Ideal Shopping Direct automates its sales tax to enter the US market

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 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, 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."

Avalara AvaTax instantly helped Ideal Shopping Direct process transactions quickly and efficiently with the correct Avalara's indirect tax compliance solutions provide businesses with a single user-friendly platform to manage key governmental compliance obligations, including tax determination, exemption certificate management and tax return preparation, filing and remittance.

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