Charge the Correct Sales Tax at Checkout: Avalara + NMI Integration

In today’s globalised economy, businesses are increasingly selling products and services across borders. While this opens up exciting new revenue streams, it also introduces a complex web of tax obligations—especially in the United States, where sales tax rules vary not just by state, but often by city and county.

For businesses operating online, ensuring that the correct sales tax is charged at checkout is not just a best practice—it’s a legal necessity. Failure to do so can result in fines, audits, and reputational damage.

That’s where Avalara comes in. And when paired with the NMI payment gateway—via a unique integration offered by Payments in the Channel—businesses can automate tax compliance and ensure every transaction is accurate, seamless, and compliant.

The Challenge of International and U.S. Sales Tax

Managing sales tax across jurisdictions is one of the most complex aspects of running a global or multi-state business. Here’s why:

Global Complexity

• Different countries have different tax systems (e.g., VAT, GST, sales tax).
• Thresholds for tax registration vary by region.
• Filing requirements and deadlines differ widely.

U.S. Complexity

• Over 13,000 tax jurisdictions in the U.S. alone.
• Taxability rules vary by product and service type.
• Nexus laws require businesses to collect tax even without a physical presence.

⚠️ A 2022 Avalara study found that 72% of businesses selling online struggle to keep up with changing tax rules.

How Avalara Helps

Avalara is a leading provider of automated tax compliance solutions. Its cloud-based platform integrates with e-commerce systems, ERPs, and payment gateways to handle tax calculation, collection, and remittance.

Key Features:

• Automated Tax Calculation: Avalara calculates the correct tax rate in real-time based on the customer’s location and the product or service being sold.
• Tax Registration & Filing: Helps businesses register in new jurisdictions and automates the filing of tax returns.
• Real-Time Updates: Avalara’s tax engine is constantly updated to reflect the latest changes in tax laws and rates.
• Product Taxability Mapping: Understand which products are taxable in which jurisdictions—critical for SaaS, digital goods, and bundled services.

The Unique Advantage: Avalara + NMI via Payments in the Channel

While Avalara integrates with many platforms, Payments in the Channel offers a unique capability: we can add a “brick” that connects Avalara directly to the NMI payment gateway.

Why This Matters:

• Real-Time Tax at Checkout: Charge the correct U.S. sales tax instantly, even on complex transactions.
• No Manual Reconciliation: Tax is calculated and applied automatically—no need to adjust invoices or issue refunds later.
• Unique to Us: While Stripe offers an Avalara link, our integration with NMI is unique and tailored for businesses using NMI’s flexible, white-label gateway.

This integration is ideal for SaaS companies, VARs, and e-commerce platforms that need to scale across U.S. states without building custom tax logic.

Benefits for Businesses

Reduce Complexity

• Automate tax calculations and compliance.
• Eliminate manual lookups and rate tables.
• Simplify multi-jurisdictional tax management.

Minimise Risk

• Avoid undercharging or overcharging tax.
• Reduce the risk of audits, penalties, and customer disputes.
• Stay compliant with ever-changing tax laws.

Enhance Customer Experience

• Provide accurate, transparent pricing at checkout.
• Avoid surprise charges or post-sale adjustments.
• Build trust with customers through tax accuracy.

Use Case: A SaaS Company Expanding Across the U.S.

A SaaS company based in the UK begins selling to customers in the U.S. After crossing economic nexus thresholds in several states, they’re legally required to collect sales tax.

By integrating Avalara with NMI via Payments in the Channel:

• They automatically calculate and apply the correct tax at checkout.
• Avalara handles registration and filing in each state.
• The finance team saves hours each month on tax compliance.
• Customers receive accurate invoices with no surprises.

The Future of Tax Compliance

As digital commerce continues to grow, tax compliance will only become more complex. Governments are increasing enforcement, and customers expect transparency.

The future lies in automation and integration:

• Real-time tax engines
• Embedded compliance in payment flows
• Global-ready platforms that scale with your business

Businesses that automate tax compliance today will be better positioned to scale tomorrow.

Conclusion

Managing international and U.S. sales tax is a complex but essential task for businesses operating in a global market. Avalara’s tools, combined with our unique integration with the NMI payment gateway, provide a powerful solution to simplify this process.

At Payments in the Channel, we help businesses charge the correct sales tax at checkout—automatically, accurately, and compliantly. Whether you’re expanding across U.S. states or selling globally, our Avalara + NMI integration ensures you’re always tax-ready.

🔗 Learn more at https://www.paymentsinthechannel.com