1. Avalara and Economic Nexus
An overview of the economic nexus ruling and why it makes sense to automate sales tax compliance

2. Partner Development Manager, Avalara
Introductions
Brandon Cole
Based in Durham, NC
Joined Avalara in November 2014
Spent the last 3 years as an Account Manager working with Avalara customers in Chicago and Minneapolis
Brandon Cole
Partner Development Manager, Avalara

3. Economic Nexus - Explained Automate with Avalara Schedule a Meeting
Who is Avalara?
Physical Presence
Economic Nexus - Explained
Automate with Avalara
Schedule a Meeting
Today, we will be covering
The state of tax compliance
Why Avalara
Our partnership
Identifying prospects
and leaving some time at the end for questions.

4. More than 700 pre-built integrations
Founded in 2004
Over 20,000 active customers
More than 700 pre-built integrations
9.05 billion transactions processed in 2018
21.96 million exemption certificates managed
$36.8 billion in taxes prepared for remittance in 2018
So who is Avalara?
We were founded in 2004 to tackle the problem of sales tax and now serve more than 20,000 active customers through more than 700 pre-built integrations.
Our cloud solutions processed 6.7 billion transactions in 2017 alone, managed more than 18 million exemption certificates, and prepared $28.9 billion in taxes for remittance.
If there’s one thing we know, it’s tax. 4
© Avalara CONFIDENTIAL & PROPRIETARY

5. What you need to know (and do) to do to be fully-compliant
Why is tax so complicated though? Let’s take a look at the state of tax compliance today.

6. What is nexus and what triggers it?
Sales tax nexus is the connection between a seller and a state that requires the seller to collect and remit tax on sales made in that state.
Triggers – physical presence:
Property/real estate
Remote employees/sales reps
Event attendance
Storing inventory
Delivery and distribution
And more!
©Avalara. Confidential and proprietary. 6

7. Rates Why sales tax is so hard to figure out?
When most people thing about sales tax compliance, they focus on calculating the tax and specifically about using the correct rate.
But rates are just the tip of the iceberg.
Let’s take a minute to explore some of the key sales tax challenges your clients might be facing.
©Avalara. Confidential and proprietary.

8. State and local tax prep and filing
Tax calculations 1
Nexus 6
Audit readiness 2
Product taxability
Nexus
Product taxability
Jurisdiction assignment
Exemption certificates
State and local tax prep and filing
Audit readiness 5
State and local tax prep and filing 3
Jurisdiction assignment 4
Exemption certificates
©Avalara. Confidential and proprietary.

9. Economic Nexus
Why is tax so complicated though? Let’s take a look at the state of tax compliance today.

10. ECONOMIC NEXUS
WHAT IS IT?
Economic nexus is a tax collection obligation imposed on sellers based on their level of economic activity within a state.
Unlike physical presence, it is based entirely on sales revenue, transaction volume, or both.
Like most sales tax laws, economic nexus criteria vary by state. All aim to level the playing field between non-collecting out-of-state sellers and brick-and-mortar businesses.
What’s economic nexus? It is a tax collection obligation imposed on sellers based on their level of economic activity within a state. Unlike physical presence, it is based entirely on sales revenue, transaction volume, or both.
Like most sales tax laws, economic nexus criteria vary by state. All aim to level the playing field between non-collecting out-of-state sellers and brick-and-mortar businesses. 10

