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Customer Story

Electric Motor Supply Company energises operational efficiencies

Results

Better compliance

Efficiency gains

Reduced costs

Company Overview

Electric Motor Supply Company (EMSCO) has been buying and selling refurbished industrial electrical equipment since 1948 and is one of the largest dealers in the US. The family-owned business sells products like circuit breakers, transformers and medium voltage switchgear online and from its warehouse outside Minneapolis, Minnesota. EMSCO serves companies in a variety of industries and ships equipment across the US and around the world to buyers in locations such as Canada, Mexico, Europe and Hong Kong.

Tax challenges

For a long time, sales and use tax compliance was fairly simple for EMSCO. That all changed after the 2018 U.S. Supreme Court decision in South Dakota v. Wayfair, Inc. Suddenly, EMSCO found itself out of compliance with economic nexus laws in states throughout the country. 

 

“We only collected sales tax in Minnesota and were selling into so many states where we weren’t registered. Our liability was growing. Our chief accountant wasn’t prepared to handle it all,” says Marie Griego, Accountant at EMSCO.

 

EMSCO calculated sales and use tax manually when it only needed to collect in one state but quickly realised that was no longer an option. The company sought a solution to automate sales and use tax compliance and help it gain good standing with state tax authorities.

Why Avalara?

EMSCO chose Avalara at the recommendation of its former accountant. “We looked at competitors, but our accountant said Avalara is the gold standard. It made it a no-brainer,” says Joe Faust, Sales Manager, EMSCO.

 

Joe said the team wanted a tax automation solution that would be compatible with its existing software. EMSCO uses Microsoft Dynamics 365 for writing sales orders, tracking inventory and accounting. Avalara seamlessly integrates with the Dynamics 365 platform.

 

EMSCO relies on Avalara solutions to handle calculations, returns, exemption certificate management and tax research.

 

“The Avalara implementation team that helped us was brilliant. They communicated with us constantly,” says Marie.

“Avalara has alleviated figuring out what we owe and where we owe it. The peace of mind knowing that we’re managing sales and use tax correctly is huge.”

  • – Joe Faust
  • Sales Manager, EMSCO

 

Results

With Avalara, EMSCO can get more out of its existing platform to become more efficient and reduce business risk at the same time.

 

“Having Microsoft Dynamics 365 fully integrated with Avalara AvaTax makes it that much easier to write up our sales orders and know the tax is correct. It saves us a load of time,” Joe says.

 

Without Avalara, EMSCO estimates it would need another team just to handle returns.

 

Marie is able to quickly solve real-world problems at work. “If it’s a question about drop shipping or a nexus threshold, whatever it is, I’ll type it into Avalara Tax Research. Usually the same day, I have an answer. That’s important when I’m being told, ‘We have an order that has to go out. Can you figure this out so we don’t have a delay?’” she says. “I love it.”

 

As a Streamlined Sales Tax (SST) service provider, Avalara was able to help EMSCO further simplify sales and use tax in participating states and save money. Avalara covers the cost of sales tax registration, calculations, exemption certificate processing, and returns filing and remittance in states that participate in the SST programme. EMSCO would otherwise have to cover those expenses.

 

Most importantly, the company no longer worries about non-compliance.

 

“Avalara has alleviated figuring out what we owe and where we owe it,” Joe says. “The peace of mind knowing that we’re managing sales and use tax correctly is immense.”

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