Post launch, we streamlined Later’s tax collection process, ensured compliance across various jurisdictions, and reduced the company’s financial strain.
Impact 1
Impact 2
Impact 3
SaaS companies like Later were initially only required to collect sales tax in states where they had a physical presence, but after the 2018 Wayfair ruling in the US, collection was based on transaction thresholds across states, complicating compliance.
To support expansion into the North American and European markets as part of the product roadmap initiatives, I collaborated with tax consultants during the discovery phase to ensure compliance with various B2B tax regulations.
As part of our discovery work, I conducted an internal audit on areas that could impact the experience of applying sales tax.
Tax obligations usually maximize in tax reporting periods, less so when acquiring subscriptions*
*Finding: 15/20 customers agreed that tax burdens often peak during filing season, not so much during the subscription purchase journey
✨ Opportunity
Can't accurately calculate tax with the data we have
The current address validation in-app posed usability issues during form entry and fails to enforce valid entry during purchase completion.
This results in inaccurate addresses being stored in the backend, complicating tax compliance and increasing the risk of undercharging or overcharging customers.
Tax Consultant
PwC
UX Researcher
Payments Team, Later
Lead Front-end developer
Payments Team, Later
Back-end developer
Payments Team, Later
Above: Visualizing the hierarchy helped our product trio understand the logic and design/development effort for each level.
Above: I mapped out the logic for sales tax collection to identify edge case scenarios.
We then divided the work into manageable phases, keeping in mind of flexibility for sprint planning.
I created detailed UX flows to give the team a clear overview of the broader process before advancing with design or implementation. After reviewing the flows, I designed initial mockups to pinpoint opportunities for reusing existing components and ensuring consistency with the design system.
Promising Progress with Next Steps Ahead
Our team moved towards a percentage rollout in order to minimize a potential user disruption and to identify improvement areas based on real-world data post launch. Within the six months post-launch, we collected over $1M in sales tax revenue that would have otherwise been an operational cost.
The new experience has reduced the average error occurrence rate to less than 1%. We believe the error still perists due to users entering addresses from countries with less standardized address formats. This insight will guide the team in upcoming iterations of Later's sales tax initiative.
Learnings:
Legal and regulatory compliance should be understood early on
Proactively check in with cross-functional team members to address challenges and clarify requirements
Next Steps:
Consider localization of addresses in countries with less standardized address formats
Examine the expansion of the sales tax ecosystem to additional markets (e.g., Oceania, Asia)
Evaluate sales tax exemption options for Canadian customers
