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Sales Tax Solutions for Merchants

Last month, while attending the ShareASale Inc Think Tank, I had the opportunity to meet with John Perri who is the Director, Enterprise Sales at Avalara.  Avalara is a full service sales tax management company; they provide merchants of all sizes, with the technology necessary to automate sales and use tax collection on a multi-state basis.

As you could probably guess, John and I spoke about the impact of states enacting new legislation or beginning to enforce existing laws to require out of state merchants to collect and remit sales tax. Since I am very interested in identifying solutions, we also spoke about the services Avalara provides.  While talking with John I was impressed with his knowledge and understanding of the impact on both affiliates and merchants.  After speaking with him I feel confident that Avalara offers services that could be beneficial to many merchants.

Last week, in order to provide merchants with additional information, I followed up with John Perri of Avalara.

1. Can you briefly describe your services in regards to helping merchants ensure they are in compliance with sales tax collection in multiple states?

“Sales tax compliance can be very simple, or extraordinarily complicated depending on factors that include the type of products and services a company offers, and the number of states in which they’re compelled to collect and remit. Avalara provides the fastest, easiest, most accurate and affordable way for businesses to manage sales and use tax. We are the tax engine that powers nearly 9,000 clients and 22,000 users. Whether eCommerce, POS retail, or ERP (or any combination), Avalara can integrate seamlessly and control all calculation and reporting through a single Administrative Console. No software to deploy or additional hardware is required.  Avalara manages the ongoing jurisdictional changes, exemptions, product taxability, tax holidays, sourcing rules, and all other dimensions of sales and use tax compliance with high accuracy and very detailed reporting. Since our founding, Avalara has never had a client report back a negative audit result. To date this year, there have been over 1,000 changes to sales tax rates and rules in the U.S.”

2. What size merchants do you work with? Is there a minimum or maximum sales volume?

“Avalara’s clients range from very small “Mom and Pop” businesses to companies that include Borders.com, USA Today, Clear Channel Communications; from organizations processing hundreds of tax calculations per year to those processing tens of millions.  Price plans can accommodate all types and sizes of businesses, and can scale with them as they grow.”

3. Is it easy to integrate or will a merchant need new software or shopping carts?

“Avalara’s service has already been integrated into more than 80 different software packages, shopping carts, and ERP systems; and the Software Developers Kit (SDK) makes it possible to integrate into virtually any application with minimal effort.”

4. Will a merchant need to hire additional staff to handle sales tax collection in additional states?

“Avalara was originally conceived to bring Fortune 500 sales tax capabilities to smaller organizations that didn’t have internal resources to manage these processes effectively.  Avalara services free staff to work on revenue generating tasks instead of sales tax, which is a pass through for businesses, so if anything staff requirements would be reduced by implementing Avalara. In addition to the front-end calculation and address validation tools described above, Avalara has a service called AvaFile, which can file and remit payment on a company’s behalf-in all the states that they file in today, be they states that require a paper or electronic filing. Last year we remitted over $10 billion on behalf of our clients. Liability to remit on time and Notice Management thereafter falls upon Avalara.”

After speaking with John I feel that Avalara can provide merchants with the tools and support they need to comply with multi-state transactional tax. With both new legislation and the changing interpretation and enforcement of current legislation, many states are requiring remote merchants to collect and remit sales tax. Understandably, many merchants are overwhelmed by the thought of collecting for multiple state revenue departments.  Rather than simply terminating affiliate relationships or ending their affiliate program altogether, merchants will need to consider collecting and remitting the sales tax. Avalara has technology that will simplify and automate that process.  You can learn more about Avalara  and their services by visiting their website and contacting them.

Visit Avalara 

Disclosure: This post only expresses an opinion and is not meant to provide legal or financial advice.  Please consult professional and licensed counsel in all matters. This is not a paid or compensated relationship.

{ 2 comments… add one }

  • Ben December 2, 2009, 3:01 pm

    Thanks for sharing. I’ll be sure to let my partner check out Avalara.

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