Avalara’s Founder Testifies Before Congress
Technology Behind SSTP Explained to House of Representatives Small Business Committee
(link to House of Representatives - Witness Testimony)
Bainbridge Island, Washington, February 8, 2006: Avalara’s founder, Rory Rawlings – who now serves as Chief Automation Officer for the firm – testified before a Congressional Committee on February 8th in Washington DC on the Streamlined Sales Tax Program – SSTP. “Small businesses typically do not understand compliance – or the cost of compliance to their businesses,” Rawlings told the committee. “They do know, however, that the cost of compliance is overwhelming – a drain away from the very reason why their businesses were started in the first place.”
Rawlings also told the Committee that the changes implemented by the multi-state SSTP program, “although necessary and a benefit in the long run, introduce uncertainty and an administrative burden in the short run.” Rawlings urged Congress to make sure that any legislation passed would be sensitive to the needs of small businesses, and would include technological solutions to the challenges that any Internet sales tax would impose on America’s more than 5.75 million small and mid-sized businesses – SMBs.
Rawlings concluded his testimony by pointing out that, while the inclusion of SMB businesses in any Internet sales taxation program was a political decision, not a business one, the solution to the compliance problems faced by small businesses is a technological one. One such solution, developed by Avalara, has been in place since mid-2004, and is currently being used by more than 2,000 business license holders nationwide.
“A simple, easy to use system that overcomes the myriad complex decisions involved in sales tax compliance not only enables all businesses to be treated equally,” Rawlings said in concluding his testimony, “it also doesn’t create a penalty for success.” If all businesses are included in a technology-based solution, “buyers will no longer favor one seller over another” based on their sales tax collection obligation.
This hearing, before Small Business Committee’s Workforce, Empowerment and Government Programs and chaired by Congressman Todd Akin (R-MO), was called to consider Federal enabling legislation which could lead to the collection of already-existing sales tax on Internet sales. These taxes are already imposed by the states; however, they currently remain uncollectible.
The hearing specifically addressed the nationwide state-by-state movement to adopt streamlined standards for sales tax, with the goal of establishing a system whereby states can collect cross-jurisdiction sales tax on Internet-based and catalog-based sales. Because of a 1992 Supreme Court ruling, imposing those taxes has been barred to the states. Through SSTP, the participating states are implementing one possible solution, while Congress is exploring Federal solutions and national standards.
Rory Rawlings is an expert on the technology that could make SSTP workable, even for small businesses – and in that role, he has consulted with State and Federal experts on the development and implementation of SSTP. Rawlings was quick to point out that while Avalara doesn’t take a stand on SSTP – that’s a political decision, not a corporate one.
Rawlings pointed out that Avalara performs 4.5 sales tax calculations every second – every hour, every day – and does this for every transaction conducted by more than 2,000 registered small business users. Because of that huge volume of ongoing, real-time sales tax calculations, Avalara has the technical expertise in cross-jurisdictional sales tax management to advise Congress and the states on feasible means of implementing cross-jurisdictional or national standards for fairly taxing Internet sales.
About AvaTax™
An SMB market-leading, Web-service-based sales tax solution, AvaTax instantly and accurately calculates sales tax for clients in any of the more than 8,000 taxing jurisdictions in North America. AvaTax provides detailed, real-time reporting and automatically generates pre-populated sales tax returns.
AvaTax is the most comprehensive, full-service, automated sales tax solution available to the SMB market space, eliminating forever the need for Avalara’s clients to do rate lookups, tax detail research and tax schedule creation. AvaTax makes the hassle of filing returns and remittance go away too. AvaTax performs all of these tasks, and does so more affordably than any other solution on the market today. AvaTax comes integrated with SMB financial applications serving more businesses than any other solution on the market today, including Intuit’s QuickBooks, Sage Software’s Sage MAS 90 ERP, Sage MAS 200 ERP, Sage MAS 500 ERP and Sage Accpac ERP; Epicor’s iScala; and Microsoft Dynamics™ GP (formerly Great Plains) and Microsoft Dynamics™ NAV (formerly Navision), both from Microsoft Business Solutions. Additionally, with AvaTax On-Demand™ developers can integrate Avalara’s sales tax Web service with any e-commerce, third party or custom-build solution with use of a comprehensive Software Developer’s Kit (SDK).
About Avalara
Headquartered on Bainbridge Island near Seattle, Washington, Avalara is changing the sales tax landscape by delivering innovative and affordable solutions to small and mid-sized businesses. Avalara’s mission is to transform the tax process for our clients by creating cost-effective, state-of-the-art solutions. Avalara does so through integrated on-demand, Web-based services that provide transparent transactions, accurate tax compliance, painless administration and effortless reporting.
For more information about Avalara, contact:
Ned Barnett, ned@barnettmarcom.com, 702-696-1200
Daryl Toor, dtoor@attentiongroup.com, 770-777-9489
Congressman Akin’s press secretary, Steve Taylor, can be reached at 314-590-0029
The text of Rory Rawlings’ testimony is available upon request
