Tax Complications of Business Acquisitions with Joe Geiger

Hosts & Guests

Meredith Smith, Senior Tax Manager, SALT

Judy Vorndran, Lead Partner, SALT

Joe Geiger, Tax Consulting Manager, Vertex Inc.


Sales and Use Tax Implications of Business Acquisitions with Joe Geiger

Meredith Smith [00:00:02] Welcome to SALTovation. The SALTovation show is a podcast series featuring the leading voices in SALT where we talk about the issues and strategies to help you make sense of state and local tax. Hello, everyone, and welcome to another episode of the SALTovation podcast. Today, we are joined by Joe Geiger, Tax Consulting Manager at Vertex Inc. Joe has been with Vertex for over 15 years. He is a lawyer and a CPA. He has his masters in tax and his masters in accounting, and he also sits on the advisory board of CPA for Strafford. So, Joe, thank you so much for being with us here today.

Joe Geiger [00:00:39] Thank you. It's my pleasure.

Meredith Smith [00:00:41] And of course, we have Judy Vorndran with SALTovation. Hello, Judy.

Judy Vorndran [00:00:44] Hello, darling.

Meredith Smith [00:00:46] So, Joe, we're going to dove right in. You've been with Vertex a long time, so just tell us how you got there to Vertex.

Joe Geiger [00:00:53] Excellent. An excellent electric utility company in the United States, was formed from the merger of Pepco and Philadelphia and commented in Chicago. And when I was there, I started paying income tax for Pepco. But then after they merged, I moved over to the generation subsidiary and became responsible for all taxes other than income, which would include real estate, personal property excise, fuel utility, gross receipts and sales tax.

Judy Vorndran [00:01:28] And then you quit

Joe Geiger [00:01:32] along the way. But it was a great little problem.

Judy Vorndran [00:01:36] Easy peasy.

Joe Geiger [00:01:39] So in many cases, actually, I worked with outside counsel to negotiate real estate taxes on the nuclear and fossil power plants because at that time, utilities were being deregulated by the states. The power plants were a big target for real estate taxes. So all the counties, municipalities, school districts, they grossly overvalued the power plants. So I used to tease my kids when we'd be driving along and see a new school and say Exxon paid for that school. So when I was there, too, I worked on various tax planning projects, compliance audits. And so I had a great experience there. And when I was there, they had used an old legacy sales and use tax system, and they wanted to get into the tax technology for sales and use tax. And we had invited some of the major players to come in and do their demonstrations and talk to us, Vertex being one of them. And I had a very good experience with the road tech sales reps and their tax people that came on site. And they had an opening a few months later and I applied for the position and I accepted it. So then I moved over to Vertex.

Judy Vorndran [00:02:53] I was thrilled about that decision for you. How well, how that subset of knowledge.

Joe Geiger [00:02:58] Well, believe it or not, they contacted me for a few years afterwards with questions. But you just can't escape and you're not in the tax world. Everyone knows everybody so well.

Meredith Smith [00:03:11] So then when you applied for that position with Vertex, what was kind of that that position that you applied for

Joe Geiger [00:03:17] at that time? Vertex was starting up their sales and use tax consulting branch. And they were looking for someone with multi state tax experience, with experience and compliance research on defense and basically just overall consulting experience. So it appeared I was a good fit for that position.

Meredith Smith [00:03:42] OK, so then is that kind of where you've stayed during your tenure with vortexes in that your title now is consulting manager. Right. So does that mean you've just kind of stayed in that area or have you kind of branched out within the vortex cloud not to be confused with the SMB cloud product that Vertex offers, but like within the Vertex umbrella?

Joe Geiger [00:04:06] Well, I basically am in the same role, except it has expanded because now I also offer support to the cloud team, the tax outsourcing group, as well as our tax software group with implementations.

Meredith Smith [00:04:20] And then what about it has kind of kept you there all these years. You have just like this incredible background, right? You've got your lawyer, you're a CPA, you've got two masters. Like, why kind of use all that knowledge and keep it with a software company?

Joe Geiger [00:04:37] Well, I find it very interesting because years ago, sales and use taxes were pretty basic. There weren't too many changes. Basically, here's the tax rate. This is taxable. This isn't taxable. And that was it. But over time, it's really evolved. I mean, the Amazon case in New York years ago, the Wayfarer case a few years ago. So you have e-commerce now playing a major part and with most everyone buying something online, now there's sales and use tax complications and implications. So you have some of the major players like Amazon, Wal-Mart, Target, although those companies need an outside firm with tax software. And in addition to just the software, they like to have someone that they can talk to regarding research, taxability, exemptions and so forth.

