Case Study
Turning Compliance Chaos into Cost Savings
Company L
A dynamic consumer products company based in the Pacific Northwest, selling both wholesale to retailers and directly to consumers (D2C).
The Challenge
Company L relied on Avalara to automate its sales tax compliance and a local CPA firm for broader tax guidance. On the surface, everything appeared to be running smoothly—returns were being filed, reports were generated, and the system was operational.
But automation alone couldn’t interpret the gray areas.
Incorrect advice regarding economic nexus in more than 20 states went unnoticed for years. As a result, Company L failed to collect sales tax from its D2C customers in jurisdictions where it had a collection obligation. With no practical way to retroactively recover tax from customers, what should have been a pass-through expense became a significant corporate liability.
When new leadership began reviewing the company’s exposure, they realized the risk was not just operational — it was financial and strategic.
The Solution
Miles Consulting Group partnered with Company L’s existing tax technology, using it as the operational engine while applying strategic analysis behind the scenes.
Our team conducted a comprehensive nexus and taxability review, identifying more than $1 million in potential exposure, plus substantial interest and penalties.
Rather than replacing their software, we focused on making sure it was configured and supported correctly:
- Designed a multi-state Voluntary Disclosure Agreement (VDA) strategy
- Shortened lookback periods across jurisdictions
- Negotiated penalty abatements
- Structured retroactive registrations and filings
- Corrected underlying configuration and compliance processes to prevent recurrence
By combining automation with experienced judgment and state-level negotiation, we transformed a growing liability into a structured, manageable remediation plan.
The Outcome
Our intervention reduced Company L’s total exposure by more than $600,000, eliminating significant penalties and interest while restoring compliance across multiple states.
Just as importantly, Company L now operates with:
Correctly aligned tax technology
Clear nexus visibility
A defensible compliance framework
Confidence in its tax posture
We continue to support their ongoing compliance, ensuring their software works as intended — and their growth isn’t undermined by hidden exposure.
