Industry solutions: Manufacturing

Sales and use tax solutions for manufacturers

In many states, even exempt sales can create tax obligations. Automation can help your business stay compliant.

Industry solutions: Manufacturing

Sales and use tax solutions for manufacturers

In many states, even exempt sales can create tax obligations. Automation can help your business stay compliant.

Avalara helps solve common compliance challenges manufacturers and distributors face

Avalara helps solve common compliance challenges manufacturers and distributors face

CHALLENGE:
Collecting the right documentation and applying tax exemptions can be challenging, especially with online sales or drop shipping. 

If tax is charged when it shouldn’t be, customers have to chase down credits and rebills, which takes up time for accounting departments. Plus, missing or invalid certificates put you at risk for being out of compliance.

SOLUTION: 
With Avalara, you collect exemption certificates as part of the transaction process, then automatically exempt tax on future sales when a valid certificate is on file, so your customers are charged appropriately. You’ll also get alerts when documents are expiring, so you can request new certificates.


“The number one benefit is the peace of mind that comes with knowing that we’re doing things the right way.”

—Joe Rossmeissl, Controller
Read the Pacon story

CHALLENGE:
Most states have economic nexus rules, but some don’t. Some states count exempt sales toward their nexus threshold, others omit them.

And once you’ve figured out where to register, each state has its own rules and schedules for returns filing and remittance.

SOLUTION: 
Avalara monitors nexus thresholds in each state, according to individual state rules. You’ll know when your business triggers an obligation to collect sales tax or exemption certificates.

You’ll also get help tracking filing requirements and deadlines in each state, making it easier for you to file on time, everywhere you need to file — even when you have a zero-dollar return.


“If we turn on 15 more states tomorrow, we wouldn’t have to worry about a single thing. We upload all of our certificates, and it’s all managed. And if somebody’s on vacation or out of the office, we know we won’t miss filing deadlines.”

—Andrea Riviezzo, Controller
Read the Inovonics story

CHALLENGE:
Selling across jurisdictions means monitoring multiple tax rates and factoring in different product taxability rules.

Even for places where you’re established, regulations change all the time. Charging the wrong rates can lead to customer frustration or negative press, harming your brand and affecting sales. It also creates a financial risk when you’re audited.

SOLUTION: 
By automating sales and use tax calculation, you won’t have to manually update rates for each jurisdiction. Avalara’s advanced tax engine accounts for different product taxability rules in each jurisdiction and applies rates based on the details of each individual sale.

For international sales, Avalara ensures you’re applying the right HS codes to your products and calculates VAT, GST, and customs duties.


“Our owner wanted to be compliant, but the volume and complexity were more than we could handle at our size. It was cheaper to automate, because we didn’t have the resources to handle it all.”

—Paul Jackson, CFO
Read the Aseptico story

CHALLENGE:
Gathering reports and preparing for audits are tedious processes. You need to pull the data from each source, then consolidate the information, correcting any inconsistencies.

It’s time-consuming and often diverts resources from revenue-generating tasks.

SOLUTION: 
The Avalara solution includes detailed reporting capabilities that reduce weeks or months of work to minutes.

Avalara serves as a single source of truth for sales tax information across all the systems involved in the compliance process.


“I feel confident with what we can provide to any state auditor who comes in. And we can do it remotely because they can access my information easily over the internet.”

—Jean Treimanis, CFO
Read the JL Marine Systems story

CHALLENGE:
Whether selling in new markets or expanding your product line, growth often means additional tax obligations. To remain competitive, manufacturers who sell directly must continue to meet customer expectations for a consistent buying experience across all channels, while addressing new compliance challenges.

SOLUTION: 
Avalara offers a variety of products to address different manufacturer and distributor compliance needs, including international and specialty taxes. Because they’re designed to work together, you can add products as you need them, without disrupting the customer experience or rebuilding your system from scratch.


“The kind of volume we’re planning will rely 100% on Avalara’s ability to help us scale. I can honestly say that having Avalara will enable that kind of growth, because we know we’re covered.”

—Emily Pfeiffer, Vice President of Marketing and Digital
Read the Berkshire Blanket & Home Co. story

Our manufacturing solution is with you every step of the way

Our manufacturing solution is with you every step of the way

Step 1

Connect your business ecosystem

Manage transaction data from one place by connecting the systems and platforms you have now, as well as the ones you’ll need as your business grows. Avalara has over 1,000 signed partner integrations for:

  • Enterprise resource planning (ERP) and accounting systems
  • Ecommerce platforms
  • Marketplaces
  • Customer relationship management (CRM) programs
  • Point-of-sale (POS) systems
  • Order management systems (OMS)
    and more

Step 2

Know where you have registration and filing obligations

Economic thresholds vary from state to state, and some include exempt and zero-dollar sales in their totals.

Complete a nexus assessment to understand your sales tax requirements

Register with the appropriate tax authorities

Step 3

Understand which transactions are taxable, and which are exempt

For taxable transactions, you’re required to calculate and apply sales tax based on jurisdiction rates and rules

If transactions are exempt, establish a process for collecting and verifying exemption certificates at the point of sale

Step 4

Maintain proper, accessible documentation

Create a system to properly manage exemption certificates and other tax documentation.

Collect certificates at the point of sale

Store verified certificates in a secure database that’s accessible for subsequent purchases, reporting, or auditing

Request renewals for expiring certificates

Step 5

Remit returns and tax payments

Each tax authority has its own requirements and deadlines for filing and remitting sales tax returns. You’ll need to:

Track the forms, rules, and dates in the jurisdictions where you have tax obligations

Know where you’re required to file a zero-dollar return

Provide evidence of exempt transactions

File and remit payments on time, according to each jurisdiction’s calendar

Compliance is an ongoing process

It’s important to continue monitoring your tax obligations, regulation and rate changes, and auditor requests. Sales tax compliance is an ongoing effort, and each step will repeat, as long as you’re in business.

Automation can help you maintain a more efficient process without increasing the time or resources necessary to manage compliance in multiple jurisdictions.

It’s official:
Avalara is a Leader in tax automation software

IDC MarketScape named Avalara a Leader in Worldwide SaaS and Cloud-Enabled Sales and Use Tax Automation Software for Small and Midsize Business

If you’re considering tax automation, check out the independent IDC MarketScape evaluation.

Automate and manage vendor exemption certificates

Save time and resources while providing valid exemption certificates and federal forms to your vendors.

Automate and manage vendor exemption certificates

Save time and resources while providing valid exemption certificates and federal forms to your vendors.

Avalara works with what you already use

Prebuilt connectors and a robust API help you integrate with your existing business systems or tech stack.

Avalara works with what you already use

Prebuilt connectors and a robust API help you integrate with your existing business systems or tech stack.

Avalara works with what you already use

Prebuilt connectors and a robust API help you integrate with your existing business systems or tech stack.

Related resources for manufacturers and distributors

Related resources for manufacturers and distributors

Avalara Accuracy Guarantee

Trust your tax compliance to Avalara. If we get something wrong, our Accuracy Guarantee means we’ll help make it right.

Learn more

Accuracy Guarantee is subject to terms and conditions. See page for details.

Avalara Accuracy Guarantee

Trust your tax compliance to Avalara. If we get something wrong, our Accuracy Guarantee means we’ll help make it right.

Learn more

Accuracy Guarantee is subject to terms and conditions. See page for details.

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