Michael Fleming Biography
The sales tax world was turned upside-down since June 21, 2018, when the Wayfair decision was made by the Supreme Court. This is because the Supreme Court ruled that one does not need to have a physical connection with any state before they can be required to collect sales tax.
So what impact did this ruling have on the administration of sales tax? Host Michael Fleming has all the answers.
Michael is the founder of Sales Tax and More and is one of the country's leading authorities for state tax issues like consulting and research, registrations, returns, nexus, drop-shipping, eCommerce, and service providers. He is a writer, speaker, and regularly puts on webinars.
Dr. Jeremy Weisz joins Michael Fleming to learn more about Michael’s financial and tax background, how the Wayfair decision impacted his business, and his future plans for this podcast.
Here’s a glimpse of what you’ll learn:
Why Mike Fleming started this podcast
Mike’s background
Mike's first career in Wall Street and his mentorship experience
Working in commercial real estate
Mike's experience from working in the financial sector
How Mike got into sales tax
Mike's decision to start his own firm
How the South Dakota vs. Wayfair decision impacted Mike's business
Other stories Mike will share on this podcast
Resources Mentioned in This Episode
Connect with Michael
Sponsor for This Episode
Sales Tax and More assists companies and their trusted advisors like CPAs with sales tax needs. They offer consulting and research, registrations, returns, and so much more. Over the years they have assisted thousands of sellers both foreign and domestic with their tax issues in the United States and in Canada.
Episode Transcript - Audio Version
[0:10] Intro: Welcome to Sales Tax and More, your go-to resource for all things state tax-related. Now, here's your host, Michael Fleming.
[0:26] Mike: Hi, Mike Fleming here, I am the founder of Sales Tax and More. I’m today's host of the Sales Tax and More Podcast, where we talk about everyone's favorite subject, which is, of course, sales tax. So I have Jeremy Weiss with us here today. And he's done thousands of interviews with successful entrepreneurs and CEOs. And today we're flipping the script instead of me interviewing Jeremy, Jeremy is going to interview me now.
[0:57] Jeremy: Mike, thanks for having me. And I just want to give a brief introduction of you. If you don't know, Michael Fleming and his company, he's considered one of the USA’s leading authorities when it comes to sales tax. And the episode's brought to you by Sales Tax and More, and they assist companies in their trusted advisors with their sales tax needs. And they offer consulting and research, registrations, returns, and much more. And over the years, they've assisted thousands and thousands of sellers, both foreign and domestic with their tax issues in the United States and Canada. You can check out more at salestaxandmore.com for more information and check out more episodes where he talks about some cautionary tales, some interesting case studies. And so Michael, this, you know, we want to talk and tell people about why you started the podcast and what's the show all about. And we will talk about Michael, his background. And he's seen some really, really interesting stories. So stay tuned for that. But Mike, tell me, why did you start the podcast?
[2:01] Mike: Well, the main reason is the sales tax world has literally been stood on its head since June 21, when we had the Wayfair decision come out from the Supreme Court. And the Supreme Court basically said you don't have to have a physical connection with any of these states before they can require you to collect its sales tax. And that's taking so many companies and so many CPAs and other accounting professionals by surprise. My goal is to help educate people on to what they need to do, why they need to do it, and what they need to look out for. So our target audience - really CPAs, other accounting professionals, and really anyone. I mean, if you're selling, you know, online, if you're an eCommerce seller, or you know, some of this, you've been exposed to it, but a lot of companies you know, traditional brick and mortar type companies, don't realize that this applies to them also.
[3:05] Jeremy: Yeah, so you'll cover a wide range of topics kind of related to sales tax.
[3:12] Mike: Absolutely
[3:13] Jeremy: So, let's give me your story a little bit. You have an interesting background. Just start off, you know, you didn't have a normal commute to high school.
[3:27] Mike: Not at all, I grew up in a city or neighborhood called Rockaway Beach. And it's part of New York City, but it's way far out. It's about 26 miles to Manhattan as the crow flies. Now, to take buses and trains, especially back then, it was a little bit different. So I went to Xavier which was a military, Jesuit High School, all boys. And went there, was on 16th Street in Manhattan, and it took me about an hour and a half to get there. And, you know, I played all sorts of sports in high school. You know, rugby, wrestling, basketball, football - you had to get up early in the morning to get there. Sometimes we were running in the morning and, you know, we do practice in the afternoon. So I'm leaving the house, you know, anywhere, you know, 5:30 - 6 o'clock in the morning, not getting home at night till nine o'clock. Which, people hear that and they're like, “Are you out of your mind?” You know, I guess I was a little bit, but I was very active in the sports. It was a really good school. And I think that that's where it really gave me a lot of my work ethic that helped me be successful in later years.
