Customer case study

The Vitamin Shoppe finds relief with Avalara MatrixMaster

“It would take me three days to research and categorize just a hundred items. Can you imagine how long it would take me to do more than twenty thousand?”

– Diana Rancy, Sales Tax Manager, The Vitamin Shoppe


Tax challenges

  • State-specific product taxability treatment
  • Numerous SKUs across multiple jurisdictions
  • Complex and dynamic compliance risk

Products


Results

  • Confident compliance
  • Time and effort saved consistently
  • Improved accuracy

Product taxability for over 25,000 retail products while minimizing sales tax risk

With more than 750 stores in 46 states and Puerto Rico, The Vitamin Shoppe sells a wide range of dietary and digestive goods designed to help people achieve their health and wellness goals. How wide is their range? The company offers more than 25,000 SKUs in its retail and online stores.

Figuring out the taxability of these kinds of products can be tricky — the requirements are granular, varied from one jurisdiction to another, and always changing. 

 

Tax-matrix heartburn

The Vitamin Shoppe needed a solution to mitigate this risk. After looking at three different providers, they chose Avalara MatrixMaster. “We chose them because they had clients with similar businesses,” says Diana Rancy, Sales Tax Manager. 

“We gave them our item list and asked them for recommendations, and then compared those with previous audit results,” explains Diana.

 

How do you spell relief?

MatrixMaster is a niche service designed to solve problems like those experienced by The Vitamin Shoppe. Retail companies with thousands of SKUs provide a complete list of products. A team of researchers then determines the taxability of each item in every state where the customer operates. 

Because state auditors are people, their views on the taxability of an item can be highly subjective. “I’ve had state auditors say to me, because we’re called The Vitamin Shoppe, they assume we don’t sell any food items,” says Diana. “So even though we sell some groceries, the auditor may view their taxability the same as dietary supplements. And if the product label leaves any room for interpretation, the auditor can choose to be difficult.”

The experts at Avalara are well versed in this kind of subjectivity and continue to build their accumulated knowledge with every new case, ensuring that they reference State legislative rulings to support the tax treatment recommendations they provide. In fact, Diana said the new tax matrix for The Vitamin Shoppe was ready for review only thirty days after the contract was signed.

 

Stress reduction

The biggest benefit of using MatrixMaster, Diana says, is the time and labor saved in the effort to minimize tax risk. “I don’t have the expertise to go state by state, item by item, looking at the ingredients and figuring out the tax treatment for each item,” she explains. “It has taken me three days to research and categorize just a hundred items. Can you imagine how long it would take me to do more than twenty thousand?”

The built-in audit support is another important benefit for Diana. “Knowing that I can lean on Avalara for guidance during an audit provides peace of mind,” she says. “If an item is being disputed, Avalara is very good about explaining why we’re treating it as taxable or not taxable. And if we need to make a change, we have a process in place to do that very efficiently.”

In Diana’s view, her long-term relationship with her Avalara UPC Taxability Analyst is a huge part of the value she receives from the service. “I’ve had the same point of contact for eight years,” says Diana. “She knows The Vitamin Shoppe. That’s very important.”


Avalara Sales Tax Compliance Suite

Avalara supports quick deployment by providing over 700 pre-built integrations to business applications.

Avalara AvaTax

Delivers sales tax calculations to your shopping cart or invoicing system, and aggregates your transaction data so you can calculate what you owe in Returns.

Avalara Returns

A filing service so seamless you’ll barely lift a finger -- Returns pulls your data from AvaTax to prepare and file your returns. If you choose, we can even remit payments for you.

Avalara CertCapture

A seriously upgraded way to manage tax documents in the cloud for tidy, audit-ready records. Syncs with AvaTax to automatically apply exemptions at checkout.

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