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What Does KPMG Sales Tax Buy Mean to Small – Midmarket?

author photo of Robert Dumas

With KPMG’s recently completed acquisition of Thomson Reuters’ Indirect Tax Managed Service business (aka sales tax outsourcing), it will be interesting to see how they will serve the small and mid-market businesses.

From my vantage point, most of the vendors that provide sales tax outsourcing services focus on the Fortune 1000.  The Fortune 1000 possess significant in-house sales tax expertise and want access to a return prep factory.  These factories are geared toward automation and standardization.  The advantage is that cost is squeezed out of the process.  The disadvantage is often an inflexible process with little real-life sales tax expertise at the point of client interaction.

Thomson Reuters’ sales tax outsourcing business historically focused on the Fortune 1000.  I can speak to this because I founded the original Tax Partners business which was sold to The Thomson Corporation in 2005.  I suspect that KPMG will continue to focus on the Fortune 1000 where companies are looking for return prep and filing services in their outsourcing relationship.

This return prep and filing service works well for large businesses, but the small and mid-market business is also looking for sales tax guidance and expertise at the point of client interaction with their outsourcing partner.

With the technology and process pieces acquired from Thomson Reuters and KPMG’s depth of sales tax expertise, KPMG can make a run at the small and mid-market if they choose.  However, the way the service is delivered will need to change from a return prep factory to an off-premise sales tax employee.

Other recent “Sales Tax Outsourcing” posts by Robert Dumas:

NOTE: All blog content, comments, and participation subject to disclaimer at bottom of page.

Comments

6 Responses to What Does KPMG Sales Tax Buy Mean to Small – Midmarket?

  • Posted by hillarytin on April 2, 2012 7:50am:

    This return prep and filing service works well for large businesses, but the small and mid-market business is also looking for sales tax guidance and expertise at the point of client interaction with their outsourcing partner.-tax services Montreal-

  • Posted by sales on March 13, 2012 5:55pm:

    does the service price go up, go down, or stay the same for current customers after the buyout? and why?

    • Posted by Author photo of Robert DumasRobert Dumas on March 15, 2012 3:15am:

      This is a good question. I think this is best for one of the followers from KPMG to respond to this question.

  • Posted by Sam on March 2, 2012 10:48pm:

    As the business leader of KPMG LLP’s sales tax outsourcing service, I would like to provide some insight on outsourcing and the direction of our indirect tax practice.
    KPMG recently announced the acquisition of Thomson Reuters’s Indirect Tax Managed Service business. This acquisition provides small- and mid-market businesses, along with the Fortune 1000, the opportunity to have their indirect tax outsourcing needs met while having access to the wealth of resources that a global firm like KPMG offers. This acquisition is only one of many strategic investments in indirect tax that KPMG has made with a view to support our clients with a deep bench of professionals that have highly specialized skill sets, decades of experience and strong relationships with taxing authorities.
    Mid-Market companies currently represent one-third of our total client base. KPMG has made a commitment to Mid-Market companies through the establishment of our Mid-Market practice supported by professionals across the country – and around the world – with an understanding of the attributes that makes these companies unique and with the skills and expertise to help these clients accomplish their strategic objectives. From both an indirect tax compliance-outsourcing and consulting perspective, navigating the nuances and unique needs of Mid-Market clients is a core competency for KPMG.
    For the business we acquired, we are instituting new processes and strengthening existing controls so as to provide transparency and smoother interactions with taxing authorities, and to enhance our clients’ overall experience. At the same time, our clients will be supported by our network of state tax professionals that comprise one of the largest indirect tax practices in the industry. Thus, whether a client is a growing Mid-Market client or a Fortune 1000, they can choose to be served by a firm that can provide end to end indirect tax services as well as provide the peace of mind of working with a Big 4 accounting firm.

  • Posted by Graham on February 29, 2012 11:49pm:

    Question: How long did it take you to build your business in 2005 and was selling your business your intended exit strategy?

    • Posted by Author photo of Robert DumasRobert Dumas on March 5, 2012 4:41am:

      When we started Tax Partners in 1998 there was not a plan to eventually sell the business. As the business grew multiple companies approached us. As we evaulated Thomson's business, their technology, their strategy for the tax & accounting market, and how our business fit into those plans, we thought an acquisition would be in the best interest of clients and share holders.

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