Judy Vorndran [00:05:30] And then also SaaS. I mean, I remember doing like Meridith years ago, starting out doing a project on the taxability of streaming of a type of downloading and then loading it right. Not even streaming out, even downloaded movies. But like, that is tangible, is it? Not many years ago she did that research on one of my first multiple state research projects as a taxability software. Right. But then all the services that go with software, i.e. like newsletter, support, group, maintenance, install, install config, you know, all that good stuff, travel, training. And I remember having to unwrap all that by line by line because as you know, software could be taxable or not to have delivered that it could be the services could be taxed. We're not spending how it's invoiced. And then whether you're the one who delivers the software, you're the one that configures the software anyway. And this is many years ago because I've been doing this for twenty six years and I remember telling my client, stop sending it via desk like you could just stop sending it via disk, we'd have it out. And a lot of places like we get it have to go on a disk. It has to be downloaded. Look where we are today. Not true at all, but the laws were ready for that. So it really made taxability very complicated for software services, managed services, all those kinds of things that we do today, the way that technology has evolved for how we use things like that. We're talking on Zoome. And you are in Philadelphia, Pennsylvania. We're in Colorado and Seattle guys. And our producers in Indiana have thought. Right. We'd be so connected virtually. But then what's the taxability of that?

Meredith Smith [00:07:09] What is it even? Right.

Judy Vorndran [00:07:11] Right. So that's interesting. So you kind of saw that because I remember thinking that sales taxes imposed on tangible personal property and certain enumerated services and you're like, I don't see those services, how do you get to this? But states took the position that they could tax it. And that was very frustrating to advise taxpayers. You can appreciate

Joe Geiger [00:07:30] them. For the most part, tax taxability is based on physical nexxus, right?

Judy Vorndran [00:07:36] Well, the taxes, but also just the product. Right. Whether or not it's enumerated. What I have thought is interesting is how I give the example. A lot of the originators, you buy a fridge and it's five hundred bucks. What kind of fridge is that? Not a very good fridge. But regardless, say it's five hundred bucks and that's why it's a wine fridge. But you need it. Well, that wouldn't be true because you wouldn't have water hooked up to it or ice. But you want to have the fridge delivered and installed in the water hooked up, but you also want them to take your old fridge away. So for like two thousand dollars, you can get the whole fridge delivered, installed and years old all the way. But now that delivery install configuration, whatever is now taxable because they bundle it all together with the price of the fridge. Now you have a two thousand dollar taxable item of fifteen hundred A services, you know, and then that has been a real swing to a lot of people that haven't realized that. Supplies the services, so I assume you've seen some of that and I think people get really aggravated about that. And General, like there's no sales tax on services.

Meredith Smith [00:08:33] Well, and similarly to that, you know, you're you know, you've kind of stayed with Vertex because it's never boring, right? You're in sales tax and there is this evolution. Do you think about that, how do you think the tax is, how do you think taxpayers perceive it? Sales tax and how do you think taxpayers understand that?

Joe Geiger [00:08:55] I think a lot of taxpayers don't really understand sales tax. I think they pretty much look at it. They get a bill, they see sales tax, the percentage in an amount. They don't realize what is truly taxable all the time. Right. And the studio is just saying that when they combine all these different products with shipping and installation, they can make the entire invoice taxable. Or if they list out the items separately, some may be taxable and some may not be right.

Meredith Smith [00:09:26] Well, and it's interesting, you know, it's one of those things you can't unsee when you start looking at it and start paying attention to it with covid. And when we've been doing a lot more mail delivery services because I'm cheap and I'm like, I don't need to pay. I was on my eight dollars now, which has become 17 dollars because someone brought it to my door. You know, we've kind of changed from that. But I'll look at it and I'll watch the sales tax calculation change as I add more things like I'll change my tip amount or and I was like, huh? Should you really be taxing my tip? That's optional. It separately stated it's not a service fee. It's optional. I could say zero. And like, it's these things and these nuances that are so strange about sales tax that once you pay attention, you can't unsee it. Or, you know, I've even had a situation where it's like a multinational, like a clothing company. I'll look at my taxes. I was like, that doesn't seem right. It's all back. And I was like, you're not charging that. Right. But, you know, who knows? Who knows with that. Well, and then have you seen Vertex has historically integrated with the really large ERP systems. And so oftentimes, you know. Those companies that can afford those large ERP systems will have an internal tax department. Do you see now that Vertex integrates with NetSuite and some of the smaller GL systems, that there is a change in the kind of consumer of the Vertex product and they're not less sophisticated because they're smart. But you're no longer dealing with like a tax manager or tax director doing an implementation. You're dealing with a corporate controller who also does payroll, who also does stuff. Have you seen your consumer change or the people who are buying the vertex product and being the central point of contact change as well?

