Groupon Manages Global Tax Reporting with Avalara
Today’s global economy is powered by numerous channels as consumers seek convenience in their shopping experiences. At the same time, ecommerce and marketplace sales have exploded in recent years with worldwide retail ecommerce sales projected to total more than $6 trillion by 2023, according to eMarketer. Groupon, a trusted local marketplace where consumers go to buy services and experiences that make life more interesting and deliver boundless value, is enabling this new era of commerce by connecting users with local merchants. With a global presence, Groupon wanted to partner with a software leader in tax determinations to help it manage jurisdictional complexities.
“The indirect tax landscape in the U.S. is rapidly transforming, which has expanded the complexity of tax obligations by jurisdictions and channels. The breadth of taxability determinations, ever-changing nature of tax rates in the U.S., and the onerous process of preparing and filing tax returns in multiple jurisdictions creates challenges,” said Brad Caproni, director of Global Indirect Tax at Groupon. “Partnering with Avalara removes the hassles associated with managing the returns process and enables us to reinvest our time in other important areas. Additionally, besides ongoing compliance, Avalara’s technology has been helpful in allowing Groupon to sell new products and services by removing the barriers of researching and making tax determinations in new verticals. Avalara is a great partner!”
For marketplaces such as Groupon, everything from selling to customers in a new jurisdiction to introducing a new product or service can create new or expanded tax obligations. Because Groupon interacts directly with consumers through its ecommerce platform, as well as through third-party merchants on its Groupon Goods Marketplace, the company is subject to economic nexus laws and other requirements stemming from the South Dakota v. Wayfair, Inc. U.S. Supreme Court ruling. Under these laws, Groupon is responsible for collecting and remitting sales tax based on the location of thousands of end customers in numerous jurisdictions across the U.S.
To stay compliant and continue serving customers throughout the U.S., Groupon implemented two Avalara products: Avalara AvaTax for calculating sales and use tax, and Avalara Returns for managing tax reporting and returns. The benefits include time and cost savings. More specifically:
● Avalara AvaTax is equipped to determine sales tax across the more than 13,000 sales and use tax jurisdictions in the U.S. — a process that can take some businesses months without automation technology.
● With Avalara Returns, Groupon doesn’t have to pay each jurisdiction individually. Groupon works with Avalara to consolidate all its returns and remittances for all jurisdictions.
Additionally, Groupon partnered with Avalara to create a custom tax solution for its Groupon Goods Marketplace. This cost-effective solution allows Groupon to collect and remit tax on behalf of marketplace sellers when applicable and lets marketplace sellers create their own AvaTax account within Groupon to manage their tax obligations. The custom solution has helped Groupon offer a broader range of goods through its marketplace and keep its merchants compliant.
“Groupon is one of the major providers powering ecommerce today. Whether it’s selling local experiences or providing a platform for third-party merchants to sell goods to customers, the company is subject to expansive and complex tax obligations that are constantly changing. By using Avalara’s technology, Groupon’s tax team has been able to reduce the burden of maintaining compliance, while also freeing up time for employees to focus on higher priority tasks,” said Frank Hanzlik, VP and GM, Global Partner Development, Avalara.
For more information about how Groupon uses Avalara to support tax compliance across all areas of its business, read the full case study.
Avalara (NYSE: AVLR) helps businesses of all sizes get tax compliance right. In partnership with leading ERP, accounting, ecommerce, and other financial management system providers, Avalara delivers cloud-based compliance solutions for various transaction taxes, including sales and use, VAT, GST, excise, communications, lodging, and other indirect tax types. Headquartered in Seattle, Avalara has offices across the U.S. and around the world in Brazil, Europe, and India. More information at avalara.com.