Startups that have (or are seeking) funding from outside sources typically have more stringent reporting requirements than family businesses or partnerships — requirements that are often dictated by investors, financial institutions, and/or regulators. It’s a big part of why these companies turn to firms such as Stage 1 for support with critical business functions such as accounting, CFO services, and corporate tax compliance.
Increasingly, that support includes state and local tax compliance. In the wake of the U.S. Supreme Court’s 2018 ruling in S. Dakota v. Wayfair, individual states began passing economic nexus laws that require companies to collect and remit sales and use taxes based on their economic activity in a given jurisdiction — broadly expanding the tax obligations of many businesses, especially those selling online.
Faced with navigating a tax landscape that includes over 12,000 sales and use tax jurisdictions in the U.S. alone, and seeking to reduce both the risk of penalties for noncompliance and the administrative hassle of compliance, a growing number of these startups have sought assistance from firms like Stage 1.
The firm offers two core options for clients when it comes to sales and use tax: For startups with in-house staff that can manage compliance, Stage 1 serves in an advisory role and refers the client directly to Avalara for automation solutions.
Meanwhile, for clients that want to fully outsource the compliance process, Stage 1 will manage it all using Avalara Managed Returns for Accountants. This allows the client to be almost completely hands-off as Stage 1 handles implementation, filings, and ongoing compliance needs on their behalf. Clients can even pass along any notices or mail they receive from taxing entities, knowing Stage 1 will take care of it.
Either way, according to Stage 1 State and Local Tax Senior Accountant Andrea Sallie, clients appreciate having access to Avalara’s powerful end-to-end solution, which covers sales tax registration, to collecting taxes, filing returns, remitting funds, and even managing exemptions — all while keeping track of ever-changing regulations.
