Set Solutions, using Avalara and Sage Intacct, is meeting its tax compliance and accounting obligations across 27 US states. At the same time, it says it is saving hundreds of thousands of dollars per year.

The Wayfair decision led us to Avalara for an automated tax solution because we knew that we were going to have to collect and remit in different states, but weren’t sure exactly how many,” said Missy Basone, Chief Financial Officer at Set Solutions, a Trace3 Company.

Working with both Avalara and Sage, Set Solutions has saved … valuable time, and resources that greatly affect our (ability to) grow (our) business.

The Wayfair ruling – some background

The U.S. Supreme Court ruled in favour of the state in South Dakota v. Wayfair, Inc. (in 2018). That ruling expanded the complexity of sales and other tax obligations for many businesses. The ruling gave each state the green light to adopt its own economic nexus law. This became a tax collection obligation imposed on businesses based solely on a certain level of economic activity within a state.

Today, every state with a general sales tax has imposed an economic nexus law. In turn, this imposes a tax obligation on every remote seller’s sales in each state in which that seller sells.

Yet each state defines and taxes differently. The responsibility falls to businesses to understand diverse definitions in order to determine the taxability of a product. For example, SaaS providers must figure out whether their business is providing a subscription, selling tangible property or something else altogether (like providing a communications service that might not be subject to sales tax but is subject to any number of federal, state and local communications taxes).

Set Solutions

Set Solutions is an advanced cybersecurity consulting and procurement and SaaS solutions provider. When Set Solutions first started with Avalara in 2019, it was collecting tax in just one state. Fast-forward to 2023, and Set Solutions has to meet tax compliance obligations in 27 states.

To satisfy the needs imposed by the Wayfair ruling, it selected Avalara and Sage to:

  • address state-specific tax complexity
  • satisfy its burgeoning tax compliance needs
  • save money and time.

With Avalara and Sage accounting software, Set Solutions has seen increased productivity within its finance and accounting department, saving dozens of hours a week on manual finance processes. Already it calculates it has saved more than $300,000 annually and 30 hours per week on tax compliance tasks. As a result, employees are able to focus on more important tasks, especially those associated with growing the business. This contrasts with what happened before – when the focus was on manually calculating taxes and filing returns.

Tax rates and rules are complex and vary widely by jurisdiction for physical goods, but when it comes to digital goods produced by SaaS companies like Set Solutions, the complexity of what is taxed and how, grows exponentially,” said Liz Armbruester, EVP of Customer and Compliance Operations at Avalara.

By using Avalara’s technology, Set Solutions has been able to offload the complexity of sales tax, while also saving hundreds of thousands of dollars and time that would have been spent managing a regulatory requirement that provides no benefit to its bottom line. And thanks to Avalara’s long-standing partnership and integration with Sage, Set Solutions was able to seamlessly manage tax on every invoice processed on the Sage platform.

For Set Solutions, Avalara and Sage provide seamless compliance

Set Solutions has implemented Avalara AvaTax, Avalara Returns, Avalara Exemption Certificate Management and Avalara Tax Research to meet its expanding tax obligations.
In addition to tax automation, Set Solutions sought accounting software which could scale with its growth and easily integrate to manage the appropriate tax on each transaction. For this Set Solutions implemented Sage Intacct’s cloud accounting and financial management solution. This automates and scales the business.

Today Set Solutions leverages Avalara from lead to cash, starting with calculating tax on quotes early in the business process. Sage Intacct’s cloud accounting and financial management solution invoices customers with the Avalara software calculating the appropriate tax on each invoice.

Sage Intacct is the leader in offering complete finance tech stacks for fast-growth SaaS companies. With growth comes increased complexity in billing, cash flow, and tax management. The power of an integrated solution with Avalara allows successful firms, like Set Solutions, to scale to meet the demands of their customers, investors, and tax authorities,” said David Appel, Global Head, Subscription and SaaS Vertical, Sage Intacct, Inc.

Enterprise Times: what does this mean

The business of Set Solutions involves procurement solutions tailored to commercial, enterprise government, and educational clients. This means operating across multiple states. The Wayfair ruling means that tax compliance is as diverse as the number of states that the company operates in…

What is interesting about is that Set Solutions has been able to introduce cloud-based accounting (Sage Intacct) with integration to tax compliance software (Avalara). Such an approach is much more attractive than having to undertake wholesale ‘self-integration’ from two or more software vendors. The more that this can occur, the greater the attraction of software vendors who have done this.


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