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Combine Forces with Taxnexus Cannabis Tax Solution

By Vernon Keenan, CEO of Taxnexus

In the wonderful world of American cannabis commerce, we are all beholden to the new cannabis laws and regulations enacted by the states. The opportunity to make money comes with a heavy and unpredictable tax burden. Cannabis tax compliance requires accurate and ongoing surveillance of the legislative landscape and specialized tax accounting. Only with those tools in operation can cannabis taxpayers remain financially compliant.  We created Taxnexus to provide cannabis businesses with transactional tax compliance services from transaction to treasury filing.

Tax Compliance as a Service in Commerce

Since the 1960’s, American commerce has relied on specialty tax compliance services to remain compliant.  An example of what Taxnexus does can be seen in the telecom industry by looking at your phone bill. The FCC requires the detailed listing of all taxes and fees on your statement. Every telecom uses a tax service provider like Taxnexus, not a CPA, to manage the complexity of calculating and presenting taxes on phone bills to consumers, and filing returns with various jurisdictions.

The cannabis industry currently suffers without such a service, resulting in regulatory noncompliance by businesses and governmental tax collection failure. With new and evolving cannabis tax laws at the state and local levels for each type of license, cannabis businesses are in dire need of a tax compliance solution to streamline their transactional tax compliance. By joining forces with cannabis technology commerce software providers, together we can enable the success of the industry at this crucial time.

Gain an Advantage with Taxnexus API

Our value proposition to you is to partner with Taxnexus to offer your customers accurate tax data through your software. With Taxnexus, making sure your clients are tax compliant can be as easy as making an API call.

  • Tax Regimen Database — With a given address, we will identify all the taxes that apply to that geographic location. Taxnexus surveils all state and local sales & cannabis taxes.
  • Financial Accounting and Reporting — Taxnexus keeps a general ledger for each taxpayer to accurately report all tax liabilities.
  • Tax Return Production and Filing — On an annual, quarterly or monthly basis, Taxnexus automatically generates tax returns and files them on behalf of the cannabis taxpayer. Every taxpayer gets a personalized calendar of filing deadlines.

How To Partner with Taxnexus

We have a range of partnership options, and can craft custom agreements to meet specific needs. Here are examples of partnerships we are currently pursuing:

  • Metrc Integration Only — Through our affiliate referral program, even without a direct API integration, we can solve your customers’ tax problems. In Oregon and Colorado, Taxnexus ingests data directly from Metrc.
  • Taxnexus API Rates Only — Allows you to fill out a tax table or internalize your tax algorithms with Taxnexus Rate data.
  • Invoice Tax Calculations — Taxnexus processes every in-store or delivery sale and handles the tax calculation and reporting algorithms.
  • California Distributor Support — Taxnexus services California distributors via daily ingest of invoices and purchase orders. This is required to complete the California Quarterly Cannabis Distributor tax return.

For revenue sharing, we have established partner categories that match these levels of engagement.

Get started by joining the Taxnexus Developer Program that will support your engineering team in evaluating Taxnexus and building Taxnexus integrations. We have an annual program fee of $200 to be a member in the Taxnexus Developer Program.

Choose Your Integration Method

There are two ways to get Taxnexus integrated into existing applications. The first way is to study Taxneux API (https://docs.taxnexus.net) and use one of our SDKs to write the integration directly into your application. We currently have SDKs ready for PHP, Go and Node, and you can generate your own SDK using the Taxnexus Open API specification, which is available at https://docs.taxnexus.net/taxnexus-swagger.yaml.

If your software platform already has an API that exposes your financial data to authorized partner applications, then we have more options. Taxnexus may then write a “plugin” or “cartridge” application that uses both of our APIs at once. This creates a functional gateway between Taxnexus and your application.

Build an AppStore with Taxnexus

Having one’s own API is common strategy for tech companies that operate in the cloud. These companies further differentiate their offerings by using that API to build an AppStore for their partners to sell add-on software and services.

Take a look at Xero and Shopify. Both of those firms have partner galleries and AppStores where their customers find specialized solutions to business problems. The Salesforce AppExchange is considered to be the first and most successful example of a business AppStore.

Cannabis technology businesses who are thinking about building their own AppStore should consider Taxnexus as their anchor tenant. In fact, as anchor tenants in Xero, Salesforce and Shopify AppStores, tax service providers in other specialty tax industries such as Avalara and TaxJar have increased business for those vendors.

Don’t Conquer Taxes On Your Own — Join Taxnexus Instead!

There are less than 50 tax compliance service providers in the United States servicing millions of businesses. All of the businesses who pay for those services have realized an essential truth — it is better for an entire industry to solve its tax problems by pooling resources through service providers like Taxnexus rather than to go it alone.

By being among the first cannabis technology commerce software businesses to adopt Taxnexus, you will gain a competitive advantage by including the Taxnexus brand and features in your sales and marketing materials.

Make tax compliance a key value proposition in your software by making the call to Taxnexus for a demo and business development conference today.

— Vernon Keenan, vern@taxnexus.net, cell: 415-420-2965, office: 510-679-1900

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Taxnexus Does Cannabis Tax Compliance, M&A and More

By Vernon Keenan, CEO of Taxnexus, Inc.

Dear Financial Service Professional:

I’d like to introduce you to Taxnexus, the Cannabis Tax Compliance Company.

Taxnexus is a technology startup dedicated to leading the cannabis industry in tax determination. We make our online business processes and cannabis database available to taxpayers and financial services providers with Taxnexus Cloud.