Joe Geiger [00:11:30] Most definitely. Vertex initially started off with the focus on maybe Fortune 1000 companies and selling the software that would be on premise. And in the last several years with Cloud, Vertex has entered into that market space and is offering the tax calculation product through the cloud, as well as offering our software to midsize and smaller companies. And many of these companies have maybe one or two people in the tax department or nobody in the tax department. Maybe someone in accounting does tax a couple of hours a month to get a return on the door. So we found we had to educate those taxpayers more and guide them, basically hold our hand through the implementation process, explain to them taxability how our system is set up, exemption certificates and just basically be there for them when they have questions.

Meredith Smith [00:12:35] Right. That sounds like you're doing a little bit more education, a little bit more kind of that hand holding piece to get them in and to make sure at the end of the day, you want people to be satisfied. Customers, right. Just no different than any other business. Right. You want your customers to be happy and trash you on Yelp or Google or whatever. Right. So I think that's it's it's really interesting. And we've appreciated the expansion of product offerings to make sure that we find the best fit for a service offering for our clients because its sales tax is real. It's gotten national attention thanks to Wayfair. So have you found that the vertex phone is ringing more since June? Twenty first twenty eighteen and our friends at the Supreme Court with Wayfair,

Joe Geiger [00:13:29] I can honestly tell you the week after the decision, we had about seven hundred inquiries. Wow. And mostly smaller midsized companies asking do we have Nexxus now? Do we have to get registered? We have to start to collect. How do we do it? We have one warehouse, one office and one location. And now you're telling us we might have to be filing in numerous states? We don't know the tax laws in those states on the tax because we calculated what the rate is. So, yeah, I mean, that was a lot.

Judy Vorndran [00:14:04] How did you guys ingest that? Were you ready for that kind of demand?

Joe Geiger [00:14:08] We were probably not fully. Yeah, because, I mean, you came kind of quick and all at one time and we just started to ramp up our sales force to accommodate the increase in inquiries and sales opportunities.

Meredith Smith [00:14:26] Yeah, well, and so I want to kind of shift from king of the sales tax side to this other piece of what you're doing is on the advisory board for Strafford. You two are presenting a course in April. And it is called What Correct Me If I'm Wrong, sales and use tax implications of business acquisitions. You know, just specifically to that, who do you think your audiences for that specific topic and then as an advisory board, why did you think that was an important topic to speak on?

Joe Geiger [00:14:56] Our important topic? Because there seems to be a huge demand now for growth in companies and most often it's done through a merger and acquisition. I saw that excellent after that big merger there between the Pecan came in and they also started to acquire utility plants in other states with deregulation. So they had plants in Texas, Indiana, Massachusetts, New York, Virginia all over the place. And many of those states weren't really ready for deregulation of the utilities.

Judy Vorndran [00:15:31] And so what did that mean, do you think? I mean, in terms of the drag and then why you got a good business in a state. There's enough demand to service it. Why buy another one? Right. Why do you think that that happened?

Joe Geiger [00:15:43] Sometimes it's hard to enter a marketplace if you don't fully understand the market. So if you have a company that's already established in a market, you know what you're getting for the most part, you know, the people that have been there for a long period of time, the relationships they have built, how their systems work so many times, it just makes sense to acquire a company as opposed to going in new into a new territory.

Judy Vorndran [00:16:11] Well, sure, I agree with that. But why even bother right now? Just stick with what you got. Keep your own market. Why add more, right. What value are companies bringing to that? And then you're going to have a disparity of how things are run. Those are the challenges, I think, from assimilating a different culture into a you know what I'm saying, different cultures and all that good stuff.

Joe Geiger [00:16:32] Sure. I mean, there's obviously a lot of challenges when you merge two companies together. I mean, everything from the work culture systems, I'll say the level of experience of the people. But again, if you look at is it easier to start up a company or to acquire one or if you have a company say, hey, I'm pretty comfortable in my marketplace, sooner or later you're going to start losing market share because other companies are going to pass you by. Yeah. So you want to be on the forefront and be a leader as opposed to sitting on what you have and being happy.

Judy Vorndran [00:17:09] So that's why it seems important. I got that makes sense to me.

