Arts
and Crafts is huge business in the United States with approximately 129
million people participating in the hobby in 2014. Despite this, there
was no US home shopping television channel dedicated to catering to this
enormous market until Ideal Shopping Direct, launched the US version of
Create and Craft, its popular UK Arts and Crafts shopping channel.
However,
in preparing to enter this market, Ideal Shopping Direct encountered
new challenges, including the complex minefield of US Sales Tax. Avalara, a
leading provider of cloud-based software that delivers compliance
solutions related to VAT, sales tax and other transactional taxes, enabled
Ideal Shopping Direct to overcome these barriers and launch
successfully in December 2014, broadcasting to over 35 million homes.
“We
knew about local sales tax from personal experience of going to the US
on holiday, but we didn’t know the reality of the complexities
involved,” says Justin Hattee, Group Financial Controller at Ideal Shopping Direct. “Even
though VAT can be incredibly complicated, Sales Tax seemed ten times
worse. We hoped it would be one static rate but it soon became clear
that we were dealing with an entirely new, complex tax system.”
Avalara aided Ideal Shopping Direct with as it encountered:
Over 12,000 different tax jurisdictions – going down to street level
Tax holidays for specific items throughout the year
Different taxability classification of the same items in different states
100,000+ rules and boundary changes that occur every year
Avalara’s
professional services team completed a detailed nexus study with Ideal
Shopping Direct, helping to identify their sales tax liability in 12
states, due to some form of physical presence such as its head office,
broadcast locations, home workers, or attendance at industry shows and
conferences.
AvaTax™
integrates into pre-existing accounting systems, ERP and CRM providers,
and ecommerce software, delivering real-time sales tax decisions
automatically in the cloud. Not only this, but it provides an automated
returns filing process, which is vitally important for Ideal Shopping
Direct. Speed was also a critical factor. The whole process took just a
few months from initial contact with Avalara to the systems being live
ahead of their channel’s launch on the 29th December 2014.
Justin
Hattee adds: “We put the headline price on-screen for the viewers. Once
they complete the order, online or by phone, AvaTax instantly
calculates the applicable sales tax rates based on their address. Speed
of response is critical in this respect and has allowed us to offer our
best service to this new market.”
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