TaxJar Integration

Overview

According to a recent survey, 76% of U.S.-based businesses know the difference between physical and economic nexus.  But the number drops significantly to 42% among small businesses.  While economic nexus may be a hot topic for many, there are many ways companies establish an obligation to collect and remit sales tax.

For a small business, understanding how a 2018 Supreme Court decision established new nexus triggers, how remote employees can affect your tax obligations, how storing inventory in a warehouse, or using a fulfillment center can affect nexus, or how states are enforcing affiliate nexus, click through nexus, trailing nexus, etc. is overwhelming.

The only way a small business can survive in the current sales tax environment with exposure to thousands of tax jurisdictions, is with an automated system like TaxJar.  One that spans across all sales channels calculating sales tax, tracking nexus, and filing and reporting sales tax obligations as necessary to maintain sales tax compliance.

Challenge

WD Music (WDM) found themselves in a situation where they needed to determine sales tax liability for whichever jurisdiction, they had a nexus.  The bulk of their business was either wholesale or international, but they still had a fair amount of retail sales which could expose them to sales tax liability.  They wisely choose TaxJar to handle their sales tax filing and reporting.

In addition to taxable sales, they needed to account for returns for those sales.  Though their return rate is comparatively low, returns act as a credit by reducing taxable sales so including returns was important.

WDM quickly realized uploading all sales & returns to TaxJar would cause a huge burden for their staff.  The time and resources required to cull through their sales & returns determining which were taxable was monumental.  Most of their sales were not taxable so they decided it would be best to upload retail sales only to TaxJar.  They excluded wholesale and international sales since there was no tax liability with those orders.

WDM needed a process to perform an initial upload of taxable sales.  Once the initial upload was complete, they needed a process to periodically check their sales database for new taxable orders and automatically upload those orders to TaxJar.  Uploading taxable sales to TaxJar in a timely is mission critical for their business.  They realized their best course of action moving forward is through automation.  They asked us to automate this process for them.

Solution

We created the TaxJar Synchronizer which monitors their sales database 24/7/365 for taxable sales and related returns with no staff intervention or monitoring required.  Rules and filters were programmed into the Synchronizer to identify taxable sales and related returns so non-taxable sales could be excluded from the upload to TaxJar.

The TaxJar Synchronizer is a turnkey solution solving a crucial requirement to upload taxable their sales to TaxJar.  The Synchronizer is set to check their sales & returns every 60 minutes by default which can manually be changed if necessary.  Additionally, we included a method to initiate manual overrides in case an immediate upload to TaxJar is needed.

Several different technologies were used to implement the TaxJar Synchronizer.  The sales data is store in Microsoft SQL Server, so we filtered sales & returns data using SQL to retrieve new sales & returns since the last upload to TaxJar.  Once the data is retrieved, we package the data into JSON format according to TaxJar requirements for sales, items, and returns.  The JSON data is then uploaded to TaxJar using their REST API.  Error handling was included so appropriate actions can be taken for upload failures.

Bottom Line

The TaxJar Synchronizer eased WDM data process burden by automatically collecting and uploading taxable sales to TaxJar.

Automated TaxJar uploads is one less worry for WDM’s staff.  The TaxJar Synchronizer frees staff to focus on other tasks better suited for human intervention.  Devoting staff time to a process which can be automated is both resource intensive and expensive.  In a situation like this, automation is the obvious solution.

To learn more about how we can help with your business automation, 3rd party integrations, custom development, and reporting, contact us.