Another successful customer webinar in the books!
In our latest exclusive educational customer session, we invited our partners at Avalara showcase how a simple integration can help them move from 14-month-long “nightmare” audits to one-day reviews.
As we discussed the session, sales tax has moved beyond simple math into a high-risk manual burden. In 2023 alone, there were nearly 86,000 taxability updates across North America. Tracking these changes manually is no longer a viable business strategy.
The New Reality of “Nexus”
Many businesses mistakenly believe they only owe tax where they have an office or warehouse. Today, compliance is triggered by:
- Physical Nexus: Includes remote employees, attending trade shows, or storing inventory in third-party fulfillment centers.
- Economic Nexus: Most states trigger registration once you hit thresholds (commonly $100,000 in sales or 200 transactions).
- The Exemption Trap: 36 states require you to register and file returns even if 100% of your sales are tax-exempt.
The Precision Gap
Standard zip codes aren’t precise enough for the 13,000+ U.S. tax jurisdictions. Boundaries can change mid-building, and neighbors in the same town often pay different rates. Beyond geography, rules vary by product use; equipment might be exempt if used for production 51% of the time, but taxable at 49%.
The $43,000 Error: Exemption Certificates
Exemption certificates (resale, nonprofit, etc.) are a major audit risk. They expire at different intervals—Florida’s annually, while California’s are “evergreen.”
If an auditor finds one invalid certificate on a $15,000 sale, they don’t just charge you the missing tax. They extrapolate that error across years of records. A single missing form can result in over $40,000 in penalties and interest.
The Expandable + Avalara Integration
Leveraging a dynamic API, the integration allows Expandable ERP to remain your operational “source of truth,” while Avalara handles the compliance logic in the background:
- Real-Time Calculation: When you create an invoice in Expandable, Avalara instantly calculates the precise tax based on the latest jurisdiction rules.
- Automated Filing: Avalara uses your transaction data to prepare and file returns across all registered states.
- Certificate Management: Avalara digitizes your certificates, validates them against state requirements, and automatically alerts you when renewals are needed.
The Bottom Line
Research shows manufacturers spend an average of $14,000 per month on manual tax tasks—time that generates zero revenue. Automation offers an average ROI of 102% within six months.