Very much like our more traditional competitors, Avalara and TaxJar, who service specialty tax needs for other industries, Taxnexus has taken on the burden of accurately surveying and analyzing the cannabis industry tax landscape on behalf of our customers. By pooling cannabis industry resources through Taxnexus, we enable our customers to perform better compliance and accounting of their transactional taxes than they can do on their own.

Dependent upon jurisdictional standards, Taxnexus has developed multiple processes to access the transactional data in order to provide our customers with accurate and timely tax calculation, storage, and filing of cannabis transactional tax returns, as well as sales-and-use taxes. Whether through the customer’s Point of Sale (POS) system, or through Metrc, Taxnexus can interface to perform these tax compliance services. These services are available to your customers through affiliations and partnerships with Taxnexus.

Cloud Services

Taxnexus Cloud works with live data. We currently cover all of the western states, excluding Colorado, offering the following subscription services:

  • Taxnexus API – A programming interface to Taxnexus Cloud used by OEM partners and taxpayers.
  • Taxnexus Forms – A form-generator for specialized cannabis tax returns and reports, just like TurboTax or Lacert.
  • Taxnexus Situs – Thousands of federal, state, county and local Tax Types that contain the exact regimens associated with transactional, business and service taxes accessible by geographic coordinates.
  • Taxnexus Financial Accounting – A customizable, rule-based, double-entry bookkeeping system that posts journal items to each taxpayer’s individual chart of accounts.

Taxnexus Situs

Taxnexus Situs is a proprietary database of all cannabis tax rules and regulations, in addition to sales and use taxes, for all levels of government and all types of businesses along the product chain. Not only does it consist of tax rates, the Situs includes necessary tax regimens for business compliance, such as required method of filing, filing frequency and taxing authorities.

Financial professionals, such as CPAs, use the Situs address look-up capability to automatically determine taxes applicable for their clients. Taxnexus Situs is a premium source of cannabis tax data that aids financial professionals, technology software companies, and cannabis entrepreneurs and operators.

Financial Accounting

Taxnexus uses an audit-quality financial accounting system to organize taxpayer data. The Taxnexus General Ledger (GL) has the following advanced features:

  • Taxnexus Codes
    • Cannabis merchandise and wholesale trade product coding system
    • Fewer than 20 codes needed
  • Cannabis-specific Chart of Accounts (CoA) template
    • Fully Customizable
    • CoA’s managed on per-license basis
    • Branch Rollups
  • Monthly Accounting Calendar
    • Period close function
    • Account Balance and Archive Functions
  • Rule-Based GL Posting
    • Taxnexus uses the “Accounting Equation” to create a balanced ledger.
    • The Taxnexus Codes and Accounting Rules are used to post revenue, expense and tax journal items to the General Ledger.
    • Rule templates may be modified and are extensible.
  • Trial Balances for Tax Reporting
    • When a monthly period is closed, the trial balances for the accrued taxes represents the tax owed.

This General Ledger technology gives Taxnexus the ability to take data from a variety of sources and ingest it into our standards-based financial accounting system. Taxnexus is currently taking data from our cannabis software partners using API and gateway technology. To ingest data from legacy sources, we write custom adapters to other live systems, such as Xero and Quickbooks Online, as well as regular CSV and SQL files.  

Professional Services

In order to help our customers achieve success, Taxnexus provides professional services in the areas of Financial Accounting, Cannabis Policy Analysis and Information Technology. CPA and other professional services firms can partner with Taxnexus to simplify the full spectrum cannabis transaction accounting

  • Financial Accounting
    • Cannabis Revenue Ledger ETL and Reconciliation
    • Ledger Merge
    • Tax Liability Determination
  • Cannabis Policy Analysis Services
    • Taxnexus Situs Access
    • Project Consulting
  • Information Technology Services
    • Solution Architect
    • Project Management
    • Project Consulting

How to Partner with Taxnexus

We have a range of partnership options, and can craft custom agreements to meet specific needs. For revenue sharing, we have established partner categories for CPAs and professional services providers.

Business Model

Taxnexus is focused on the cannabis taxpayer, of whom there are many in tax trouble or are seeking tax solutions. We aim to fill the gap with product-oriented solutions for those taxpayers as quickly as possible.

We seek to have cannabis entrepreneurs, established operators, and multi-state operators use Taxnexus for compliance services. We engage with those customers to monitor ongoing transactions by charging a monthly subscription fee plus additional per-form fees.

Taxnexus anticipates gaining most of our customers using a B2B2C distribution strategy. We have partnerships with cannabis POS and ERP vendors who use Taxnexus to determine their customers’ transactional sales and cannabis taxes. We refer to partners who embed Taxnexus API into their products and sell our services to their customers as OEM partners.

Taxnexus isn’t just about SaaS subscriptions. The Taxnexus founders are expert IT solution and professional service providers. Besides our software offerings, Taxnexus provides high-level financial accounting, IT and cannabis policy analysis services to help OEM partners and taxpayer customers achieve success with Taxnexus Cloud.

Call To Action

All this research and technology automates the arduous process of calculating complicated and evolving cannabis and sales & use taxes, and can be partnered in as a value add to your customers. Contact us today to inquire further about partnering with us to assist your customers with transactional tax compliance.

Taxnexus, Inc.
2625 Alcatraz Ave. Suite 295
Berkeley, CA 94705

Phone: 510-679-1900
Email: Info@Taxnexus.net
Web: www.Taxnexus.net