Customer story

Lionel Racing gets a tax compliance tailwind from Avalara

Results

Increased compliance
Improved processes
Integrated systems

Summary

Results

  • Increased compliance
  • Improved processes
  • Integrated systems

Tax challenges

  • Compliance risk
  • Disparate systems


Product used

Avalara AvaTax
Dynamically delivers sales and use tax calculations, based on the latest rules and rates in our tax engine, to a shopping cart or invoicing system at the time of purchase.


Benefits

  • Confident compliance
  • Streamlined processes
  • Easy integration

Company overview


Customer
Lionel Racing

Industry
Retail and ecommerce

Tax type
Sales and use

Integration
NetSuite

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).

Tax challenges


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.”

Why Avalara?


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.

Customer
Lionel Racing

Industry
Retail and ecommerce

Tax type
Sales and use

Integration
NetSuite

Tax challenges

  • Compliance risk
  • Disparate systems

Product used

Avalara AvaTax
Dynamically delivers sales and use tax calculations, based on the latest rules and rates in our tax engine, to a shopping cart or invoicing system at the time of purchase.


Benefits

  • Confident compliance
  • Streamlined processes
  • Easy integration

“My guidance to anyone involved with collecting taxes is do not underestimate the effort involved and find a trusted partner to help make the collection of taxes accurate and valid. That’s what I did.”

Rick Gemereth
CIO

“My guidance to anyone involved with collecting taxes is do not underestimate the effort involved and find a trusted partner to help make the collection of taxes accurate and valid. That’s what I did.”

Rick Gemereth
CIO

Results


With AvaTax up and running, Rick doesn’t worry about adding new states as Lionel Racing exceeds thresholds for sales tax collection. “We’ll go into AvaTax and flip a switch, and we’re on our way,” he says. “That ease of use — how quickly we can respond when states change their requirements — is important to how we operate our business, so we can remain compliant and avoid audits.”

Using AvaTax to automate sales tax collection also helps Rick stay focused on more strategic matters. “I don’t lose sleep worrying about how we’re going to deal with changing sales tax requirements,” he says. “My time is spent enhancing what we’re doing to continue growing our business.”

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