IPA Vendor Spotlight On . . . TaxConnex

Name: Robert Dumas

Robert Dumas

Company: TaxConnex

Title: Founder and Managing Partner


  • Founded what would become the country’s largest sales tax compliance service bureau in 1996 which was acquired by The Thomson Corporation (now Thomson Reuters) in 2005
  • Served as Vice President of Operations at The Thomson Corporation until founding TaxConnex in 2006
  • Is a nationally recognized expert in telecommunications tax and a frequent speaker on the subjects of sales and use tax, as well as sales tax compliance

What is the biggest sales tax issue facing small to mid-sized business clients today?

With the recent South Dakota vs. Wayfair ruling, the sales tax world has been turned upside down. Historically, small to mid-sized businesses needed to be concerned about sales tax only if they had a substantial physical presence in a state. What determines a substantial physical presence was and continues to be challenging to determine. With Wayfair, small to mid-sized businesses now need to be concerned about sales tax if they meet certain economic thresholds defined by the amount of sales revenue and/or the number of sales transactions in a given state. These new economic nexus rules apply to all businesses – not just those selling online. A business that previously only had to think about sales tax in their home state, now can be exposed to sales tax in 30 or more states.

Why do firm leaders need to know about the recent sales tax changes?

Your clients expect you to know the new economic nexus rules. They are reading about these changes and are concerned about potential exposure. They are looking to you to guide them through the maze of uncertainty and doubt. If you’re not equipped to answer their questions, they will seek out someone that can – likely your competitor.

How can businesses handle the challenges of keeping up with constantly changing federal and local sales tax rules?

It is unlikely that sales tax will ever be simplified to the point of full automation. It seems as if every attempt to simplify sales tax adds another layer of complexity. The new economic nexus rules are a good example. One way to stay current with changing federal, state and local sales tax rules is to utilize some type of sales tax calculation software that has the taxability rules and rates built into it. These systems can be effective in certain situations, but they are not a necessity for every business. Businesses with a limited number of states in which they need to collect sales tax, or a relatively simple product line, may not need the sophistication of sales tax calculation software. There are less expensive alternatives to consider, including tax rate subscription services.

Is sales tax automation the best solution for small to mid-size business clients?

Automation can definitely play a role. But what I often see is a business attempting to put a square peg in a round hole. Some sales tax software vendors believe they have a solution that plugs in and solves all of a business’ sales tax issues.  They may refer to it as the “easy button.”  Unfortunately, sales tax compliance is not easy. We help companies determine the best way to manage sales tax for their business.

What options do firms have to provide sales tax compliance services to their clients?

Firms can either build a process internally, buy a sales tax compliance process from another firm, or partner with an independent company. We have found that most of the Top 400 accounting firms, with the exception of some of the largest national firms, don’t want to provide sales tax compliance services. It typically does not align with their standard billing rates and the risk of not filing a return or making a payment on time is too great. As a result, we see these firms partnering with sales tax specific providers like TaxConnex to bring sales tax compliance to their clients. In deciding with whom to partner, we believe there are a few key factors: (1) Will the partner uphold the firm’s commitment to responsiveness? (2) Will the partner compete against the firm for the firm’s core business including income tax work or sales tax consulting work? (3) And will the partner help maintain the firm’s reputation in the market?