State and local governments collected approximately $137.7 billion in sales taxes in the first quarter of 2022, a 17% increase over the $117.7 billion collected in the same quarter of 2021, according to the US Census Bureau.
Like Rohit Bhadange, co-founder and CEO of Zampexplains that each state, county, and city has different tax jurisdictions that businesses must abide by more than 12,000 taxable counties.
They have to do this because of the South Dakota Supreme Court decision v. Wayfair created in 2018, stipulating that online merchants must register for a sales tax permit and then collect and remit sales tax to each jurisdiction.
Sellers do this when they meet two laws: physical nexus laws, where the seller would have a physical presence in the state through employees and warehouses, and/or economic nexus laws, in which the seller exceeds sales and/or transaction thresholds within the state.
Making it more difficult to comply is when districts regularly update their rates and rules. That is why Bhadange, Edward Lando and Clete Werts started Zamp in 2022, to develop an end-to-end platform for VAT lifecycle management for e-commerce, enterprise resource planning and marketplace platforms, including nexus monitoring, product categorization, rooftop -level tax calculation, registration and submission.
Bhadange told TechCrunch that companies using current software options can spend up to 500 hours a year to stay compliant. Online merchants can implement Zamp through integrations or an API and use it to calculate and aggregate sales tax across multiple sales channels, while Zamp monitors and communicates when a merchant needs to submit a request.
Bhadange and Lando are both at pre-seed investment firm Pareto Holdings, while Werts and other team members were early employees of Stripe-acquired TaxJar and Vista-acquired Avalara, as well as former state accountants, sales tax experts and research specialists.
Zamp joins companies like Stripe, Vista, Anrok and Taxdoo in providing tax compliance solutions to businesses. In addition to giving customers back the hundreds of hours spent submitting files throughout the year, Zamp sets itself apart from the competition by delivering its service through a single SaaS fee and customers don’t have to learn or use the software themselves. manage.
“Customers aren’t even sure they’re doing this accurately, so we’re the partner that’s going to track, monitor and notify them to make sure they’re always compliant,” Bhadange said. “We are making all the changes so that customers are safe, and we have even eliminated the annoying transaction fees that are common pain points for customers. We give customers back freedom from sales tax.”
The company is doing so after closing more than $4 million in new venture capital earlier this year. The round included Valor Equity Partners, Soma Capital, Day One Ventures and a group of angel investors including Truebill’s Yahya Mokhtarzada, OpenGov’s Zac Bookman, Shutterstock’s Jon Oringer and Ripple CEO Brad Garlinghouse.
Aside from Zamp having paying customers and a roster that includes Obvi, Sanzo, YumWoof, Gravity Grabber, and Little Hunter, Bhadange has been pretty mum about the company’s traction over the past year. Zamp will use the new funding to develop and automate its solution, hire new employees and prepare to support customers selling internationally.
“Our focus is largely on developing an automated solution and delivering a better experience,” said Bhadange. “We are building a more formidable team and rescuing as many customers as possible from the burden of sales tax compliance.”