Manufacturing Sales Tax: Kintsugi is the Top Choice for Manufacturers
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Who is PickSmart?
PickSmart, based in Shenzhen, China, is a leading manufacturer specializing in intelligent hardware products and system solutions. Their product portfolio spans a range of industries, including retail, healthcare, and warehousing, offering cutting-edge technology designed to enhance operational efficiency. As they grew globally, PickSmart’s operations expanded into multiple countries, each with their own set of sales tax regulations. This created significant challenges in managing sales tax compliance, particularly around manufacturing-related exemptions, use tax on equipment, and tangible personal property.
Being a manufacturer, PickSmart faced the added difficulty of staying compliant with tax rules across regions while keeping track of sales tax exemptions for their machinery, equipment, and R&D-related purchases. Manually managing these processes became unsustainable, and the risk of financial penalties was high. Seeking an automated solution, they found Kintsugi, a platform known for its ability to streamline tax compliance, automate exemption tracking, and integrate smoothly into their existing systems. Kintsugi’s platform provided the flexibility and accuracy that PickSmart needed to support their growth without the burden of tax mismanagement.
Handling Use Tax Exemptions is Challenging
Manufacturers like PickSmart often face significant hurdles when dealing with sales tax, use tax exemptions, and claiming tax credits. Each region in the United States has its own sales and use tax rules, and they had to manage exemption certificates for equipment, machinery, and materials used in the manufacturing process. Furthermore, there were complexities around use tax for out-of-state equipment purchases and the treatment of tangible personal property, such as computers used in production, including the management of sales tax exemptions for replacement parts. The manual processes PickSmart relied on was prone to errors, which increased the risk of non-compliance and financial penalties.
“Handling tax exemptions manually became too risky as we expanded. We needed precision for our machinery, equipment, and out-of-state purchases, but the manual approach wasn’t cutting it.” — PickSmart
In addition to sales tax exemptions for items involved in production, they needed to track exemptions related to research and development (R&D) supplies and quality control equipment. They found it increasingly difficult to keep up with the evolving tax regulations, especially when considering wholesale and resale tax deductions. PickSmart required a solution that could automate these processes and ensure compliance across multiple jurisdictions, prompting them to seek a partner that specialized in handling the specific tax needs of manufacturers.
Kintsugi’s Automation Empowers Manufacturers
Kintsugi provided PickSmart with a comprehensive tax compliance platform that streamlined their entire tax management process. The software automated the calculation and application of sales tax exemptions, particularly for manufacturing equipment, replacement parts, and materials used in production. By handling the specific requirements for exemptions related to quality control and R&D supplies, Kintsugi ensured that PickSmart remained compliant everywhere the operated This level of automation helped eliminate manual errors and reduced the time and resources spent on tax filings.
“From tracking exemption certificates for equipment to handling use tax on out-of-state purchases, we were constantly at risk of non-compliance. Kintsugi’s automated solution gave us the accuracy and confidence we needed to manage everything seamlessly.” — CFO of PickSmart
Additionally, Kintsugi’s platform offered real-time updates on tax law changes and handled complex requirements, such as managing nexus, tracking use tax liabilities on out-of-state purchases of machinery, and optimizing the manufacturing process, making it an invaluable tool for manufacturers by providing clear definitions of tax terms and regulations. Kintsugi’s automation also helped them manage wholesale and resale tax exemptions more efficiently, ensuring that they could focus more on their core business. By integrating seamlessly into PickSmart’s tech stack, Kintsugi provided a flexible solution that allowed the company to scale its operations without worrying about compliance issues.
How Kintsugi Helps Businesses Avoid Penalties and Achieve Compliance
- Error Reduction: Since integrating Kintsugi, PickSmart has seen a significant decrease in errors related to sales and use tax filings. The automation of complex tax calculations has eliminated the manual errors that previously caused compliance risks, providing peace of mind as they grow.
- Time Savings: Kintsugi’s platform has drastically reduced the time spent managing tax compliance. What used to take hours of manual work is now completed automatically, freeing up valuable resources for strategic initiatives and product development.
“Kintsugi not only eliminated compliance risks but also gave us the confidence to focus on growth without worrying about tax mismanagement. We’ve saved thousands in potential penalties thanks to their automation.” — PickSmart
- Cost Savings: By accurately tracking tax exemptions for manufacturing equipment, replacement parts, and materials, PickSmart has avoided thousands of dollars in potential penalties. The automation also ensures that use tax for out-of-state purchases is managed properly, preventing costly non-compliance fees.
- Global Compliance: Kintsugi’s real-time updates and comprehensive compliance tools ensure PickSmart stays aligned with regional tax laws as they expand globally. This capability allows PickSmart to confidently enter new markets while maintaining full compliance across multiple jurisdictions.
Kintsugi Powers PickSmart’s Global Future
As PickSmart continues to expand their international reach, Kintsugi’s automated platform remains a critical component of their tax compliance strategy. The ability to handle complex sales tax exemptions and use tax requirements has allowed PickSmart to confidently explore new markets while reducing the administrative burden of managing taxes manually, alongside the necessary equipment. Kintsugi’s automation has not only minimized errors but has guaranteed that they stay ahead of changing tax regulations, which is crucial for their continued growth.
Looking ahead, Kintsugi will continue to support PickSmart as the company scales globally, enabling them to maintain compliance without sacrificing agility. By automating processes such as managing exemptions for manufacturing equipment, tracking nexus, and handling deductions, Kintsugi gives them the freedom to focus on innovation and product development. With Kintsugi’s reliable system in place, they can pursue growth opportunities without concerns over tax-related challenges, ensuring a smooth and successful expansion.
About Kintsugi
Based in San Francisco and founded in 2022, Kintsugi is dedicated to taking the stress out of sales tax compliance. Our platform automates the entire process, delivering high performance, reliability, and flexibility as your business scales.
Kintsugi is secure, encrypted, GDPR-compliant, and SOC 2 Type II certified, adhering to the highest standards for security, availability, processing integrity, confidentiality, and privacy.
Learn more about Kintsugi’s platform and integrations here.
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