Meredith Smith [00:17:12] One depending on the size. And I think I'm familiar with ComEd because I grew up in Illinois and they were our power providers or whatnot. But some of these publicly traded companies, it's like, hey, I have an obligation to my shareholders to grow my profit line. And what's the best way to do this is that it's expanding into new markets. Is it doing some home grown stuff? And so some of the growth pieces just come from what's the best and fastest way to do that? You know, with obviously some no acquisition is ever easy, but is it short term sacrifice for a long term gain? And I think often you see that right. Because even Judy, in the Denver marketplace, I was thinking as Joe was talking, we've found, you know, over the last couple of years even that Denver's had this incredible system of growth. Right, with companies moving in. And we've seen kind of like large West Coast California based CPA firms even come into the Denver market and try to buy local practices to build that presence in Denver. And so it's like this is the best way to get there versus starting from scratch with a name that no one knows. And at least you're coming into a market where you're buying clients in a relationship as long as you can keep those people. And there is that cost benefit piece. Are you going to come in and shift culture such that your key people drive out, you drive those people out and they take their clients with them, and then even you all will be talking with this business acquisitions piece about various implications of tax rate and specifically for sales tax. Can you talk about some of the things that you're going to talk about specifically within this kind of training class?

Joe Geiger [00:19:01] Basically, what we'll focus on will be the implications of sales and use tax for merger and acquisition. I mean, there's a couple major ways to acquire a company, either through a stock acquisition or an asset sale, and it has different tax consequences. I mean, if a company is going to acquire the stock of another company, they're also going to inherit any tax liabilities or exposures from the past with an asset sale. You're going to avoid any of that. So it depends how the deal is structured, could have a significant impact on tax exposure and also to it with a merger and acquisition. You need to do your due diligence and make sure that the target company is compliant and up to date with all their filings, their taxable determinations, where they stand with the audit. So there's a lot to think about for a merger and acquisition, because there's so many different things that could go wrong and sometimes I'll actually do a deal or even kill a deal.

Judy Vorndran [00:20:10] I've seen situations where the sales tax has really been an afterthought. And I don't know if your perception, Joe, since Wayfair, it's got more prominence. But I would say over the years I feel like it's the day before, oh, we forgot about this or oh, we're buying the assets because we didn't want to take on any liabilities or whatever. But we did know that sales tax follows an asset sale. I think people really don't know that. The legal community doesn't seem to know that or like the bulk sale laws versus not having a bulk sale on a state when you're buying all the assets of the business. I think people think it's a trap. Given that I work in this field, I'm like, how do people not know this as a legal community advising a buyer? But they're more worried about the numbers and the deal and whatever the T's and C's. And then all of a sudden it's like there's a sales tax accrual you should book. Oh, you know what? What is your experience there, Joe, on that?

Joe Geiger [00:21:07] I agree with that. Sales tax is typically an afterthought. And many times, because one is viewed as a pass through tax and to the numbers generally not as large or the liability as maybe an income tax liability.

Meredith Smith [00:21:26] Well, and you find Joe within the vertex system that you have existing Vertex clients who have then since bought a company in their leg, OK, well, they had no system. Now we need to bring them into ours and kind of integrate with Vertex. Do you get kind of a lot of, like, kind of license expansion from companies buying other companies and like trying to integrate them into their sales tax software? Because obviously, if they're an existing integration sales tax system customer, they know that sales tax is a thing and exists and they've got a piece on the other side. Do you find that you get expanded work because of those acquisitions?

Joe Geiger [00:22:12] We do. We find out we get a lot more opportunities when there's a company that is using Vertex that is acquiring another company that is not using Vertex because the company using Vertex is really a very satisfied user. And it's easy for them to integrate the company they're acquiring into the vertex system

Judy Vorndran [00:22:34] is that it becomes an issue, though, with the system, the connector focus. There are other providers that have been connected. You guys have been, I would argue, substance focus at high and more robust general ledger systems and so forth. Focus Fortum one thousand. But then you've got these other small companies you could acquire that could be cookbook's, right. Or a small to mid tier system. That's good enough honestly for their business. And I know Vertex is integrating with cookbook's now for the last couple of years, but has that ever been like a problem for you, where you've got a company acquiring a smaller company that doesn't have an SAP or an Oracle or JD Edwards, and then that's a problem for them to push them to the to the vertex product?

Joe Geiger [00:23:15] I wouldn't say it's a problem. I'll call it a challenge, OK? I mean, basically, in the past, Vertex has built very well constructed connectors for the Oracle SAP, JD Edwards. Right. Most recently, we've expanded into building more connectors for some of the other smaller ERP systems.

Judy Vorndran [00:23:39] Right. And even the e-commerce like Magento and so

Joe Geiger [00:23:42] on NetSuite and companies like that, we've expanded into that area to make it easier to integrate.

