Industry Solutions: Marketplace
Tax compliance for marketplaces of all sizes
Marketplaces are under increasing scrutiny from taxing authorities around the globe. Fortunately, automated tax compliance solutions can help marketplaces of all sizes avoid the fines and penalties associated with noncompliance.
Tax compliance for marketplaces of all sizes
Marketplaces are under increasing scrutiny from state taxing authorities. Fortunately, sales tax compliance automation can help platforms of all sizes avoid the fines and fees associated with noncompliance.
Reduce noncompliance risk
Enable business growth
Provide transparency
Improve the B2B experience
Avalara helps solve common compliance challenges marketplaces face
Improve compliance without increasing workload
Keep up with marketplace facilitator laws and tax rates and rules that differ from state to state and internationally.
Challenge
Knowing when you’re responsible for taxes in each jurisdiction is tough.
Then you have to figure out all the varying tax rates and rules for all the products your sellers list. It feels impossible.
Solution
Avalara AvaTax provides automatic updates, deployed quickly without diverting effort from your IT department or requiring technical know-how from your finance team.
Improve compliance without increasing workload
Keep up with marketplace facilitator laws and tax rates and rules that differ from state to state and internationally.
Challenge
Knowing when you’re responsible for taxes in each jurisdiction is tough.
Then you have to figure out all the varying tax rates and rules for all the products your sellers list. It feels impossible.
Solution
With Avalara, you can add products to help you navigate the complexities of cross-border sales, when you need them.
Get the right solution for now — and later
Get international products you need, when you need them, without paying for them if you don’t.
Challenge
Finding a solution for now is one thing, but if you’ve got growth in mind, vendor lock-in is a real concern.
You don’t want to invest time and energy in a platform that won’t work if you expand into global markets.
Solution
With Avalara, you can add products to help you navigate the complexities of cross-border sales, when you need them.
Get the right solution for now — and later
Get international products you need, when you need them, without paying for them if you don’t.
Challenge
Finding a solution for now is one thing, but if you’ve got growth in mind, vendor lock-in is a real concern.
You don’t want to invest time and energy in a platform that won’t work if you expand into global markets.
Solution
Avalara AvaTax provides automatic updates, deployed quickly without diverting effort from your IT department or requiring technical know-how from your finance team.
Be transparent about rates on international sales
Customers can see exactly how much their items will cost, creating a smooth experience and avoiding surprise charges on delivery.
Challenge
Getting international taxes and duties right is a hassle. Charge too little, and your sellers lose money. Too much, and they lose the sale.
Letting the customer deal with the charges on delivery just means they’ll be angry and may even reject the shipment.
Solution
Avalara calculates import tax, customs duty, and sales and use tax in a single platform and API call, at the point of purchase.
Be transparent about rates on international sales
Customers can see exactly how much their items will cost, creating a smooth experience and avoiding surprise charges on delivery.
Challenge
Getting international taxes and duties right is a hassle. Charge too little, and your sellers lose money. Too much, and they lose the sale.
Letting the customer deal with the charges on delivery just means they’ll be angry and may even reject the shipment.
Solution
Avalara calculates import tax, customs duty, and sales and use tax in a single platform and API call, at the point of purchase.
Attract B2B sellers
Give your marketplace a competitive edge by creating a better experience for B2B sellers, their vendors, and their customers.
Challenge
Tax-exempt sales can be difficult to process online. If the platform just applies tax, the seller’s accounting department has to issue credits or rebills. It’s time consuming and customers don’t like paying taxes they don’t have to.
Solution
Avalara CertCapture collects exemption certificates as part of the transaction process, whether the sale is made in person or online. CertCapture then works with AvaTax to automatically exempt tax on future sales if a valid certificate is on file.
Avalara VendorCapture enables FATCA compliance by collecting, validating, and maintaining Forms W-8 and W-9 for federal tax withholding compliance.
Attract B2B sellers
Give your marketplace a competitive edge by creating a better experience for B2B sellers, their vendors, and their customers.
Challenge
Tax-exempt sales can be difficult to process online. If the platform just applies tax, the seller’s accounting department has to issue credits or rebills. It’s time consuming and customers don’t like paying taxes they don’t have to.
