SWIPEBY Tackles Marketplace Tax with Avalara
In the past two years many retailers and restaurants have embraced omnichannel retailing and supporting features including curbside pickup. While many of the world’s largest retailers were able to quickly pivot, many SMBs were left with limited options due to the cost of sophisticated technology and staffing to offer curbside pickup. Recognizing this, SWIPEBY, a SaaS-based virtual drive-thru platform, created a cost-effective, easy-to-use application for small and midsize businesses to offer their customers. However, with rapid adoption of their platform by businesses across the U.S., SWIPEBY faced complex sales tax obligations and turned to Avalara to address licensing and tax calculation requirements.
“We saw an opportunity to help brick-and-mortar businesses meet customer expectations by creating a platform enabling drive-thru without breaking the bank,” said Carl Turner, founder of SWIPEBY. “When we launched, we experienced rapid growth, but were not prepared to handle the mounting sales tax obligations from marketplace facilitator laws as more businesses adopted our platform. Given the breadth of company types we serve, we needed an advanced, holistic tax compliance platform to address all of our tax requirements. Avalara was our choice from the start, and we’re now relying on their service to manage tax compliance across the U.S.”
For growing technology platforms like SWIPEBY, serving customers in new geographic areas or industry verticals can trigger new tax requirements. Today, 45 states, parts of Alaska, and the District of Columbia have active marketplace facilitator laws, which require marketplaces to collect and remit sales tax to authorities on behalf of their users. To date, SWIPEBY serves hundreds of customers across 30+ states.
To keep pace with SWIPEBY’s growth, the company implemented three Avalara products: Avalara Licensing for obtaining and maintaining business licenses; Avalara AvaTax for calculating sales and use tax; and Avalara Returns for managing tax reporting and returns. The benefits include time and cost savings for licensing, tax calculations, and returns. More specifically:
● As SWIPEBY expands into new geographies and tax types, Avalara Licensing helps the company understand its federal, state, county, and local license requirements, as well as aggregates the correct forms, applications, and fees for preparation and submission.
● AvaTax is equipped to determine sales tax across the more than 13,000 sales and use tax jurisdictions in the U.S. — a process that can take some businesses months without automation technology. SWIPEBY also sees added cost benefits by participating in the Streamlined Sales Tax (SST) program, which covers the cost of their Avalara services in 24 states.
● With Avalara Returns, SWIPEBY doesn’t have to pay each jurisdiction individually. SWIPEBY now makes a single ACH payment, which Avalara uses to remit taxes to each jurisdiction individually and on time.
“SWIPEBY sits at the intersection of two high-growth areas in ecommerce today — marketplaces and curbside pickup. Carl and his team quickly recognized the barrier tax compliance can place on growth and turned to tax technology to efficiently plan for future growth. By using Avalara to automate and stay ahead of new tax obligations, SWIPEBY can focus on what matters most: serving brick-and-mortar businesses,” said Meg Higgins, head of Global Business Development at Avalara.
For more information about how SWIPEBY uses Avalara to support tax compliance across all areas of its business, read the full case study.