Judy Vorndran [00:23:48] Right. But before that was the case. Right. How did Vertex overcome those obstacles? Did the purchase company assimilate into the purchaser's GL's provider so that they could do the sales tax Conexion they already had?

Joe Geiger [00:24:06] Well, that would depend. I mean, because sometimes with an acquisition, some companies are going to move off their systems to the acquiring companies. Other times they're kept separate for numerous reasons. Yep. OK, in those cases, Vertex would sometimes work with our consulting firm. Right. Or other consulting firms to build a connector.

Judy Vorndran [00:24:29] Yeah, because that's been my experience like the past over the last twenty six years. What would happen with some of our clients that didn't have a built in integration because of the choice they had? We would build something with a vertex engineer that would allow the two systems to talk to one another so that they could get sales tax on the invoice properly because it wasn't native to the system. And that's the case with the leasing industry that you guys specialize in and some of the telecom and stuff and lodging and all that. That Vertex has a lot to build out for that's already sort of set up all the rates and rules and the answers that are needed by jurisdiction. And then you just have to make them connect. And that's the world I grew up with, there wasn't a connector. So you had to build it sometimes. Now, there are some things that just could be added to because a technology already exists, right?

Joe Geiger [00:25:15] That's right. Now we have many more pre-built connectors right in place. So it's a much easier transition.

Judy Vorndran [00:25:21] Yeah, it's interesting, isn't it? Even though I always feel like the cost, I always tell clients like, so if you have a ten million dollars of revenue, you need to manage or not manage eight million eight hundred thousand dollars attacks. Tax eight percent of a million. Right. Is that eighty thousand? Eighty thousand. But still a lot. Right. So a lot of clients will say, well, we're all resale or we're wholesalers. It's like you still have to manage those certificates and know what your buyer is and document it properly. So you're still managing it even if you're not collecting it. And I think it's a no brainer. You have to have a sales tax system. You can't manage the rights and rules yourself. But there is kind of a perception in America, I think, that it's not taxable. I don't have to worry about it. Right. But they don't get the docs and because they don't get audited, they don't value automation like they should until they get beat up by an audit jurisdiction. Right. So it's an interesting thing about which customers understand the value and have been bitten by the tax bug or sort of minimize that thinking. Well, I've gotten away with it all these years. Why bother, right, so it's to understand how to explain to people the value of automating, which is quite honestly, I think, huge to remit tax and thirteen thousand jurisdiction in America, even if you're getting it to Texas. Right. To put it in the right buckets of Texas. So what are your thoughts about that?

Joe Geiger [00:26:40] That's true. I mean, obviously, working in Vertex, we're always promoting tax automation. Yeah. Because, I mean, that's the way the future I mean, it also allows you to not only calculate the tax correctly, but generate reports. Right. You could do analysis work. Yeah. If you have an audit, you're easily able to give access to different reports to the auditors. Yep. And just makes life so much easier.

Judy Vorndran [00:27:07] Well, I also argue it's good for income tax apportionment because you can see your transaction details by state. So it actually adds a lot of other value aside from just the reporting. But I have people who say to me, well, I'll just put the rate on the invoice. I'm thinking, you can't pick one. Right? Right. The rates vary by jurisdiction because of the localities. And there's and that I think it's all fine and good. If you want to say it's eight point seventy five in Austin and point to five in Dallas, good luck filling out your returns every month, right? Yeah. Interesting, isn't it, to get people over that hurdle and educate them so that they understand the value of the process?

Meredith Smith [00:27:42] Well, and I think that's a good kind of segway into kind of the last question that I want to ask before we kind of wrap up and go to what I like. More fun, Rapid Fire, get to know your personal questions. Where do you think the future of sales tax automation is going? Because we've been on some kind of advisory board calls and whatnot, and they're like, OK, well, Wayfair is almost three years old and isn't everyone integrated and whatnot. And in our mind, we're like, you know, our phone is still ringing. I would imagine it's the same with Vertex. So where do you think the future is with that?

Joe Geiger [00:28:19] I think automation will be prominent in the marketplace. And I say that because now so many more companies are multinational or global companies. We're working with an automobile manufacturer who's based in the US and has expanded operations into Canada, Canada, Mexico or Central America and are selling in those markets with VAT. We also need to be able to calculate that tax for them. Right. And they like to be able to go to one company that can do sales tax and VAT tax. Yep. So Vertex has really expanded their presence in Europe and Central America, Brazil, to help these companies make it easier for them to centralize the tax rate calculation and process an appliance in one area.

