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Building a Next-Gen Sales Tax Practice

Chris Vignone, with 25 years of public and private sector sales tax experience, founded PM Business Advisors to specialize in state and local taxes, federal taxes, and strategic planning. As sales tax issues grew more complex, he saw increasing demand from clients for help filing their sales taxes.

Chris found a way to turn tax lemons into lemonade, dramatically growing the PMBA sales tax advisory practice and revenues, while also decreasing the labor and risk associated with sales tax filing for multiple business clients.

Tax challenges

Managing sales tax reporting for small businesses has been complex ever since ecommerce emerged in the 1990s. After the United States Supreme Court South Dakota v. Wayfair, Inc. ruling in 2018, and the ensuing state economic nexus legislation impacting ecommerce businesses, those complexities dramatically increased.

Chris noticed the impact. “Smaller businesses that once had tax filing obligations to only a few states now realized they had obligations in 20 or more states and sub-jurisdictions,” Chris says. “And larger enterprises were being overwhelmed with hundreds or more sales tax returns per month. They just were not prepared, did not have the resources to manage the tasks, and didn’t know where to turn, other than their accounting advisors, many of whom also didn’t have the expertise to manage these tasks.”

Chris often encounters businesses who should be reporting in multiple states but are out of compliance. He suspects it’s an even bigger challenge for international companies. “These businesses turn to us because we have the experience and resources to strategically guide them through these processes.”

PMBA was well-positioned to serve this increased demand for sales tax filing services, having provided these services for more than two decades. But to scale up, they needed to find ways to decrease the burden and increased risk presented by manual processes.

After more than 20 years working with a variety of sales tax software, spreadsheets, and other systems they had “cobbled together,” Chris realized they needed a singular solution to help them manage the filing processes for multiple clients, with dozens to hundreds of forms, across multiple jurisdictions.

The problem, he says, is that such a system didn’t exist. “Our process involved many manual functions, which often required converting file formats and filing returns individually for clients, often through various state websites that were tedious and time-consuming. We needed new technology, and a new model of compliance.”

Why Automation

In 2019, Chris discovered Avalara was developing two new systems specifically designed for accounting firms. PMBA joined the beta testing of Avalara Managed Returns for Accountants, a new solution that helps firms create or expand their sales tax services by automating the process.

“Avalara realized that there were different kinds of firms,” says Chris. “Some firms did not want to tackle sales tax, but because it is becoming more and more critical for their business clients, they needed to either partner with a SALT practice to manage those functions, or partner with Avalara for return preparation and filing.”

Chris continues, “There are firms like mine who have extensive sales and use tax expertise, but realize our clients are better served and our practice is more successful if we have Avalara handling the tedious and risk-prone filing processes, while we focus on providing advisory services. But we needed a streamlined way to do this.”

With Managed Returns for Accountants, Avalara handles the preparation and filing of all sales and use tax returns for an accounting firm’s clients. Avalara also manages remittance of tax funds to all jurisdictions. Firms can maintain and strengthen their relationships with their clients and retain managerial oversight of the filing processes.

Getting Results

With the advanced automation features in Managed Returns for Accountants, including direct integration with leading ecommerce, accounting, and ERP platforms, sales data flows in and returns and reports can be automatically generated for every jurisdiction where there’s a filing requirement. This further frees up PMBA resources from dealing with the most onerous, time consuming processes.

Chris notes that with Managed Returns for Accountants, it’s possible for his firm to handle thousands of returns or more per year. In the first two years, PMBA substantially increased its number of SALT clients, while also handling returns for clients of partnering firms. Chris says PBMA expects to see at least 50% growth in the second year. The firm also doubled its margins on these services since implementing Managed Returns for Accountants.

“In my experience, many accounting firms, large, small, and in between, have viewed SALT as a back seat item: A low-revenue, but high-risk service that they were reluctant to dive into,” he says. “But with the new automated, cloud-based systems from Avalara, firms can serve the needs of their clients whether they have sales tax expertise or not, without burdening or expanding their staff, and reduce the risks inherent to sales tax filing.” This allows firms to devote more time to more profitable engagements and advisory services.

Additionally, Chris says his staff love the automation features, especially for clients who are also using the Avalara AvaTax calculation engine. “There are a lot of reasons why accounting firms should consider adding Managed Returns for Accountants to their practice, starting with peace of mind because of the reduced risk. The automation features make the system easy to use for overseeing all due dates and return status for all clients, while also knowing that the returns are being prepared and remitted by Avalara, which I believe has the broadest expertise and technology available for sales and use tax management.”

“If your firm provides any business tax services or consulting,” says Chris, “your clients will expect you to be able to help them with their sales and use taxes. Managed Returns for Accountants is one of the most cost-effective, scalable, and risk-mitigating solutions on the market.”

Chris also adds, “I expect the demand for sales and use tax advisory services and filing is going to explode as businesses realize the risks of noncompliance. Firms that add Avalara Managed Returns for Accountants will be ready to serve these clients and build a successful sales and use tax practice, with strong revenue, low risk, and no increased burden on staff or resources.”


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