How a Fast-Growing SaaS Company Automated Multi-State Sales Tax with Avalara
Sales tax compliance is rarely top of mind for SaaS founders. Growth is the priority. Customers are signing up nationwide. Teams are hiring remotely. Revenue is climbing.
Then suddenly, investors ask questions.
This SaaS sales tax case study shows how Resolve Works helped a rapidly scaling SaaS company uncover hidden sales tax exposure, resolve historical risk, and implement Avalara to automate ongoing compliance across multiple states.
The Situation
Rapid Growth Without Sales Tax Visibility
The client was a B2B SaaS company offering subscription-based services to customers across the United States.
Company profile:
- Series B SaaS company
- Founded in 2020
- Grew to more than $10M in annual recurring revenue
- Fully remote workforce with employees in 17 states
- Customers located in nearly all 50 states
Like many SaaS companies, the team focused on product, revenue growth, and customer acquisition. Sales tax compliance had not kept pace with expansion.
The Challenge
Hidden SaaS Sales Tax Risk Across Multiple States
As the company scaled, several issues surfaced:
- Sales tax was being collected and remitted in only three states
- No system existed to track economic nexus thresholds by state
- No formal process for monitoring new sales tax obligations
- Risk of audit exposure, back taxes, and penalties
- Growing concern from investors during diligence conversations
Because SaaS sales tax rules vary by state, the company had unknowingly triggered economic nexus in many jurisdictions simply through revenue growth.
“Many SaaS companies do not realize they have triggered nexus until investors start asking questions,” said Jillian Mittelmark, CEO and founder of Resolve Works. “By then, the risk can feel overwhelming.”
Why It Mattered
Investor Confidence Was at Stake
At this stage of growth, compliance gaps posed real business risk:
- Potential penalties and interest
- Delays in fundraising
- Increased scrutiny during diligence
- Leadership distraction during a critical growth phase
Unaddressed sales tax compliance could have resulted in tens of thousands of dollars in penalties and slowed the company’s momentum.
The Resolve Works Approach
Step 1: Conducting a SaaS Sales Tax Nexus Study
Resolve Works began with a comprehensive sales tax nexus analysis.
Our team:
- Reviewed sales activity across all states
- Identified both physical and economic nexus triggers
- Determined when state thresholds had been crossed
- Assessed historical exposure by jurisdiction
The analysis revealed that the company had established sales tax nexus in 20 additional states where it was not registered.
Step 2: Resolving Historical Exposure with VDAs
To address past exposure, Resolve Works recommended Voluntary Disclosure Agreements (VDAs).
A VDA allows companies to voluntarily disclose sales tax liability in exchange for:
- Reduced or waived penalties
- Limited lookback periods
- Avoidance of audit risk
Resolve Works managed the entire VDA process, including:
- Initiating contact with state tax authorities
- Preparing historical sales data by state
- Completing filings and registrations
- Coordinating approvals and payments
Through VDAs executed in eight states, the client avoided an estimated $25,000 in penalties.
“VDAs are about fixing the past without creating new problems,” said Jillian. “Handled early, they dramatically reduce risk.”
The Go-Forward Solution
Implementing Avalara for SaaS Sales Tax by State
With historical exposure addressed, the next priority was long-term compliance.
Resolve Works implemented Avalara, a leading sales tax compliance software designed to scale with SaaS growth.
Why Avalara:
- Automated sales tax calculation by jurisdiction
- Ongoing monitoring of economic nexus thresholds
- Direct integration with QuickBooks Online
- Automated filings and remittance
Avalara Implementation Process
Resolve Works handled the implementation end to end:
- Configured the company’s products and services in Avalara
- Mapped taxable jurisdictions and state-specific rules
- Integrated Avalara with QuickBooks Online
- Tested tax calculations for accuracy
- Enabled automated filing and remittance
- Prepared customer communication templates
“With Avalara in place, sales tax compliance went from manual and reactive to automated and proactive,” said Jillian.
The Results
From Risk to Scalable Sales Tax Compliance
After implementation, the company achieved:
- Full sales tax compliance in all required states
- Approximately $25,000 saved through VDAs
- Automated monthly filings with no manual spreadsheets
- Proactive monitoring of new nexus triggers
- Increased confidence during investor discussions
What started as a compliance clean-up became a long-term operational win.
What Other SaaS Companies Can Learn
Growth Creates Sales Tax Complexity
As SaaS companies scale, compliance complexity grows with them. Manual tracking cannot keep up.
VDAs Can Prevent Costly Mistakes
Voluntary disclosure is far less expensive than waiting for an audit.
Automation Makes Compliance Sustainable
Sales tax compliance software like Avalara protects growing SaaS companies as they expand into new markets.
“When compliance is automated, finance teams can focus on strategy instead of spreadsheets,” said Jillian.
Why Resolve Works
Resolve Works specializes in SaaS accounting and compliance for growing subscription businesses.
We combine:
- SaaS-specific expertise
- Sales tax compliance strategy
- Automation-first implementation
- Hands-on support and monitoring
“We do not just check boxes on compliance,” said Jillian. “We build finance systems that scale with growth.”
Sales tax compliance does not have to slow growth when the right systems are in place.