Judy Vorndran [00:29:12] So we have medical marijuana here in Colorado which is the first state to allow it. And that money is uploaded daily like you don't it's just there. The government gets the tax immediately. Have you guys been talking at Vertex about that ability to give the state the money the second the transaction occurs or thereafter? Has that kind of been something on the forefront of our Texas mind?

Joe Geiger [00:29:34] Yes, because I'm guessing maybe two years ago, Vertex had worked with a company in Spain because Spain was going to require the basically remittance of the tax at the time of the transaction. Yes. So I think that something at some point is going to come to the United States. The tax we swapped out of the company's bank account daily,

Judy Vorndran [00:29:58] because that's the way I just think of the fact that we're doing that on our medical marijuana system, that costs like twenty five million to build here in Colorado. But it's an immediate transaction. The state gets that money right away. And if that can happen for pot taxes, I think it can happen for other things, too. So I think well, I just think what's very interesting about tax that's been fascinating over the years is we used to do it on coupon books. I mean, I filled out coupon books. I remember sticking on the copy machine, they didn't fit the check and then going to the post office and hand delivering those and making sure they were date stamps. So they were timely filed. I mean, that's how manual that process was. Right. And now they're electronic and that's A.S.A. and you can do it online. And I mean, we've seen a lot of transition from a money movement and filing standpoint over our careers. I don't see why that can happen. I mean, shoot, I don't know if you have Venmo or Zel. I mean, I can send money to mirror that today from my bank account via Venmo if we're connected on that app. So that's kind of fascinating. I mean, PayPal was kind of revolutionary when they came out many, many years ago. But that was kind of a big way to move money. So I think there's a lot of changes that we'll see in our careers over the next ten years easily.

Joe Geiger [00:31:11] I definitely agree with that, that automation will help. Right. And I think technology will help with the remittance of the tax. I mean, right now, most states have. Out on the 20th of the month, so you're holding that money and then renting it, and many times they're not operating efficiently and are unable to remit their taxes timely because using that money they collect for other purposes. Yes. That can be done for them.

Judy Vorndran [00:31:41] And so now I had a client one time saying, but I had to pay their electricity bill. And I said, you can't use transfer taxes for your personal bills as a business. It's a tax that the government it's not give you, but you collect in your old bank account. So you're exactly right. You don't know, especially as a small business like what's what. Right. You kind of know, but you got all this money in your bank account. You don't realize where it's going. Yeah. Big interesting issue, isn't it, that we'll be seeing over the years that automation is on the way to solve that?

Joe Geiger [00:32:10] In my mind, I also think because most transactions now are done with the debit or credit card. Right. A little cash involved.

Judy Vorndran [00:32:16] I know the debit. I still don't really use my debit card. I mean, I'm a credit card girl. I don't know. I just pay it off every month. But my son, when he got a debit card many years ago, said, Mom, I got a late fee because I used my debit card. Well, you didn't have any money in his bank account to pay for it. So I said, honey, a debit card is cash. Basically, it's just bioplastic. Oh, I thought it just meant I could put things off and not have to pay for it. He just didn't get it. But he does now, of course. But then he got late fees and all that good stuff. But he was more adaptive to that technology than I was, you know, I mean, I try not to do checks anymore, but I do eat payments. But I used to put a stamp on it, saying my bills write very different world words today than what I was at when I began my life. I mean, I barely balance my checkbook now because it's all online.

Meredith Smith [00:33:07] I think going back to like the kind of the trust fund component of it, it's like you've got some filers who are quarterly or annually and even like the systems. We had a client, Judy, who was an annual filer somewhere and all of a sudden had to admit at one hundred and fifty grand. And they're like, oh, well, I wasn't like I kind of forgot about that. Good thing I had that cash. But like, if all of this money kind of hits your bank account and you're not good at it's the same bank account. You know, if your sales tax collection isn't hitting like a different account or whatnot or you're not walking, you don't have. All right. You're not watching your pay. Well, all of a sudden you're like, oh, that's not good. So interesting. Yeah, I think, Joe, I totally agree with you that I think the automation piece is always going to be there. It's never going to die, particularly given the expansion of products. Mexico just legalized marijuana the other day. So, yeah, I think we're right there with you.

Judy Vorndran [00:34:02] Well, and I guess I just want to say it just in lieu of what you do, Joe. And automation, like, do you think automation is going to replace people? Yes.

Joe Geiger [00:34:10] Or not? Not fully. I mean, people are always going to have to be involved because there's going to be set up decision making. But automation will make people's jobs much easier.