Solution
Avalara CertCapture collects exemption certificates as part of the transaction process, whether the sale is made in person or online. CertCapture then works with AvaTax to automatically exempt tax on future sales if a valid certificate is on file.
Avalara VendorCapture enables FATCA compliance by collecting, validating, and maintaining Forms W-8 and W-9 for federal tax withholding compliance.
Tax authorities are focusing on marketplaces as revenue sources
In the wake of the South Dakota v. Wayfair, Inc. U.S. Supreme Court decision, states have turned their attention to marketplace platforms. Initially, sellers were responsible for collecting and remitting where they had nexus. But states are seizing on opportunities to hold marketplaces responsible for the activities of their collective sellers. As of August 2020, only seven states had yet to enact marketplace facilitator laws.
2021 legislative changes
And it's not just in the U.S. New UK obligations on marketplaces, requiring the platforms themselves to collect and report VAT on behalf of their sellers, take effect January 1, 2021, with similar EU rules following in July. See how this impacts your business, and find potential solutions.
Tax authorities are focusing on marketplaces as revenue sources
In the wake of the South Dakota v. Wayfair, Inc. U.S. Supreme Court decision, states have turned their attention to marketplace platforms. Initially, sellers were responsible for collecting and remitting where they had nexus. But states are seizing on opportunities to hold marketplaces responsible for the activities of their collective sellers. As of August 2020, only seven states had yet to enact marketplace facilitator laws.
2021 legislative changes
And it's not just in the U.S. New UK obligations on marketplaces, requiring the platforms themselves to collect and report VAT on behalf of their sellers, take effect January 1, 2021, with similar EU rules following in July. See how this impacts your business, and find potential solutions.
The Avalara marketplace solution includes
Compliance documents
We’ll help manage the documents you need to stay compliant.
Avalara State Sales Tax RegistrationAvalara CertCaptureAvalara VendorCapture
Tax calculation
Get the appropriate tax rate for transactions made in the U.S. or abroad.
Avalara AvaTax
Avalara Consumer Use
Avalara AvaTax Cross-Border
Returns management
Choose the level of returns management that’s right for your business.
Implementation
With a robust API and over 1,000 signed partner integrations, we can integrate with simple business environments or an omnichannel tech stack. We offer an assisted implementation process with a designated GoLive Coordinator and training sessions for the entire team.
Why Avalara?
Avalara was built for the ecommerce space. Our rates are delivered quickly, even during high sales periods like Cyber Monday, when in 2019, our system handled 298% more than the average daily number of tax engine calls for that year.
Avalara is also an SST certified service provider, which means participating states will help cover the cost of registration, sales tax calculations, returns preparation, and state filing and remittance for qualified businesses.
Our cloud-based, end-to-end solution automates every step of the compliance process:
Licensing and registration in multiple jurisdictions
Exemption certificate and vendor management
Managed Tariff Code Classification
Sales and use tax, cross-border taxes, VAT, GST, and specialty taxes
Audit documentation
Returns filing and remittance
“In my past lives, I’ve done a lot of integrations with some pretty nightmarish systems. Avalara was very, very easy. I had no trouble understanding the logic, which was clear and consistent.”
“Sales tax, because it’s based on revenue, is the elephant in the room. If you’re not compliant, it can get real ugly, real fast. Avalara, in that regard, helps me sleep better at night.”
Why Avalara?
Avalara was built for the ecommerce space. Our rates are delivered quickly, even during high sales periods like Cyber Monday, when in 2019, our system handled 298% more than the average daily number of tax engine calls for that year.
Avalara is also an SST certified service provider, which means participating states will help cover the cost of registration, sales tax calculations, returns preparation, and state filing and remittance for qualified businesses.
Our cloud-based, end-to-end solution automates every step of the compliance process:
Licensing and registration in multiple jurisdictions
Exemption certificate and vendor management
Tariff code classification
Sales and use tax, cross-border taxes, VAT, GST, and specialty taxes
Audit documentation
Returns filing and remittance
“In my past lives, I’ve done a lot of integrations with some pretty nightmarish systems. Avalara was very, very easy. I had no trouble understanding the logic, which was clear and consistent.”
“Sales tax, because it’s based on revenue, is the elephant in the room. If you’re not compliant, it can get real ugly, real fast. Avalara, in that regard, helps me sleep better at night.”