SaaS · 🇺🇸 United States
Unregistered in 11 states, three weeks before diligence
A Series A SaaS company discovered mid-diligence that economic nexus had been crossed in eleven states with no registrations filed.
US SaaS, Series A, 4,200 transactions/month. Client identity withheld — we publish names only with written permission, so this engagement is described by its shape rather than by who it was.
11
States registered retroactively
3 weeks
To diligence-ready
$0
Deal value lost to the finding
The situation
- The company had grown self-serve revenue quickly across the US and treated sales tax as a single national obligation. Their existing bookkeeper filed in the home state only.
- Diligence for a Series B surfaced the gap. The acquirer's accountants asked for nexus analysis by state and there was none.
What we found
- Economic nexus thresholds crossed in eleven states, the earliest nineteen months prior.
- Native tax tables in QuickBooks were applying a single blended rate rather than jurisdiction-level rates.
- No exemption certificates on file for the resale customers that had claimed exemption verbally.
What we did
- Ran a state-by-state nexus study from raw transaction data, dating each threshold crossing.
- Registered in all eleven states and filed outstanding returns, using voluntary disclosure where the lookback justified it.
- Connected automated rate determination so the ledger and the returns reconcile without manual adjustment.
- Built an exemption certificate process into the sales workflow.
The outcome
- Exposure was quantified, disclosed and remediated before the acquirer's own analysis landed, which changed the conversation from a discovered problem to a managed one.
- The round closed without a holdback attributable to sales tax.
What we'd flag
The historic liability still had to be paid. Voluntary disclosure reduced penalties but not the underlying tax — starting nineteen months earlier would have been materially cheaper.
Answers
Unregistered in 11 states, three weeks before diligence
Start with a conversation
Recognise any of this in your own books?
Thirty minutes. We review where your books stand and where the money's actually going — no obligation.