11. States in action post-ruling
States enforcing economic nexus starting:
July 1, 2018 – Hawaii, Maine, Vermont September 1, 2018 – Mississippi September 30, 2018 – Michigan October 1, 2018 – Alabama, Illinois, Indiana, Kentucky, Maryland, Minnesota, New Jersey, North Dakota, Washington, Wisconsin November 1, 2018 – North Carolina, South Dakota December 1, 2018 – Colorado, Connecticut January 1, 2019 – Georgia, Iowa, Louisiana, Nebraska, Utah, West Virginia January 15, 2019 – New York February 1, 2019 – Wyoming April 1, 2019 – California October 1, 2019 – Texas All of these states have different statutory start dates and thresholds. See Avalara’s online grid for updates.
South Dakota was the first to get permission from the court but several other states are following their lead with similar economic nexus rules.
Here’s a visual overview of states that have various nexus laws in place as of January 17, You’ll notice that there are a number of states without those laws in place. It’s possible that will change over the next few months.
We’re already seeing some states in action after the South Dakota v. Wayfair, Inc. ruling. Vermont, Kentucky, and Hawaii have laws that took effect July 1st, less than 10 days after the ruling was made.
©Avalara. Confidential and proprietary.

12. Automate with Avalara
Now why Avalara and what can we do to ease these pains?

13. Avalara Sales Tax Suite
End-to-end sales tax automation
AvaTax
tax calculation
CertCapture
exemption management
Returns managed filing
Certificates
Request
Customer info
Transaction info
Taxes
Research tax rates,
boundaries,
and rules
Research filing rules, forms
Returns, remittances
Your customers
22 million exemption certificates
Government
$37 billion in taxes prepared for remittance
**NOTE** Edit the highlighted area by adding the connector logo for the partner you’re presenting to and delete the box afterward; if no logo needed, delete the box.
The Avalara Sales Tax Suite provides a cloud-based end-to-end tax compliance solution.
**Discuss each component, how they integrate, and how they support the tax compliance process as the diagram builds**:
AvaTax determines and calculates taxes
Your systems are integrated to Avalara’s service in the cloud.
At the point in your business process when taxes are needed, say invoicing or on-line checkout, a request is made
AvaTax evaluates the transaction information, determines the taxes, and returns that to your system
In order to make this work, Avalara is constantly monitoring and updating tax rates, rules, and boundaries
CertCapture manages your exemption certificates
When a certificate is about to expire, a request is sent to your customer
Your customer clicks a link in an directing them to the CertCapture site where they can provide the certificate information on-line
When AvaTax is calculating tax, it checks CertCapture to see if the transaction should be exempt, and if so, exempts the tax
In order to stay in-synch with your customer master data, CertCapture is designed to pull customer info from your ERP or accounting system
Returns manages preparation and filing of your returns
When it’s time to file, you’ll review a liability report based on the tax data from AvaTax, and approve filing
Returns will then prepare and file your returns and submit your payment to the appropriate jurisdiction
In order to make this work, Avalara is constantly monitoring and updating filing rules and forms
Your systems
9 billion transactions
ERP, ecommerce, POS, billing
©Avalara. Confidential and proprietary.

14. Avalara Professional Services
When tax challenges require a specialist, Avalara provides professional services that work in conjunction with Avalara technology to solve complex tax compliance issues.
Back Filing Services
Voluntary Compliance Services
Sales and Use Tax Nexus Study
Name and Address Change Services
Customer Tax Recovery Services
Tax Registration Monitoring and De-Registration
Tax Code Mapping
Sales Tax Certificate Management
Avalara provides a range of professional services to help address unique or complex tax compliance issues that are not automation ready. However, the Avalara range of services do not support 100% of all customers needs. Any service request that is not listed below will be referred to a Avalara Strategic Accounting Partner. Contact Ray Bagley for the latest list of partner contact list.
©Avalara. Confidential and proprietary. 14

15. SST-based sales tax services
In up to 24 states, your business may qualify for:
Free registrations
Free tax calculations
Free returns preparation and filing
Audit assistance and response
Uniform definitions and rules
One registration and identification #
Economic Threshold Based on Gross Sales
As of May 29,2019
©Avalara. Confidential and proprietary. 15

16. Avalara Demo
Now why Avalara and what can we do to ease these pains?

17. Schedule a follow up meeting
Would like to learn about subscribing to Avalara for your business?
Brandon Cole| Partner Development Manager c: e:
Schedule a meeting:
Avalara | Tax compliance done right
©Avalara. Confidential and proprietary. 17

18. Thank you!