Don’t get caught off-guard raising your next round or preparing for an IPO. It’s more than just winning customers, it’s about staying ahead of fraud, risk, and compliance. Join us for a conversation about the most overlooked finance and compliance items when scaling your SaaS company.

1. 3 Revenue & Compliance “Must Haves”
to Go from Series A to IPO
Sara Strope
CMO
TaxJar
@sarabstro

2. 500+ finance leaders
SaaS and e-commerce

3. No matter your growth stage or funding round….

4. It’s never too early to be compliant
Businesses recognize tax
compliance as a top priority
3 in 4
4

5. The need to be compliant is increasing
32% YoY growth in
eCommerce sales
$700
B
2020 eCommerce
sales
$46B Decline in state tax
revenue in 2020
$400B Estimated internet
sales tax gap
It’s not a question of
“if” you’ll be audited,
but when.

6. It’s never been harder to be compliant
● Thresholds and
qualification criteria
vary by state and
country
● Registration
processes and
timelines also vary
Many addresses in “Knoxville, TN”
actually fall outside of the sales tax
jurisdiction of Knoxville and are taxed
differently as a result.
● Customer and product
exemptions vary by
jurisdiction
● Exemptions may have
strict usage
● Sales tax holidays
● Jurisdictions often do
not conform to state,
county, or zip code
boundaries
● Must be “rooftop level”
to be fully accurate
● Rates must be
accurate and real-
time, all the time
● Poor performance
jeopardizes
checkout experience
● Filing and reporting
rules vary by
jurisdiction
● Manual, time-
intensive, and costly
process for
businesses
MONITOR NEXUS ASSIGN EXEMPTIONS DETERMINE JURISDICTION CALCULATE RATE REPORT AND FILE
In CT, SaaS for personal use is taxed at
the full state rate, but SaaS for
business use is only taxed at the rate
of 1%.
There are over 500 (and growing)
sales tax rate changes every year.
These also create a downstream
impact on state filing processes.

7. 3 Compliance Must-Haves
Know about
nexus
1
Automation in
advance of
growth
Plan for
compliance
changes
3
2

8. Know about nexus

9. Finance leaders on compliance
Took 3 months to get out of arrears.
You can’t start collecting until you’re
out of arrears. It’s not just that you
might be audited, but you might not
be able to move forward in your
business.”
Voluntary Disclosure Agreements took 8
months. How many times do I have to ask
to give you money?
“
“
“ “I wish someone in my orbit had
been more honest about this,
whether it be our accountants, our
lawyers, our sales tax provider –
somebody.”
One of the first 5 things I knew I had to do
was get this company compliant.
“

10. SaaS is taxable in 23 states, but definitions vary

11. What is Nexus?
Sales Tax
Nexus
Economic
Nexus
Physical
Presence
occurs when a company
has a “physical presence”
or “economic nexus”
within a state
is a state defined amount of
sales - either revenue based
and/or transaction volume -
threshold within a state
could include (employees,
office, iconference
attendance, warehouse,
servers, etc.)

12. Sales tax obligations vary by state
California
$500,000/year in
gross revenue on the
previous or current
calendar year’s sales
Illinois
$100,000/year in gross
revenue, OR makes sales
into Illinois in more than
200 separate
transactions in the
previous twelve months
Connecticut
$100,000/year in
gross revenue AND
200 or more separate
transactions on the
previous calendar
year’s sales

13. 13
Got Nexus? Time to follow the sales tax lifecycle

14. Recommended Action:
Do a nexus study
● Register for sales tax permits where
you have nexus and consider
registering where you may be
approaching nexus in new states
● For specific sales tax advice regarding
your business, consider consulting a
sales tax expert

15. Plan for compliance changes

16. Top sales tax challenges ranked*
State registrations
Integrating data sources /
important transactions from
an eCommerce platform to
a sales tax platform
Calculating sales tax rates
Understanding nexus
determination (physical
and economic)
Monitoring nexus
thresholds and
qualification criteria
Reporting and filing
taxes
Assigning exemptions
Registering for a
sales tax permit
Keeping pace with the new digital economy means ever-
changing taxability.
16
1
2
3
4
5
6
7
8

17. Make a plan for compliance at these milestones
17
Sales growth: regular review of sales into
key jurisdictions
Launching in new markets: global
availability
Fundraise or acquisition: diligence
preparation
1
2
4
New employee / office location
3
Legislative changes
5

18. Recommended Action:
Compliance health check
● Make a plan to regularly review and
update compliance requirements and
positioning
● Proactively prepare for the compliance
implications of business changes like
fundraising, new offices, and more.

19. Automation in advance

20. SaaS leaders on staying ahead
I don’t really care about speeds and
feeds. I want to stay compliant. For any
new transaction today, I want to be
compliant. This prevents future liability.
From this point forward, I put this in place
so I can be in compliance ALWAYS”
“
“Our controller basically wants
everything automated. So if you can
integrate the journal entries into
NetSuite, take care of Shopify, and file
the taxes for us…that’s what we want.”
“

21. There are many ways to get help with compliance
Internal Finance Team Tax Consultants Automation Platforms
● Controller
● Tax Manager
● Finance Leader
+ The Big 4

22. 22
Automation creates efficiency and confidence
64% who use
automation feel more
confident & prepared
70% of finance leaders
use automation
software to be more
efficient

23. Recommended Action:
Evaluate sales tax
automation vendors
Are you using automation and technology to
reduce manual work and potential errors in
your compliance processes?
Compliance Automation Checklist
1. System reliability & security
2. Up-to-date sales tax rates
3. Smart product tax
categorization
4. API driven flexibility &
documented integrations
5. Easy to use reporting
6. Automated filing
7. Nexus threshold indicators
8. Exceptional customer support

24. Key Takeaways
1. Go ahead, geek out a little. Invest in understanding your taxability and where you have
economic nexus.
2. Create a plan to stay compliant at each stage of growth. Be prepared for audits and due
diligence.
3. Leverage experts + technology to get compliant. Utilize automated tools to stay
compliant.

25. THANK YOU