrilla and Janis Parthun. 

Representing the press were Alexandra DeFelice and Loanna Overcash, Journal of Accountancy; Bill Carlino and Seth Fineberg, Accounting Today; Gail Perry, AccountingWEB; Greg LaFollette, The Tech Gap; and Scott Cytron, The CPA Technology Advisor.

Attendees included Peyton Burch, event chair for the AICPA TECH+ conference, as well as many members of the TECH+ and Practitioner’s Symposium Committees.

The press also had a chance to meet with key SaaS vendors at the reception, including Rene Lacerte, CEO of Bill.com; Dan Druker, SVP at Intacct; Ed Jennings, CEO of Copanion; Kimberly Kovacs, CEO of OptionEase; Mark Albrecht, CEO of XCM; and Leslie Cedar, Vice President, Ketera.

Special thanks to Fujitsu for its support and participation in the event. Representing Fujitsu were Doug Cripps, Megan Fowler, and Fujitsu ScanSnap’s primary contact to the accounting profession, Kimberly Hogan.

Although levying a tax on accounting, healthcare and other professional services isn’t new, it is somewhat revolutionary to add managed service providers to the list as part of various states’ efforts to replenish depressed state coffers. The story was reported in ChannelPro.

Managed service providers include vendors offering cloud computing, hardware as a service (HaaS), and software as a service (SaaS).

State auditors are confused as they attempt to delineate between managed service providers providing a “good” and/or a “service.” If companies provide “goods,” then the tax is clear cut. If they provide “services,” coming to terms with potential tax is more difficult. Previously, any professional service was not taxed.

“But where it gets tricky is if the MSP provides ongoing management and maintenance not on the device per se, but the data on it,” says Charles Weaver, president of MSPAlliance. “But now you have auditors who look at an invoice for a piece of hardware and see what looks like a one-year maintenance agreement, and say you have to pay sales tax on that whole year of revenue. Public-policy-wise, it’s really foolish to start taxing IT and IT services, the one sector that is actually thriving in this economy.”

Now that the spring 2010 busy season is officially over, it’s time to turn our attention to the business of growing.  

In my next two blogs, we’ll explore three activities to help you capitalize on your summer growing season.  Today, we’ll explore the first of these activities: networking in your “social sphere.”

All too often, I find that people aren’t taking the time to really get to know the people in their social and professional spheres.  How well do you know your neighbors, the parents of children you coach in Little League or your fellow golf club members?  Where do they work?  Who is their accountant?  Your neighbors and the parents of your children’s friends, for example, are all potential individual tax and/or financial planning clients, and they may be corporate prospects, too. 

Your daily environment is filled with potential prospects that could benefit from the services that your firm has to offer.  Start paying attention to people in your sphere and intentionally deepen your knowledge of them and their circumstances – more ask than tell – to see if there are opportunities where you can be of assistance.  Your sphere includes clubs like Rotary, networking groups like your local Chamber, and professional associations like the AICPA, your local state CPA society and the Association for Accounting Marketing (AAM), exercise groups and clubs,  sporting clubs and teams, PTA and other children’s groups, church groups, Toastmasters and many more venues you may interact with outside of work. 

The number one way to uncover opportunities within your social sphere is to be curious.  Ask people questions like:

·         What does your organization do? 

·         How do you like it? 

·         How long have you been there?

·         What role do you play there?

·         Who does your accounting?

·         Who does your corporate tax?

·         Who does your tax personally?

·         Who is your auditor? 

·         Who is your CPA?

·         How do you feel about the service you are receiving?

·         How are they doing for you?

This list of questions isn’t meant to be asked serially, in some rapid-fire and overly inquisitive manner, but instead a few of these questions may make sense to “slip into” a conversation you’re having with someone you have begun to build personal rapport with or with someone you have met in a professional networking setting. 

Also, don’t hesitate to share the services your firm offers with your family members and close friends and then ask them if they have any ideas for referrals.  Ensure that everyone you know knows what you do and the difference you make for the people you serve.

Please don’t hear me as suggesting you turn every personal conversation into a self-serving business opportunity!  Instead, if you haven’t educated those close to you on what you do and enrolled them in supporting you, doing so once and then reminding them once per year will be just about right. 

And don’t forget to engage in online social networking as part of your overall networking strategy.  If you haven’t already – check out the most popular business and social networking sites, including LinkedIn and Facebook!  These sites are rapidly gaining in popularity and provide a powerful way to build a network of connections – be sure to connect with me at http://www.linkedin.com/in/jenniferwilsonprofile.

Summer time is the time to “make hay” and drive firm growth.  To reap the harvest, dedicate time every week this summer to network in a more meaningful way within your social and professional spheres.  And be sure to share your successes with us on this blog, too.  We’re interested!  

Jennifer Wilson is a partner and co-founder of ConvergenceCoaching, LLC, a leadership and marketing consulting and coaching firm that specializes in helping CPA and IT firms achieve success.  Learn more about the company and its services at www.convergencecoaching.com

Maybe it’s spring … or perhaps it’s an improved economy. Regardless what the reason is, state officials are optimistic about future tax revenues based on increased collections.

However, according to an article on Stateline.org, additional revenues probably won’t save an already damaged fiscal year for most states:

“With two months left in the current fiscal year for most states, the improvement in revenue comes too late to forestall a third straight year of cutting spending and raising taxes and fees. States face two or more years of gradual recovery because tax collections plunged more than 18 percent during the recession.”

Although it was recently reported that California experienced a loss in revenues, the forecast for most states is sunny. In Oklahoma, for example, Treasurer Scott Meacham said, “Based on the revenue trends we’re seeing now, Oklahoma’s economy is on the mend.” The state’s tax collection forecasts for February exceeded figures from the same month the previous year for the first time since December 2008.

The article includes most state revenue totals, including a state-by-state total for fourth quarter 2009.

According to an article on Rick Telberg’s CPA Trendlines, the outlook for SaaS (Software-as-a-Service) is very strong.

SMB investments in SaaS applications, excluding CRM and ERP as SaaS, will jump to a compound annual growth rate of 18 percent over the next five years, according to Access Markets International Partners Inc.

“SaaS solutions are particularly well suited to workers on the go since they’re easy to use offsite across diverse platforms,” says Neha Jalan, an associate at AMI-Partners.

The latest issue of Accounting Today also projects positive horizons for SaaS. In “Technology Accelerates Corporate Advantage,” Gary Boomer writes: “… the most significant development to impact firms over the next few years will be ‘cloud computing’ or Software-as-a-Service. SaaS will change all firms’ strategies and help small firms to compete. Large firms may be challenged by resistance to change or lack of IT leaders who are willing to give up control of their data centers and large number of technical personnel. Firms are already moving to a hosted environment in tax return preparation; OCR and tax file organization; document management; e-mail, calendars and workflow; and practice management.”