Avalara stands with Black-owned businesses
While no company is immune to the COVID-19 pandemic or the economic downturn it’s caused, Black-owned businesses have been particularly hard-hit. Recognizing this, and in honor of Black History Month, Avalara is offering qualifying Black-owned small businesses a free year of Avalara AvaTax. Sales tax compliance should never interfere with growth or success.
The number of active business owners nationwide “fell by 22% from February to April 2020.” During the same period, Black-owned businesses dropped a staggering 41%. The Federal Reserve Bank of New York (FRBNY) attributes this discrepancy to:
- Location. Black-owned businesses are more likely to be in COVID-19 hot spots.
- Financial health. Preexisting funding gaps, weaker bank relationships, and weaker cash positions put Black firms at a financial disadvantage at the onset of the pandemic.
- Paycheck Protection Program (PPP) coverage gaps. PPP loans reached only 20% of eligible businesses in states with the highest densities of Black businesses; coverage rates were even lower in counties with the densest Black-owned business activity.
Black Americans are also at increased risk of contracting COVID-19 or suffering complications from it, which could impact work. Contributing factors include the fact that Black Americans are less likely to have jobs that can be done remotely and more likely to have underlying health conditions.
Businesses that made it through 2020 intact aren’t out of the danger zone. The FRBNY notes that “several states saw a resurgence in active Black business ownership in May and June as phased reopening began,” but the tenacity of the virus has triggered additional restrictions since then. No one knows how long this situation will last; although vaccinations are on the rise, so are more highly contagious coronavirus variants.
Of course, the pandemic hasn’t been bad for all businesses — some saw demand increase over the past year (e.g., sales of hobby supplies grew by 188% in March 2020). And there’s been an outpouring of support for Black-owned businesses since George Floyd’s murder and the protests against racial injustice it spawned. McKinsey & Company reports that one major social media company has dedicated $40 million in grants to support Black-owned businesses with 50 or fewer employees, and a financial services firm pledged “$350 million in procurement spending on Black-owned businesses, to close the racial wealth gap.”
In the spirit of the times, Avalara is working to make sales tax automation more affordable for Black-owned small businesses.
Avalara Together: Standing with Black-Owned Businesses
The Avalara Together: Standing with Black-Owned Businesses promotion provides one free year of a 10,000-transaction AvaTax sales tax calculation account for businesses that are at least 51% owned by people who self-identify as Black. This offer is sponsored by the Avalara Ujima Employee Resource Group for Black Avalarians. Ujima is the third principle of Kwanzaa and means “collective work and responsibility.” One of the key focus areas of the Ujima employee resource group at Avalara is to provide authentic connections to diverse communities to effectuate positive change and drive equity for all.
“Historically, Black-owned businesses are more at risk to experience challenges due to preexisting financial inequities in this country, but COVID-19 has exacerbated this problem,” said Amelia Ransom, senior director of engagement and diversity. “Avalara is proud to be able to support Black communities by providing Black-owned businesses with an equitable solution to help them grow their business.”
The fine print
One Level 1 or Level 2 integration is included; accounts requiring custom integrations are excluded, and the promotion isn’t available through distributors and resellers. Billing via automatic payment is required. Customers must upgrade or pay overages if more than 10,000 transactions are used in the first year. Automatic upgrade is not available.
This offer is valid for new customers only. Avalara reserves the right to cancel, change, or suspend this promotion at any time.
Applications are due by February 28, 2021. Connect with us to see if your business qualifies.
Selling online increases opportunities and tax compliance complexity
Ongoing social distancing measures across the country and around the world have made ecommerce more essential than ever. Yet while selling online can be good for business, it also complicates sales tax compliance. Currently 43 states, Washington, D.C., and parts of Alaska require certain out-of-state sellers to register with the tax department and collect and remit sales tax under economic nexus laws. The more a business grows, the greater the compliance risk.
Managing sales tax manually is a resource drain in the best of times, and with COVID-19, companies have even less time to devote to compliance. Nonetheless, getting sales tax right is critical. Whether a small business is trying to get by with fewer resources or grappling with a sudden surge in growth, improving efficiencies can help streamline and keep up with demand. In either scenario, leveraging sales tax automation will improve sales tax compliance.
The 2021 sales tax changes report: midyear update
Your guide to navigating the complicated world of tax compliance and preparing for the future
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