Sales Tax Fundamentals
Get up to speed on the basics of sales tax
It all began in a garage. Woodland Manufacturing, now Advanced Sign, LLC, began cutting wood letters with a saw that was linked to a computer that went on to be named The Beast. They set up a shop online and soon had a steady flow of orders coming in from all across America. Long story short, in 2003 the team moved out of the garage, rented some industrial space in Boise, Idaho, The Beast retired, and the team expanded.
Today, Advanced Sign LLC creates signage and decor that is close to people’s hearts. With each custom sign order, the team is showcasing what the customer is most proud of. Whether it’s a sign for a child’s room, business signage, or display for an event, Advanced Sign believes in creating unique products that are personal.
But like many online retailers, Advanced Sign pivoted quickly with the onset of COVID-19 to provide another personal item, one that keeps people safe and businesses running: sneeze guards and other critical pandemic supplies. Their nimble beginnings have served them well!
Deadline for compliance
Until 2018, Advanced Sign was managing its sales tax manually. They had sales tax obligations in their home state of Idaho and it was collected and tracked via Magento and filed manually.
However, as an internet retailer with sales in all 50 states, the 2018 South Dakota vs Wayfair Supreme Court ruling had a tremendous impact on their business and accounting practices. Now that states could set their own economic nexus thresholds, the company would now have a more complicated sales tax filing situation. While in a seminar at a conference in 2019, owner Spencer Hill learned more about the magnitude of the Wayfair ruling’s impact and the deadline for compliance. Immediately after leaving the course, he went down to the exhibit hall floor and began interviewing sales tax compliance companies that were in attendance. Thus began Advanced Sign’s search for a sales tax software solution.
Making the CEO and developers happy
After going back and forth (literally) between sales tax compliance company booths, Spencer began to understand the features that Advanced Sign needed in a software platform: the price had to be good, the code had to be clean, it had to work with their eCommerce platform, and it had to help them stay compliant.
After many questions and discussions with sales representatives from the companies in attendance, Spencer decided TaxJar would be the best fit for the business.
Vice President of Marketing Casey Space, who was attending the conference alongside Spencer, remembers the experience well. “The price of TaxJar was good,” Casey said. “Then our web application developer was happy with the clean code and straight-forward integration. And when he’s happy, we’re happy.”
Having a solution in place made the entire team happy. With sales tax management and collection streamlined, the company could stop worrying about those compliance deadlines; TaxJar had it under control.
Administrative Director Heidi Cooper explains just how much the team has come to rely on TaxJar: “I might lose sleep if we didn’t have TaxJar monitoring and ensuring compliance with all the unique and changing state tax laws. Without the services of TaxJar we would need to hire or outsource for management of tax collection, filing, and monitoring at significant expense.”
Decrease risk, increase automation
Being able to offload their sales tax management meant more to Advanced Sign than just saving money. The team utilizes TaxJar’s AutoFile solution to get back their time. “AutoFile is great,” said Heidi. “With our filings on autopilot we are able to put more focus on building and operating the business.”
In addition to AutoFile, Advanced Sign relies on TaxJar to apply for licenses in new states where they reach nexus, a huge burden for growing companies with a large online presence.
The TaxJar API is another huge benefit for the team. It takes the guesswork out of calculating sales tax rates and generates precise sales tax rates and calculations at the state, county, city and special taxing district level in real time. Collecting the wrong amount of sales tax is a big risk for companies. Collect too much and you have upset customers, collect too little and you answer to the government. “I appreciate that TaxJar monitors and implements tax law changes for each state,” Heidi said, “As that would be a monumental task for us to take on ourselves.”
“It is helpful that our frontline sales and customer service staff do not need to navigate the sales tax requirements for each state, allowing them to remain focused on the business of providing customers with unique and custom sign solutions. The automation and accuracy of TaxJar helps minimize our liability for uncollected tax.” – Heidi Cooper, Advanced Sign
Even outside the day to day tax compliance operations provided by a sales tax solution Advanced Sign also has full sales tax support with TaxJar. When questions do come up, the team has had a great experience with the TaxJar support team. VP of Web Application Development Jake Kester said, “Even if it’s something that there isn’t an easy answer for, I have received a great follow up. I feel like we’re getting comprehensive answers and solutions. So, I am very comfortable with the knowledge and the responsiveness of the support team.”
“You just can’t do it yourself”
What advice does the Advanced Sign team have for other eCommerce sellers looking for a sales tax software solution? “Make sure the code doesn’t interfere with your website’s functionality,” said Casey. “No hang-ups with conversion. And I would say that you basically have to have some kind of third-party software to manage sales tax because it is crazy out there. So you just can’t do it yourself.”
I appreciate that TaxJar monitors and implements tax law changes for each state as that would be a monumental task for us to take on ourselves.