[4:50] Jeremy: You were recruited for football. What position did you play?
[4:53] Mike: I played both ways in high school in college. In college, I was recruited as a nose guard. So, I found out that was a little bit too much like a job. And I was also recruited to wrestle. And I transferred my sophomore year to Hofstra University from Southern Connecticut University and wrestled for them they were division one wrestling school, very good programs.
[5:26] Jeremy: Wow, that's intense, actually. Some of the toughest people I know are wrestlers, for sure. You grew up in an interesting area too.
[5:39] Mike: Yeah, Rockaway Beach. By the way, I transferred to Beach Channel High School, my junior year, because the football program at Xavier, which is the school in Manhattan, was dropped a division, there were going to be fewer scouts there and you know, I was planning on going to college on a football scholarship. So, this neighborhood, this local high school was about 20 minutes. Had girls in it, big win there, right away.
[6:07] Jeremy: Teenage boy, yeah, all boys school it's, yeah.
[6:12] Mike: But right across the bay is where, is a neighborhood called Howard Beach, and back in the late 70s, early 80s that's where John Gotti and a lot of the other, you know, organized crime mafia types lived and all of their children came to school at my school. So lots of interesting stories. Some of them would probably have to talk about another time. But it was definitely an experience growing up.
[6:47] Jeremy: Yeah. I'm holding back asking questions about it because I don't want you to get in trouble naming names, but I'm sure there were some crazy stories from that time. So fast forward a little bit. Mike, you know, you . . . what was the first career?
[7:04] Mike: I started on Wall Street in 1986. So that is where I've really spent a lot of my career is either on or around Wall Street. So very, very interesting. You know, I was in their training program and actually got all my licenses the week of the crash in 1987. Not good timing there. But again, I, you know, the work ethic from just you know, traveling that much. I'd get in early, I was the first one there, last one to leave, and I came to the attention of, you know, some of the higher-ups you know, like, Mitch Rosenthal took me underneath his wing and he really was very influential on my entire career. And then other people like. . .
[7:54] Jeremy: What did Mitch do?
[7:57] Mike: He just, he taught me the business. He told me about life. I mean, he was really a great mentor for years. And, you know, when Mitch moved to Dallas, that's how I ended up in Dallas. They asked me to come down and work in Dallas with them for Bear Stearns, and I eventually ended up doing that. So I'm very, very thankful to Mitch for a lot of reasons. You know, Dallas, you make the same money in Dallas, as you did in New York. Only the cost of living was so much cheaper. So New York, love New York, my whole family's up in New York, go back and visit whenever I can. But after being here in Dallas, you know, I may not always stay in Dallas, but I'm never going back and living in New York.
[8:47] Jeremy: And then another mentor. Mitch, you had Jimmy Cayne.
[8:51] Mike: Well, Jimmy, I don't know if I'd call him a mentor or not. But, you know, back then he had the lights out in his office all the time. Jimmy eventually became the CEO of Bear Stearns. But back then, Ace Greenberg was the CEO, and you only get called into Jimmy's office, he had a big corner office lights are always out, and you only got called in there to talk to him. I mean, it wasn't always the most friendly people. Everyone was always afraid of him. But because I was there so early all the time, he'd stop by and say hi, and, you know, we’d meet in a bathroom, we’d strike up a conversation, so I had a little bit of a different relationship with him than most people at that time were thinking. So, I don't know if he would remember my name.
[9:44] Jeremy: His nickname?
[9:45] Mike: I’m sorry?
[9:46] Jeremy: His nickname?
[9:46] Mike: No, I don't know. Oh, Darth Vader. Yeah. So they referred to him as Darth Vader, Star Wars, you know, still big in everyone's minds. And you know, he was just you know, feared. But I always had a different outlook just because of my interactions with him.
[10:02] Jeremy: So after Wall Street, you did commercial real estate?
