Lionel Racing gets a tax compliance tailwind from Avalara

A subsidiary of Lionel, famous for its model trains, Lionel Racing sells die-cast models of legendary racers and current NASCAR superstars on the web and through various companies at racetracks across the United States. In addition, Lionel Racing sells apparel exclusive to their Racing Collectables Club of America (RCCA).

Prior to the U.S. Supreme Court decision in South Dakota v. Wayfair, Inc., Lionel Racing had been collecting sales tax in the six states where they had an operating presence. “Like every other online business in America, our tax obligations turned on a dime,” says CIO Rick Gemereth. “As states began defining their own thresholds for taxable sales, we found ourselves collecting sales tax in 20 pretty fast — and we expect that number to grow.”

The sudden addition of all those states brought a great deal of complexity, since tax rates vary from jurisdiction to jurisdiction. Rick says, “There are around a hundred counties in North Carolina, for example, and each one has the ability to have its own requirements that change all the time. Compliance is a priority for us — and it’s a moving target.”

Rick knew sales tax automation was the answer for Lionel Racing — prior experience with Avalara gave him confidence. “We needed a partner we could trust,” he says, “who could integrate easily with NetSuite and provide a path forward for the company as we continue to grow.”

If Avalara AvaTax hadn’t already proven itself to Rick in his previous role, he says the search for a solution would have consumed a great deal of time and money. Aside from the prebuilt integration with NetSuite, his requirements included affordability, ease of deployment and use, referenceable clients, longevity, and a history of success in accurate sales tax collection.