Terminal49 is a container-tracking and automated risk management platform built for the global shipping and logistics industry. It aggregates live data from ocean carriers, rail carriers, and vessels/AIS to provide freight forwarders, cargo owners, and logistics services with a trusted single source of information on container milestones.
The real-time container tracking and exception management that Terminal49 offers allow companies to monitor shipments across multiple carriers, automate manual data entry, reduce costs & fees, and proactively address delays.
Terminal49’s customer base has grown exponentially since it began operations many years ago, and the company has tracked more than five million containers in that time.
Its customer base includes companies from all over the world importing into North America, which is great for business, but presents a big challenge when it comes to one crucial issue: sales tax compliance.
Terminal49 faces complex challenges when it comes to sales tax
Sales tax compliance can be a challenge for any growing technology company, but Terminal49's business model is particularly complex for a couple of reasons:
- Terminal49 does business with companies in multiple U.S. states and foreign countries.
- Terminal49's key product is software as a service (SaaS).
Terminal49 must track whether it has established economic nexus in every jurisdiction where it has customers. Establishing economic nexus, whether by reaching a certain number of sales or a certain amount in sales revenue, triggers the obligation to follow local sales tax rules. This includes registering with relevant taxing authorities, collecting tax on taxable items, and remitting tax on a set schedule based on the jurisdiction's policies.
SaaS companies and sales tax
Since SaaS customers subscribe to software online instead of owning it, existing tax laws often don’t account for this model. As a result, state and local authorities frequently struggle to define SaaS within their tax framework.
In some places, it's considered a service; in others, it's deemed a product. This classification can affect when and how SaaS is taxed, and that's not the only factor that has an impact, as some states make a distinction between SaaS that's purchased for business and SaaS purchased for personal use.
The rules governing how SaaS is taxed vary widely from place to place, sometimes even within a single state. Illinois, for example, is a home rule state. While SaaS is not taxable on the state level under Illinois sales tax rules, some jurisdictions within the state do tax some SaaS purchases, including Chicago under PPLTT.
Terminal49 has the responsibility of understanding all of these different rules about the taxability of SaaS products, from Idaho to Italy to Indonesia, and the stakes are high: failure to follow the rules can lead to fines and other penalties.
Unfortunately, the company initially found a solution that failed to meet compliance requirements.
Sales tax is a thorny issue for startups
Failing to manage sales tax compliance is common among startups.
Many young companies don't realize the scope of their sales tax obligations, especially as the framework for taxability across borders is relatively new.
Before the 2018 Supreme Court case South Dakota v. Wayfair, states could require a company to charge sales and use tax only if it had physical nexus, or a sufficient physical presence, in the state. Wayfair changed the game by allowing states to impose sales tax obligations on remote sellers, based on economic nexus.
For startups, navigating economic nexus can be challenging because they're often growing and expanding into new markets rapidly, but they also often can’t afford to maintain an in-house accounting department to manage sales tax compliance.
Many startups also sell products that don’t fit well into existing taxability classifications. As previously mentioned, SaaS is a relatively new model, and not only for U.S. states but also countries around the world have struggled with where SaaS fits into existing sales tax frameworks.
This is the situation Terminal49 found itself in, so it looked for help. However, finding the right kind of help took some trial and error.
Terminal49's prior sales tax solution wasn't working
When Kimmie Nguyen, Terminal49’s Chief Operating Officer, began addressing the company's sales tax compliance issues, the team had already made the decision to work with a company called Avalara.
"Avalara is the gorilla vendor in the room," Nguyen said. Unfortunately, she wasn't happy with the choice. "If I had known, I would have said no. I have worked with Avalara at past companies, and have not had a great experience."
Terminal49's experience was no better, and Nguyen said that there was a long list of problems with Avalara's service and with the support it provided, including wasted funds, a slow implementation process, poor communication, and even big mistakes.
Pre-purchasing filings worked out poorly
The problems with Avalara started with an initial calculation, which resulted in a suggestion to pre-purchase a significant number of filings. So Terminal49 did just that, but, as Nguyen explained, "that number was not reachable given implementation and registration timelines."
Unfortunately, just a handful of those filings were used by their expiration date, and when Terminal49 asked if they could be rolled over, Avalara said no, according to company policy. Nguyen believes that the Avalara sales team should have known that completing that many registrations would be unrealistic and that selling them to Terminal49 would waste company funds.
