Just the mention of sales tax calculations might be enough to make business owners panic.
And for good reason, as Mike Sanders and Brent Reeves explained to Hypepotamus recently.
Sanders describes the current US sales tax system as a stack of “uneven pancakes” where each pancake represents a different tax district. “You have to cut through all the unique layers to understand all the different tax districts that may apply.”
The current tax landscape includes well over 11,000 of those tax jurisdiction layers.
Sanders and Reeves, both Atlanta-based entrepreneurs, have teamed up once again to build a better solution in the sales tax space.
Their answer? Using their experience and geospatial mapping to launch a software-as-a-service platform startup called CereTax.
“CereTax is built using a modern approach to take advantage of native cloud architecture. This design allows for API-driven integrations, rapid performance with high reliability, and the ability to handle sales tax, purchases (use tax), and specialty taxes for multiple verticals, all through one platform,” Sanders told Hypepotmaus.
Sanders and Reeves are no strangers to the tax space. Sanders sold his first company, Tax Partners, to Thomson Reuters in 2005. He then teamed up with Reeves to launch SureTax, a tax calculation software acquired by Wolters Kluwer in 2015.
They’ve been quietly building CereTax for the last year and a half, hiring a team of over 30 people and building out its entire geospatial technology from scratch. Others on the team have come from larger firms like KPMG, Ryan, and EY.
“There have been recent entrants into the sales tax automation space, but they are all focused on small businesses and the simpler sales tax model,” Reeves explained.
The rise of ecommerce has a lot to do with that growth. New regulations set out in 2018 by the Supreme Court case South Dakota v. Wayfair, Inc. mean that states can now require out-of-state sellers to collect and remit sales tax even if the seller has no physical presence in the state.
“Complex verticals like construction, communications, and manufacturing with advanced omnichannel business models…have enterprise level taxation challenges have been forced to choose between legacy players. There’s been very little innovation in over 20 years,” Reeves continued, “which makes CereTax a unique player in the space.”
Launching With Big Funding
CereTax is coming out of stealth mode with a $10 million seed round this month.
The investment round was led by Leaders Fund, a firm with headquarters in Atlanta and Toronto. Leaders Fund is also a lead investor in Atlanta-based CallRail.
“Leaders was the right fit because they really had a good feel and understanding of the marketplace that we were in, understood the nuance of what we were trying to solve, and fit with what Brent and I wanted to do both short and long-term,” said Sanders.
“The large seed round will go towards growing in multiple markets at the same time while integrating into more accounting and ERP platforms to help drive more user adoption”, added Sanders.
If you would like to learn more about CereTax check out this link.
