Set Solutions no longer sweats sales tax complexity

Houston-based Set Solutions, a Trace3 company, solves a range of cybersecurity problems for its customers in 27 states. Just as those problems can be complex, the company’s offerings are a sophisticated combination of products, services, and training. “If we had a product catalog, there would be 90,000 items in it,” says company CFO, Missy Basone.

Software as a service (SaaS) represents a particularly thorny challenge when it comes to sales tax. The tax treatment of SaaS differs among states, and businesses are on the hook for sorting it all out. To further complicate matters, Set Solutions provides quotes from QuoteWerks, representing not only its own products and services but also those of other manufacturers and distributors. Many of its customers have multiple locations across several tax jurisdictions, and the quotes need to reflect the correct taxability of each line item.

When Set Solutions was collecting taxes only in its home state of Texas, these layers of complexity were manageable for Missy’s team. Then came the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc., which overruled a longstanding physical presence rule and allowed states to adopt economic nexus rules for companies selling products and services in jurisdictions where they have no physical presence.

“We knew we were going to have to collect and remit in different states — we just didn’t know how many,” Missy recalls. “We’re a small team, so the Wayfair decision led us to look for an automated solution for managing sales tax.”

“Our tax advisors came to me right after Wayfair and recommended Avalara,” Missy explains. “As a cybersecurity firm we always need to work with the most forward-thinking partners, and Avalara is the clear leader in cloud-based tax services. They make it easy to track and file taxes at various locations, and they integrate seamlessly with both QuoteWerks and QuickBooks, which was our accounting software at the time. I was like, ‘Okay, we’re doing this.’”

When the company decided to invest in new accounting software, Missy chose Sage Intacct mainly for its easy integration with Avalara. “Whatever I used, it had to work with Avalara,” she explains, “because I had invested a lot in their products, and I trust their expertise.”

Set Solutions went live with Avalara in one state and grew to fourteen in the first year. Four years later, the company is filing in 27 states. “We use (Avalara) AvaTax to provide real time calculations for quotes and invoices, along with Avalara Returns to file and remit sales tax,” says Missy. “We also use Avalara Exemption Certificate Management, Avalara Tax Research, and Avalara Professional Services.”

“Working with both Avalara and Sage, Set Solutions has saved more than $300,000 annually and 30 hours per week on tax compliance tasks — valuable time, and resources that greatly affect our growing business,” Missy says.

When auditors come calling, Missy and her team can now breathe easy. “I had gone through a Texas sales tax audit where it took us almost a year to get through it,” she recalls. “With Avalara, I have all the information and backup at my fingertips. It’s a huge time and energy saver, and it’s peace of mind.”

Set Solutions deals with a lot of organizations that are exempt from paying sales tax. With Avalara Exemption Certificate Management, Missy doesn’t worry about keeping track of exemption certificates and their expiration dates. “Avalara keeps track of all of that,” she says.

With Avalara Returns, filing in 27 states doesn’t create an undue burden on Missy’s team. “Avalara is doing all the filing and remitting for us,” she says. “We also rely on Avalara to find out when we need to register in a new state. It tells us when we’re about to cross the nexus threshold, and so we’ll use Avalara to help us register in that state and I know it’s set up correctly.”

As much as Missy appreciates the time and money savings, it’s the partnership she values more than anything. “Working with Avalara has been perfect,” she says. “We rely on their expertise in so many ways — like using Avalara Tax Research to determine a product’s taxability in various jurisdictions. Being able to trust that expertise saves my team so much time, I don’t know how they could live without it.”

“Working with Avalara — together with QuoteWerks and Sage Intacct — has given me time back for family and the peace of mind to enjoy it,” she concludes. “When I am with my family now, I'm fully present.”