Poor integration and project management
Once nexus is reached, sales tax compliance obligations start immediately. However, Avalara did not handle the process efficiently for Terminal49.
"The integration process took months and was very cumbersome. We were told it was going to be straightforward, and it wasn't," Nguyen said.
Even after implementation, Terminal49 remained dissatisfied. Avalara’s platform was cumbersome with non-intuitive and clunky UI, and the account team repeatedly failed to deliver.
"My team had to follow up with Avalara to get clarity on projects and next steps," Nguyen commented. "It's been a disorganized experience working with Avalara."
She added that she often found herself project managing Avalara’s team, an extra burden the already busy COO did not need.
Avalara's mistakes could have cost Terminal49 quite a lot
While these problems were undoubtedly annoying, there were bigger issues that ultimately convinced Terminal49 that it had to make a switch. Avalara was making serious mistakes.
"There were errors with filings with some states," Nguyen said. "We caught these mistakes, not the Avalara team."
Avalara also told Terminal49 that the company needed to register for sales tax in California, despite the fact that SaaS is generally treated as a nontaxable service there. "I felt as though the Avalara team was pushing for something that was not needed," Nguyen explained.
Mistakes in registration can trigger audits and penalties. Registering in a state without nexus wastes fees and creates unnecessary filing obligations. As a result, Terminal49 lost time and money, while Avalara exposed the company to regulatory risk.
Terminal49 searched for a better solution
Terminal49 needed to make a change, and this time, Nguyen knew exactly what she was looking for.
“Avalara is an old company with an outdated tech stack,” Nguyen said. “Their clunky, slow, and unintuitive user experience reflects that. I wanted a modern partner rethinking these problems, where customer service wasn’t an afterthought.”
As a startup, efficiency and cost-effectiveness were critical for Terminal49. Nguyen explained that in-house compliance or hiring a CPA felt too heavy-handed. “As technology enthusiasts, we also love supporting a startup that’s reimagining these challenges.”
Fortunately, such an option existed. Founder Akshay Dodeja, a Y Combinator alum, discovered Numeral, also backed by Y Combinator and Benchmark. Its white-glove approach to sales tax compliance was exactly what Terminal49 needed.
Numeral solved compliance headaches overnight
After the frustrations with Avalara’s clunky onboarding and costly mistakes, working with Numeral was a complete turnaround.
Nguyen noted that the difference was clear even before Terminal49 officially signed on. The Numeral team offered valuable guidance upfront, showing they were invested in customer success from day one.
“Peter Nyznyk was fantastic on our initial calls,” Nguyen said. “He gave us advice—without any obligation—on what to do and what to avoid. It made us feel confident that Numeral would stand behind its product.”
Impressed by Numeral’s customer service, Terminal49 quickly placed its trust in the company, and the experience only improved from there. Onboarding was effortless: “We gave Numeral our Stripe API key and their team handled the rest,” Nguyen said.
Beyond its seamless integrations with sales platforms, billing software, and HR systems, Numeral stood out for its “nice and simple” UX, a refreshing change from Avalara, which gave Terminal49 a clear view of its sales tax obligations at a glance.
Numeral also:
- Identified past mistakes Avalara had made, for example, it found that Terminal49 had registered unnecessarily in California, and worked to fix the issue.
- Began tracking nexus correctly for every state and country where Terminal49 does business, ensuring that the proper rules were being followed.
- Registered Terminal49 in jurisdictions where nexus has been reached.
- Started collecting sales tax for Terminal49 when required, and managing exemptions in appropriate situations.
- Provided filing notifications so the Terminal49 team is fully aware of filing status.
- Remitted sales tax in required jurisdictions on the appropriate schedule.
- Offers timely and responsive customer support and service.
- Guarantees its work. Sales tax is filed on time, or Numeral pays any penalties and interest charges.
With Numeral, sales tax is no longer a concern for Nguyen. “We trust Numeral to resolve issues quickly. It’s given me back hours each week and boosted my confidence by 100 percent,” she said.
Now Terminal49 can stay focused on tracking shipments, reducing risk, and helping customers keep their cargo moving, while Numeral handles sales tax. For companies struggling with Avalara’s outdated software or compliance in general, the advice is simple: make the switch.
“Switching has never been easier. You’ll kick yourself for not doing it sooner.”
