Your 3 Biggest Tax Questions Answered
Earlier this year, we announced that Barn2Door is a certified Avalara Partner, providing Farmers with access to the best-in-class tax solution to deliver accurate sales tax calculations in real-time. We recently sat down with Matt Hammond of Avalara on the Direct Farm Podcast. Matt discussed how the Barn2Door + Avalara integration saves Farmers time and enables them to manage taxes and ensure tax compliance seamlessly. Here are three questions that Matt answers in this episode:
1. Why is it important to use a third-party tax solution?
It can be challenging and overwhelming to keep up with the ever-changing tax rules and regulations. Varying by state, county, and even zip code, keeping up with taxes manually can be inefficient and prone to errors. As time is the #1 valued asset by Farmers, it’s essential to spend those hours on revenue-generating tasks. Filing your taxes (even though extremely important) does not generate revenue for your Farm.
Outsourcing and automating this part of your business can ensure the proper tax rates, increase tax accuracy, and even have the ability to file your returns on time. With over 4,000 product categories updated regularly, and whether you’re selling across county lines or even shipping to other states, a third-party tax solution is key to having peace of mind when it comes to your taxes.
2. How does Avalara support destination-based versus origin-based tax states?
Is your Farm located in a destination-based or an origin-based tax state? If you’re not sure, you can find out here. Destination-based states charge sales taxes based on where the product is being shipped. Essentially, it’s where your product transfers ownership. For origin-based states, tax rates are based on where the item is shipped from (aka the location of your Farm).
AvaTax will automatically calculate sales tax in real-time, no matter where your Farm (or Customers) are located. Constantly maintaining the rates, rules, boundaries, and regulations on your behalf, AvaTax will determine if your products are taxable and which rate should be associated with each item.
As Farm products are one of the most challenging products to determine tax rates for, think about how much time you’ll save with a solution that guarantees rate accuracy and ensures the most up-to-date rate for your business.
3. How can Farmers save time with Barn2Door + AvaTax?
With the Barn2Door + Avalara integration, Farmers can use AvaTax to apply appropriate tax rates, have access to on-demand reports, gaining visibility into transactions, liabilities, and tax exemptions, and charge rates based on geolocation (not zip codes).
Barn2Door and Avalara have built the integration with Farmers in mind, automatically updating tax codes, staying on top of boundary changes, and ensuring your Farm is prepared with the proper documentation in case of a tax audit. With the integration, Farmers can get hours back every week, not having to manually organize tax codes for each product nor worrying about paying taxes on time.
Avalara is an official partner of the Direct 2021 Farm Conference, where Matt Hammond will be a keynote speaker on August 3rd. Join us at Direct 2021 to hear from Matt and other notable industry speakers who will share insights and best practices on growing and managing direct sales.
Barn2Door powers Farmers with the software and the services to grow and manage direct sales. If you’re curious how we can help your Farm build a thriving direct-to-market business, watch this 5-minute video.