Judy Vorndran [00:34:23] Yeah, I agree with that because I think there's a bit of a push to pull it off to be like we try to figure out where you are, who you are, what do you need to do now? Automate that right. But things change, right? Oh, let's add a new product. Oh, let's add this as well. Oh, let's acquire this company and pull them in. There's a human part. You can't just automate that. Right. You have to figure out how to pull that information in tax that appropriately puts it in the right places. So you're still that human element with automation. Push, pull that. I think a lot of things, you know, still give us a great career without having to fill out a bunch of coupon books.

Joe Geiger [00:34:59] That's true. And actually, Vertex is really moving into machine learning and artificial intelligence or internal processes to make our work easier. Right. And when you look at things like if you're on. Amazon or Wal-Mart website? And Google. Yep, all the algorithms that are giving you the pop ups surveys because you bought this, maybe you'd like this. So I think the volume of information is just going to be never ending.

Judy Vorndran [00:35:33] So do you think that this is common? I have a client who bought a software system for their exemption certificates, while the way they set their clients up in that suite was a certain character delineation. And then the certificates looked different, by the way. So they don't match. And the machine learning needs to know there's no comma there or missing the LLC or something. But if it doesn't know that, it just says, nope, no good BEDSER. Right. Even though it's a good enough cert, it would work for an audit. How do you think Vertex is working to enhance that, that character typing issue that companies run up against? They don't think about that with automation.

Joe Geiger [00:36:11] Well, one thing with machine learning is the more information you feed into the system, the better answer you're going to get. OK, so if a company were to put an exemption certificate and for some reason doesn't match up with something. Yep. Once they put it in two or three times, the machine is going to learn that the exemption certificate's allies line matches up with this particular customer or transaction.

Judy Vorndran [00:36:39] Right enough right enough information without being an absolute like you didn't need the exact character boxes. Yeah. So I think that's an interesting thing. I mean, that's the part where humans unfortunately need to overcome some of that because of the machine. Learning is not all intuitive there or you don't give it enough information. It's just going to time it out and say, no, we're not going to accept this document, even though if you look at it as a human, you're like an otter would accept that document, but the systems don't talk to each other. Right. So that's an interesting thing that I think humans still struggle with, especially when you gather exemption certificates because customers set up and pose. Nobody types everything accurately. It's just not the way it works.

Joe Geiger [00:37:17] So if you go back many years ago, would you have clients pulling out boxes and boxes, records?

Judy Vorndran [00:37:26] Oh, yeah, I had a client that had a folder ABCDE on their desk and all of them were slid underneath the file like, OK, great. So so-and-so needs to go to that desk and pull that a level up, go through all the certs and figure out if they've got the right one because it's not in its system. It's just paper.

Joe Geiger [00:37:46] Yeah. When I started in public accounting , I viewed it as a punishment.

Judy Vorndran [00:37:52] Oh yeah. Going to your job puts you all dirty. Now I remember that being a huge issue at Deloitte was trying to manage people's certificates because clients had like hundreds of thousands of certificates and their paper anyway. All right.

Meredith Smith [00:38:08] All right. So as we are not machines, we are still humans and we are still doing human tax work. We're going to get to know Joe the human and if you have a little kind of rapid fire question and then we'll end it. So are you ready, Joe? All right. What are you reading right now?

Joe Geiger [00:38:25] Tax laws so much each day. I really don't read much else.

Judy Vorndran [00:38:34] It's funny. I kind of feel the same way sometimes. You know

Meredith Smith [00:38:38] what? I'm not sure how much driving you're doing, but when you do drive, what do you listen to in the car?

Joe Geiger [00:38:44] I to basically classic rock probably from the 70s, maybe early 80s around the A more recently, I'll call it modern country music, modern country. Yes, it's sort of like Lou Combes. OK, that's it. OK, so that was my top country, really.

Judy Vorndran [00:39:05] Yeah, yeah, yeah, yeah.

Meredith Smith [00:39:06] OK, what is your favorite movie? This is my favorite question. What's your favorite movie?

Joe Geiger [00:39:11] Caddyshack. Yes, I love it. I love that movie. Watch movies multiple times because I think once I see it, that's good. But that's one movie that I cannot just watch over and over.

Meredith Smith [00:39:24] Oh, I love Bill Murray in that movie. Oh my God. Everything about it is just quintessential eighties

Joe Geiger [00:39:31] and

Meredith Smith [00:39:33] yes. Coffee or tea or none because we've learned some people don't drink either. And how do you take it?

Joe Geiger [00:39:40] Actually, I don't drink coffee or Tea Party. As a matter of fact, about two years ago I was in California with a client. I got a latte and my friend said, well, that's not real coffee.

