Running an ecommerce business brings its fair share of challenges, and tax is a big one. With all the varying rules and codes that seem ever-changing, it can be tough to keep up with it all.
Avalara is a company that prides itself on handling these tough tax issues for businesses of all kinds. I spoke with Pat Falle, Avalara’s SVP of Strategic Alliances, to learn more about what tax challenges give ecommerce retailers the most trouble, and why wearing bright orange is a badge of honor.
Let’s begin with the intro: what is Avalara and what do you do?
In a nutshell, we’re the world’s leading sales tax compliance solution for businesses. We provide companies with a way to focus on growing their business without having to worry about tax compliance. We work with any type of business, from dentists and doctors offices, manufacturers, coffee shops, and of course ecommerce businesses. It runs the whole range. It’s amazing how many people are affected by tax; pretty much everybody pays it!
How did Avalara get its start?
Our founder Rory Rawlings came from the accounting world with a background in software development. He worked for a few companies that had asked him to build automation to manage their taxes, and after the fourth or fifth time hearing that same request, he realized it was a real problem. He saw an opportunity to build a company, and he brought other founders in from other industries, particularly the tech industry.
What is the first question a new ecommerce client might ask when they meet with Avalara?
“How do I know where I have to pay sales tax?” We hear that over and over and over and over.
What are the top tax challenges that give ecommerce merchants the most grief?
Definitely the laws that are constantly changing on whether merchants need to charge or not charge tax in certain locations. Nexus is a legal term regarding state sales tax, and states often modify the nexus rules. Tax codes and rates generally change once a month, but the rules about what define nexus could change at any time. For ecommerce vendors, if they’re traveling, or if they’re selling to different markets, it’s going to get the attention of the state. The states are going to find creative ways to determine that you’ve got to charge sales tax.
We keep track of all that for our clients. And it’s really not enough for a business to just go to our website and say, “Hey, do my taxes.” We find they have so many questions, like how do I do this right? How do I set it up properly? We help businesses handle it, and once they’re set up they never have to do anything again.
Avalara is pretty well known stateside, but you also have European operations. How does Avalara benefit clients in Europe, and what are some specific challenges they face?
In Europe, calculation of tax is complicated, but not as complicated as in the US. It’s filing that can be really really hard, especially filing in more than one county. The amount of paperwork that goes along with it can be crushing to a business. We have a large staff in our European offices, and they’re very focused on calculating as well as filing and remittance.
As we’ve been seeing in the news lately, there are a lot of political changes that can complicate things. Every time something like Brexit happens, for example, we realize that this is the type of stuff that keeps us in business. You can never predict what will happen, but our engine is built to accommodate those challenges.
What’s in the pipeline for Avalara for the second half of the year?
There are going to be some exciting product announcements, and we will be rolling out new geographies, new countries, and new functionalities. We have been getting requests for new markets, so look for those announcements later this year. I think people will be excited about it.
Taxes aren’t exactly thought of as fun, but Avalara always keeps things upbeat. What is your strategy for making tax software exciting to people?
There have always been companies that help with taxes, and those are the ones that traditionally don’t seem very fun. They’re accountants and CPAs, they wear a lot of grey and black. But culture plays an amazing role in the success of a business, and we wanted to have a fun tech culture while having a serious tax engine on the back end that helps our customers. Our biggest key is that we’ve always viewed ourselves as a tech company first.
Back in 2004, we showed up at our first trade show with a tiki hut, serving margaritas, and we all wore orange. We got teased and made fun of. People said “You seem fun, but I don’t think you’re going to make it.” Now, we see other people show up in bright colors. It has become a badge of honor for us, and we’re proud to have been the first to do it. Internally we say, “We bleed orange.”
Has orange become your favorite color?
Avalara orange has, yes!
To learn more about Avalara and AvaTax, visit Avalara.com.
Corra is a New York, Los Angeles and London based digital commerce agency creating unified commerce experiences for fashion, lifestyle and beauty. Corra’s ecommerce strategy, design and technology professionals are trusted by retailers of all sizes to implement and support the Magento Enterprise and hybris platforms.