Case Study – Large Mid-Size Business
Founded in 1993, Pure Romance is a large multi-level marketing company. Similar to Avon, The Basket Company and Mary Kay, Pure Romance uses a large network of independent consultants who sell and distribute the company products via in-home parties. So that its network of thousands of nationwide distributors do not view the need to deal with sales tax as a barrier to becoming a distributor, Pure Romance assumed a voluntary sales tax compliance obligation not only in each state, but in virtually each local jurisdiction in the nation.
The Company has corporate reporting obligations only in Ohio, the single state of operations of the company. However, Chris Cicchinelli, the Company’s President, says that its strategic marketing initiative led the Company to assume the sales tax reporting obligations for its distributors who are all over the United States. They did so as Pure Romance concluded that one of the considerations that caused concern with would-be distributors was the need for sales tax compliance and dealing with all of these requirements. If the Company could assume this responsibility, and alleviate this concern, marketing research indicated that the company would significantly increase its network of distributors, resulting in an increase of sales revenue.
Cichinelli tasked John Bolger, the company’s outside accountant, with determining how they could perform this task in a reasonable manner. Bolger’s initial research indicated that assuming this vast compliance responsibility, filing tax returns in nearly 300 different taxing jurisdictions each month would result in enormous complexities. This effort would require the company to employ at least 3 full time employees to be dedicated to these efforts alone, including tracking and maintaining tax rates; generating and filing tax returns and responding to questions and issues from the company distributors and the taxing agencies.
Bolger’s research led him to Exactor. He says that of all the vendors he interviewed, he “liked Exactor’s approach, how they made things easy from the point of creating the account, through the monthly compliance efforts.”
Cichinelli says that it is the goal of the company that the company sales distributors do not face any sales tax program – “With the Exactor service, we have achieved that goal.”
With the Exactor compliance service, Pure Romance has access to an enterprise level solution at an affordable cost. Pure Romance benefits from Exactor’s complete tax management services. Exactor has served as the first line of response to state inquiries, saving Pure Romance many work hours each month in having to research and respond to each of these inquiries. Exactor’s professionals are always at hand to answer questions about tax rates and obligations that seem to constantly arise from the vast network of Pure Romance distributors.
Mr. Bolger says that Exactor is “always responsive, and willing to work through any question and issues.” Integration was easy and seamless, working “very smoothly.” Mr. Bolger says that he is not a technical person by background, but finds the Exactor resources to be very informative and easy to use. He concludes that “without Exactor, the company could not have taken upon itself what we wanted to achieve, resulting in high levels of accurate, and significantly low cost of, compliance while providing the company with a strong marketing and recruiting tool. Exactor worked with us so that we could leverage upon a tax vendor to create a marketing advantage.”