[10:08] Mike: Yeah, absolutely. We had all of our clients and we were, you know, heavily invested in healthcare stocks. And at that point, Hillary Clinton had a health care plan. And when Bill Clinton won the debate, George Bush lost and at that point, everyone knew that, okay, we're getting a new president, we thought that stocks were going to zero. And he'd absolutely, inflation was going to go through the roof. And, you know, it was just going to be terrible for any type of equities and hard assets. That's where you needed to be - real estate. That's where you needed to be. So about five or six of us left, including Mitch, you know, my mentor at that point, and we went out and started putting together real estate investments that we were selling to institutions and, you know, large pension funds. But boy were we wrong, I mean, real estate did well, but the stock market went straight up. Bad timing on that for stocks, but it was very very, it was very, very rewarding being in creating these securities and gaining a whole new type of experience, which we then leveraged and got into mortgages. So we were putting together pools of mortgages, buying them from, you know, small brokerage firms, larger brokerage firms, putting them into pools, and then again, selling them to Wall Street. So that's the, you know, the gist of how my career has evolved. A lot of it has been on the financial side, so.
[12:01] Jeremy: What did you, what did you take from that experience? What did you learn from being on the financial side?
[12:06] Mike: A lot of pressure, you know. You know, there were so many variables that you didn't have control over. I mean, the market dictated a lot of this. So you could be very successful, do everything right, and still be wrong. So a lot of unnecessary stress. And, you know, a lot of people find sales tax stressful, I actually find it very relaxing compared to some of my earlier days. My earlier days, once again, you know, have trained me very well.
[12:44] Jeremy: So how did you get into sales tax?
[12:46] Mike: Yeah, that's a great question. I don't know of anybody who says, you know, when I grow up, I want to be a sales tax consultant or sales tax analyst. I mean, I've never heard that in my entire life. We all just sort of fall into it, you know, and no different for me. I started having to do some of the different taxes associated with the, you know, whichever business we were involved in at that point. And I started liking it and said, “Hey, I wonder, you know, if there can be, you know, a career in this.” I still wasn't sold on the idea. And an opportunity came along, and I was able to get involved. And that's when I really started, you know, I get bit by the bug as people say, and I couldn't get enough of this. I wanted to learn everything. And that's how we are today. And you know, it's like most people late, again, most people fall into sales tax and then they get bitten by the bug. Some people fall into it and hate it. They can't wait to get out. Or the people get bit by the bug and they live and breathe in you know, sales tax. And I'm sort of the latter.
[14:02] Jeremy: What is it about it that, you think why you got bit by the bug? Is just you're detail-oriented? What about your personality you think attracted you to it.
[14:10] Mike: I like new challenges all the time. And you know, every day we get to speak to people, you know, some of the issues are the same, but their fact patterns are different. So every day we hear new stories and how we can help people. And you know, when you're creating securities, yeah, people can use security. Yeah, it creates liquidity. There's a purpose for everything I've done in my life up to that. But this is where we really get to step in and help someone and people tell us, thank you. And it just feels good knowing that you've saved someone from the bad old state, or you help them figure out a way so that they don't become a target of the bad old state. It just, it's a totally different feeling. And like I said, no stress. I mean, yeah, it's stressful when you talk to these people, but you're generally helping them realize there's light at the end of the tunnel. And then from a business perspective, it's not cyclical. I mean, yes, states do this, states do that. But when times are good, people are out there and they're selling more. So they need, you know, services like those we offer. And when times are bad, states are hurting. And what they do is they go out and hire a whole bunch of more auditors, and now the auditors are auditing more companies. And again, our clients need our help. So there's really not a lot of ups and downs, you know, in this type of business, which, heck that's t where a lot of the stress comes in on the other side.
[15:51] Jeremy: So what did you do first, for your career, in the tax world?
[15:58] Mike: I was a, well, you know, just for the different investments and everything that we were working on, there were taxes that had to be paid. But as far as getting into this as a full-time basis, there was a CPA firm out there who had done nothing but sales tax for 25 years. And I had the opportunity to go work with them. And for the better part of a decade, I was a director with them. So it really helped hone my skills. I learned a whole lot there. And that's where I came to love what I do.
[16:39] Jeremy: You decided to start your own firm.
[16:44] Mike: Yes
[16:45] Jeremy: And you set your wife down, and what did you tell her?
[16:44] Mike: Very interesting conversation. I told her that I think I wanted to start my own firm and that we were going to start slow. And that it was going to perhaps be six months before I could, you know, take any money out for a paycheck, and it might even be a good 60 days before we started seeing our first clients. And she wasn’t very happy with me. She was scared, she was nervous, but she was very supportive also. She said I’ll do whatever you want to do, I’ll be supportive, which is one thing I love about my wife. It didn’t turn out that way though, I mean, while I was at this other firm, I really became one of the faces of the firm. And a lot of the people knew me, and when I put out announcements on LinkedIn, and all of social media, all of a sudden my phone started ringing off the wall. I mean within minutes of putting out this information. And so much for my plan of having a nice, slow steady, building a staff, and everything else, I mean, I was playing catch-up from day number one. It’s a great problem to have. It’s a great feeling to know that you’ve made an impact on enough people’s lives out there, that people are searching you out and saying - hey, I want to do business
[18:22] Jeremy: So, then, tell me about the trajectory a little bit.