Meredith Smith [00:39:53] OK, so then you do have some sort of caffeine consumption. It is just not as espresso. It's espresso with milk.

Judy Vorndran [00:40:02] Espresso, not coffee. OK, all right. Whatever. I drink espresso too. So I didn't realize it wasn't coffee though, but OK,

Joe Geiger [00:40:11] so that coffee and steroids.

Meredith Smith [00:40:13] Right. We can modify this question on a go forward basis is what your caffeine consumption is.

Judy Vorndran [00:40:18] Yeah. There you go.

Meredith Smith [00:40:19] Because we have a lot of drinkers.

Judy Vorndran [00:40:21] Red Bull vodka. I remember going to a party and somebody was drinking Red Bull vodka. I'm like, that's a dichotomy of drinking down.

Meredith Smith [00:40:27] I don't get to represent diners, but I'd be a little more conservative for drinking Red Bull and vodka to wake up in the morning and go to work. But that's pandemic time still. So, you know, sometimes it's whatever gets you through the day. All right. And our last question, Joe, is what are three words or phrases that a family member would use to describe you?

Joe Geiger [00:40:47] First, they say crazy. I have three young adult children. So, you know, when I say something, they're saying, Dad, you're just crazy. You're. When I say that it costs too much, I'll say, no, you're just little things have changed. They cost more. You're old fashioned.

Judy Vorndran [00:41:08] Oh, I love it's OK. That's one word. No more. That's old fashioned crazy.

Joe Geiger [00:41:14] No, they actually think I'm quite funny.

Judy Vorndran [00:41:18] Oh, passionate and funny. I like it.

Meredith Smith [00:41:21] You do like the movie Caddyshack so I can get on board with that. Yeah, well appreciate that.

Joe Geiger [00:41:26] I mean, one of my daughter's friends the other day asked me to give the toast at her wedding when she gets married. It's kinda different.

Judy Vorndran [00:41:34] That's a compliment.

Joe Geiger [00:41:35] Yeah, I took it as one.

Meredith Smith [00:41:38] Right. Well, Joe, thank you so much for being with us here today. We really appreciate your insight and just this conversation and we'll look forward to you. Judy speaking again together in your Strafford presentation, this has been another episode of the SALTovation podcast. I'm Meredith Smith. Until next time, this podcast is for educational purposes only and is not intended, nor should it be relied upon as legal tax, accounting or investment advice. You should consult with a competent professional to discuss specifics of your situation and the applicability of the information presented.

Questions asked and answered in this Episode:

  • How did Joe get his start at Vertex, Inc.?
  • What has kept Joe at Vertex, Inc.. all these years? 
  • How does he think taxpayers perceive sales tax?
  • Has he seen a change with the type of consumer?
  • Has he seen an increase in inquiries since the Wayfair case?
  • What will be talked about at the upcoming event, Sales and Use Tax Implications of Business Acquisitions? Why is this an important topic to speak on? Who is the target audience?
  • Does Joe recieve work from companies that have bought another company?
  • Where does he think the future of sales tax automation is going? Does he think automation is going to replace people?

What You Will Discover:

  • [00:45] Joe’s career trajectory
  • [04:21] What has kept Joe at Vertex, Inc. all these years
  • [08:47] How he thinks taxpayers perceive sales tax
  • [10:28] If he’s seen a change in consumers
  • [14:26] More on the upcoming event on business acquisitions
  • [21:26] The challenges with acquiring other companies
  • [27:56] Joe’s thoughts on the future of sales tax automation
  • [34:02] If he thinks automation will replace people
  • [38:08] A few fun facts about Joe


  • “I think a lot of taxpayers truly don’t understand sales tax. I think they pretty much look at it. They get a bill. They see sales tax, the percentage and the amount. They don’t realize what is truly taxable all the time.” – Joe Geiger [08:55]
  • “Is it easier to start up a company or to acquire one? Or if you have a company say, ‘Hey, I’m pretty comfortable in my marketplace,’ sooner or later, you’re going to start losing market share, ‘cause other companies are going to pass you by. So you want to be on the forefront and be a leader as opposed to sitting on what you have and being happy.” – Joe Geiger [16:45]
  • “There’s a lot to think about with a merger and acquisition because there’s so many different things that could go wrong, and sometimes it’ll actually delay a deal or even kill a deal.” – Joe Geiger [19:56]
  • “I think automation will always be prominent in the marketplace.” – Joe Geiger [28:19]
  • “One thing with machine learning is the more information you feed into the system, the better answer you’re going to get.” – Joe Geiger [36:11]

Relevant Links:



Learn more and register for Sales and Use Tax Implications of Business Acquisitions: