Transition To Vertex Cloud

What’s Changing and Why

Companies using Vertex’s legacy on-premise or hybrid tax engines are now transitioning to Vertex Cloud Indirect Tax and Payroll Services. The move is driven by several factors:

  • Vertex is retiring older on-premise models and consolidating services into a cloud-first, API-driven platform.

  • The cloud deployment offers real-time tax updates, compliance automation, and seamless integrations with ERP/HCM systems. Installing monthly Vertex updates in your environment will no longer be required.

  • Re-designed integration with the Vertex cloud service will deliver significant payroll processing performance improvements

  • Security and assurance – validated by annual SOC 1 and SOC 2 Type 2 audits, meeting AICPA Trust Services criteria.

This shift reduces operational burden, eliminates manual updates, and provides resilience against rapidly evolving compliance requirements.

Vertex Compliance (SOC-Certified)

Vertex’s control environment is independently audited each year:

  • SOC 1 Type 2: Verifies payroll, tax, and reporting processes relevant to financial controls.

  • SOC 2 Type 2: Validates security, encryption, monitoring, vendor oversight, and incident response.

Highlights include:

  • Encrypted transmission and storage of all customer data.

  • Multi-factor authentication (MFA) and role-based access.

  • Continuous vulnerability scanning, patch management, and penetration testing.

  • Vendor controls across AWS, Oracle Cloud, Equinix, and Salesforce.

Key Dates and Releases

  • Patch 22: Vertex Cloud ready for production use, legacy Vertex (local) processing is still available.

  • August 2026: All customers using CMiC PY must be running either Patch 22 or Nexus 1. Legacy Vertex (local) processing will no longer be supported.

What Data is Sent to Vertex?

Vertex Cloud exchanges only the minimum data required for tax calculation and compliance reporting. This includes:

  • Employee & Payroll Data: Earnings, location, jurisdiction, union/benefit codes.

  • Transactional Data: Gross pay, deductions, fringe benefits, taxable vs. exempt items.

  • Configuration Data: Company, department, and job-level setup for tax rules.

  • Return & Payment Data: Calculated taxes, jurisdiction filing, remittance instructions.

Sample JSON Payload sent to Vertex can be found in Appendix A - JSON Payload Sent to Vertex.

Infrastructure Changes

SaaS and PaaS Customers: No infrastructure changes are need on your end, any necessary changes will be handled by CMiC directly.

On-Prem Customers:

  • Application servers must establish secure outbound HTTPS (TCP 443) to Vertex Cloud API endpoints (e.g., *.vertexcloud.com).

  • Firewall Configuration: permit outbound traffic on port 443. No inbound exposure required.

  • DNS Resolution: internal DNS must resolve Vertex API domains.

  • Certificates: trust standard Certificate Authorities for TLS termination.

  • Proxy/VPN Options: if public internet is disallowed, a controlled outbound proxy or VPN tunnel must be established.

Do I have to change any of my PY configuration?

Area

CMiC’s Responsibility

Customers Responsibility
Retirement of Legacy Tax Elements

Provide a script to:

  • Retire old Tax Elements.

  • Assign default “00” for all Benefits & Expenses.

  • Map Deductions as close as possible from old Tax Element screen.

Review the updated master setup after script runs and validate correctness.
Override Handling N/A (script will not cover exceptions).

Review edge cases where deductions were not previously linked to Tax Elements.

Update Deduction master screen

Assign User-Defined IDs if required (refer to video and presentation in Session 2: Unifying Tax Intelligence in CMiC: From Tax Elements to Smart Compensation & Deduction Mapping)
State-Specific Withholding & Reciprocity Provide new Tax Override screen functionality.

Review reciprocity rules under the new Tax Override screen

Set up reciprocity as needed (refer to video and presentation in Session 2: Unifying Tax Intelligence in CMiC: From Tax Elements to Smart Compensation & Deduction Mapping)

License / Pricing Changes

SaaS and PaaS Customers: No change. The cost for vertex is included in your current hosting/licensing fees.

On-Prem Customers: You have your own agreement with Vertex directly to receive monthly tax updates that are processed locally in your environment. As we transition to the cloud version, customers will pay CMiC directly for the use of this service.

We have negotiated bulk pricing based on the volume of all of our customers. The cost will be $5 per employee, billed annually.

Appendix A - JSON Payload Sent to Vertex

Below is a representative JSON request illustrating major tags exchanged with Vertex Cloud:

Copy 
{
  "employee": {
    "employeeId": "PK100",
    "payPeriod": {
      "payDate": "2024-02-15",
      "totalPeriods": 52,
      "currentPeriod": 7
    },
    "defaultSupplementalPayTypeTreatment": "Regular",
    "residenceGeocodeId": "310136508",
    "primaryWorkGeocodeId": "310170830"
  },
  "workLocations": [
    {
      "workLocationId": "1",
      "geocodeId": "310170830",
      "currentHours": 40,
      "compensations": [
        { "compensationCodeId": "00", "payType": "Regular", "amount": 1250 }
      ]
    }
  ],
  "jurisdictions": [
    {
      "taxRecordIdentifier": { "taxIdentifierId": "467", "geocodeId": "310000000" },
      "filingStatus": "42",
      "taxingLocationType": "Residential",
      "supplementalPayTypeTreatment": "Both"
    }
  ],
  "deductions": [
    {
      "deductionTypeId": "1001",
      "deductionAmount": 50,
      "cashTakenByEmployee": false,
      "taxabilityOverride": "Taxable"
    }
  ],
  "calculationOverrides": [
    {
      "taxRecordIdentifier": { "taxIdentifierId": "467", "geocodeId": "310000000" },
      "overrideRate": 0.0050
    }
  ],
  "aggregatedTaxes": [
    {
      "taxRecordIdentifier": { "taxIdentifierId": "450", "geocodeId": "330000000" },
      "payType": "Regular",
      "taxingLocationType": "Work",
      "taxAmount": "210.26",
      "aggregationType": "QuarterToDate",
      "aggregateAdjustedGross": "16250"
    }
  ],
  ],
    }
  ]
}