[18:24] Mike: We went from 0 to 160, not even 0 to 60, relatively overnight. And within nine months, we had eighteen people working for us. So, we built an incredible sales tax returns business. We’re doing 10,000 returns annualized within our first nine months worth of business, where I’ve talked to other people out there who start their business and some of them don’t even get to that level ever, let alone in the first nine months. So, very very fortunate. A lot of things went my way over the years. I’ve made great contacts while I was at this, you know, accounting firm, CPA firm. So it’s all good problems to have.
[19:13] Jeremy: So it was swamped, and then something else hit to create even more of a tsunami.
[19:16] Mike: Oh yeah, we had the Wayfair decision. So, when the Wayfair decision, which is, you know, South Dakota vs. Wayfair, U.S. Supreme Court case, and this is what I mentioned earlier. It literally changed the way that sales tax is done. And this is the one, the case that talks about a physical presence. And they overturned 51 years of precedence. I can remember there was one company out there, a software company, asked me to give a presentation on the impact. There were over 2500 people at this webinar. And for the next 5 days I had consultations from morning to night, half-hour consultations, I mean 18 a day in some days, I mean, and people from all around the world, I mean. So, you took an already, we were doing great, but now you’ve poured kerosene on top of this, and things just have really exploded since then.
[20:24] Jeremy: Now your wife is nervous for other reasons, you’re too busy.
[20:27] Mike: Yeah now she, she doesn’t see me. So, it’s feast or famine.
[20:32] Jeremy: Be careful what you wish for.
[20:34] Mike: Exactly. Wanted me to be successful, I am.
[20:37] Jeremy: What else should people know about some of the stories you’re going to tell on the podcast, Sales Tax and More? Thanks for sharing some of the background.
[20:48] Mike: And my pleasure. A lot of cautionary stories out there, especially for CPAs and other accounting professionals. I’ve never had a situation when someone has come to me with a big problem, and said, my CPA didn’t tell me, or my bookkeeper told me otherwise, there’s always someone in that story that provided some sort of guidance or a lack of guidance that have gotten them into the position they are. So, we’re going to share a lot of stories like that, and, you know, a lot of CPAs out there, a lot of accounting professionals just don’t offer sales tax services. But, even when we have that written into our agreements, our clients think that - hey, you know tax, you’re supposed to know all types of tax, you’re my trusted advisor, you need to be letting me be aware of these things. So, some of the things we’re going to be talking about are just how to talk to your clients. I like to use an analogy that, you know, sometimes you’re like the family care practitioner, you know. Someone’s going to come into you once a year, do a check-up, you ask them certain questions, and if something, you know, do some tests. If something doesn’t make sense, or there’s potential exposure there, you don’t have to be the expert. You can then call in an expert. Or, you can hire someone, or you can start offering new services, but for the most part, you just have to know the basic vocabulary. You have to know some of the basic issues out there so that you can protect your clients. And in protecting your clients, you’ll protect yourselves. So, that’s a lot of the different stories out there. We’ll talk about how it’s not only the states that we got to worry about. Sometimes you go to sell your company, you’ve never had any problems in the world, and all of a sudden, someone’s asking you to put half of the money aside into an escrow account because you got outstanding sales tax issues that you didn’t even know about. So, these are the types of cases. They’re really cautionary tales, highlighting some of the things - like most companies I’ve talked to, and most advisors, you know, I’ve talked to, don’t know that third parties, people who don’t even work for their clients, or who work for you directly, they can actually create this link or connection that we call nexus. So those are the types of things. We just want to raise the level of awareness, and we want to do it in a way that is relatable to you.
[23:31] Jeremy: Yeah. Mike, Michael, thank you. Thank you for sharing this. Everyone can check out salestaxandmore.com. If you have questions, you need more information, check out more episodes of this Sales Tax and More Podcast, and thanks for letting me be with you.
[23:45] Mike: Thank you, Jeremy.
[23:47] Outro: Thanks for listening. Be sure to click subscribe and check out all of the resources we have out on the web.