Transportation & Logistics International 2018 - Volume 7, Issue - 7

Technology

Volume 7, Issue 1

There's never a simple answer
when it comes to calculating excise
taxes, particularly in the secondary fuel
distribution market. In the midst of an
ever-changing landscape of tax laws that
are complicated by differences between
products, states and municipalities, it's
hard for tax managers to stay abreast of
legislation. According to Avalara Excise,
in the last two years alone, 77 percent of
fuel excise tax rules have changed. Mix
in route changes, fuel splits and diversions, and it's fair to say that anyone
would be overwhelmed.
To be successful, tax managers not
only have to identify when there is a
problem, they have to pay any associated
penalties and interest, and put the right
parameters in place to ensure that it
doesn't happen again - and today, this is
typically done using manual processes.
The danger lies in the fact that businesses are always playing catch up, and
are unable to make strategic decisions
around their finances. In addition, a
seemingly small miscalculation can
have dire consequences as a tax analyst
struggles to stay abreast of current legislative requirements and complexities.
This failure to look forward can have a
major impact to their bottom lines.
In an industry that depends on volume for margins, even a percentage of a
cent matters. To stay compliant, avoid
unnecessary penalties, and still have the
time to capitalize on growth opportunities in the secondary fuel market,
distributors must shift gears and implement reliable tax automation technology
and processes.
Reliable tax automation tools update
automatically with legislative changes,
alleviating the burden of tax managers
to input every tiny excise tax modification. Technology that reflects these
taxes across all government jurisdictions allows distributors to improve
workflow processes, reduce risk of

unforeseen liabilities and penalties,
and decrease or eliminate overpayment
to state agencies. With automation, no
longer will a small legislative change or
difference across a state or municipality
be the difference between a beneficial
new venture and a surprise tax bill.
For one company, that surprise tax
bill came out of what appeared to be a
good opportunity for its traders to sell
ethanol across state lines.

"To be successful, tax
managers not only have
to identify when there
is a problem, they have
to pay any associated
penalties and interest."
Prices were better in Georgia, so, at
least initially, it made sense. However,
the traders did not realize that they had
to be a licensed distributor to sell bulk
fuel below the rack, and that the tax
structure for licensed distributors was
vastly different, resulting in an unforeseen tax liability.
If the carrier would have used a tax
automation solution to validate the
opportunity, they would have had access
to up-to-date rules and regulations,
allowing them to properly evaluate the
opportunity from the beginning and
mitigate any potential tax consequences.
Not only does tax automation help
distributors to keep more of their money
in the long run, they'll spend less time
chasing overpayments that can take
many months to recoup. All in all, that
adds up to a pretty big weighted cost of
capital, which gives executives the power to make informed decisions about the
company and expansion opportunities.

Getting Strategic
So, what can tax managers do with all
this newly-acquired free time? When
they're not trying to grasp which tax
changes happened over the course of
a day, week or month or spend time
chasing over payments, they can get
strategic. As a strategic member of the
operations team, the tax manager can
provide advice to help mitigate risk
and define certain requirements based
upon proposed opportunities.
Not only will this minimize adverse tax treatments, in some cases,
it will provide optimal outcomes. At
a minimum, this proactive approach
will provide the tax manager time to
prepare required licensing and prevent
potential fines, fees, and penalties.
Previously, the majority of tax
managers simply didn't have the time
to step back and look at the data and
make better decisions, and that's
because they were relying on manual
spreadsheets and paper trails. With tax
automation solutions, they now have
the power to manage existing tax needs
and stay on top of tax changes, bringing
increased confidence in the accuracy
of their work. In addition, with this
newfound efficiency, tax managers can
look towards the future to identify new
opportunities in business and cement
their value to the organization.
John Beaty is a results-oriented
senior executive with more than 22
years of process technology consulting experience in the petroleum
industry and 30 years of team development
and organizational leadership. He currently
serves as the general manager for Excise at
Avalara. Avalara is a tax technology solution
provider focusing on indirect tax determination and compliance with global capability.
Avalara helps companies of all sizes achieve
transactional tax accuracy for their indirect
tax requirements.
VOLUME 7, ISSUE 1 TLIMAGAZINE.COM

7


http://www.TLIMAGAZINE.COM

Table of Contents for the Digital Edition of Transportation & Logistics International 2018 - Volume 7, Issue

Table Of Contents
Transportation & Logistics International 2018 - Volume 7, Issue - Cover1
Transportation & Logistics International 2018 - Volume 7, Issue - Cover2
Transportation & Logistics International 2018 - Volume 7, Issue - 1
Transportation & Logistics International 2018 - Volume 7, Issue - Table Of Contents
Transportation & Logistics International 2018 - Volume 7, Issue - 3
Transportation & Logistics International 2018 - Volume 7, Issue - 4
Transportation & Logistics International 2018 - Volume 7, Issue - 5
Transportation & Logistics International 2018 - Volume 7, Issue - 6
Transportation & Logistics International 2018 - Volume 7, Issue - 7
Transportation & Logistics International 2018 - Volume 7, Issue - 8
Transportation & Logistics International 2018 - Volume 7, Issue - 9
Transportation & Logistics International 2018 - Volume 7, Issue - 10
Transportation & Logistics International 2018 - Volume 7, Issue - 11
Transportation & Logistics International 2018 - Volume 7, Issue - 12
Transportation & Logistics International 2018 - Volume 7, Issue - 13
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Transportation & Logistics International 2018 - Volume 7, Issue - 15
Transportation & Logistics International 2018 - Volume 7, Issue - 16
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Transportation & Logistics International 2018 - Volume 7, Issue - 18
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Transportation & Logistics International 2018 - Volume 7, Issue - Cover3
Transportation & Logistics International 2018 - Volume 7, Issue - Cover4
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