What Breaks First When You Scale? It's Not What You Think 🤔

Thinking about scaling, but not sure if you're actually ready? Let's assess. ✅

Dive into this month’s updates and uncover the clear signals that separate sustainable growth from expensive scaling mistakes. Plus, we’ll also answer a question from you.

Your scaling insights await below. 👇

SALES TAX NEWS

1️⃣ Florida lawmakers approved a roughly $115 billion budget that is now awaiting a signature. One part of the budget will permanently eliminate the sales tax on certain hurricane-related items throughout the year, rather than the standard sales tax holidays currently in place, so residents will no longer have to shop for disaster supplies during a specific time frame.

2️⃣ Iowa has enacted legislation requiring that sales and use tax returns subject to electronic filing requirements must be filed electronically to be considered valid, with an exception allowing taxpayers to request permission from the Iowa Department of Revenue to use an alternative method if they are unable to file electronically.

3️⃣ Effective July 1, 2025, Mississippi is reducing the sales tax rate on groceries from 7% to 5%, where "groceries" refers to food or drink for human consumption that is eligible to be purchased with food stamps, while items not eligible for food stamps will remain taxable at 7%. Affected retailers will need to adjust their systems and use the appropriate rate codes when reporting on their tax returns, starting with the July 2025 return, which is due in August 2025.

4️⃣ Effective October 1, 2025, Washington's newly signed Senate Bill 5814 expands retail sales tax to cover several additional digitally delivered services including digital advertising, IT services, custom website development, and temporary staffing, while also redefining "digital automated services" to include services that primarily involve human effort if delivered digitally.

5️⃣ Effective July 1, 2025, Maryland's Budget Reconciliation and Financing Act of 2025 imposes a 3% sales tax on a broad range of data and information technology services, including system software publishing, computing infrastructure, data processing, web hosting, custom computer programming, and various intellectual property licensing services. Businesses selling these previously non-taxable products should review their product offerings and nexus thresholds to determine if Maryland registration and tax collection are required.

6️⃣ A South Carolina Administrative Law Judge has ruled that Amazon Services, LLC owes uncollected taxes, penalties, and interest on third-party sales made through its platform for pre-Wayfair tax periods, determining that Amazon functions as the retailer in a consignment-type relationship where it handles all selling activities and is present at the point of sale. The ruling, which covered Q1 2016, is likely to be expanded to additional periods and could impact other marketplace facilitators for pre-marketplace facilitator legislation periods.

7️⃣ Pennsylvania has launched a new online portal called the Board of Appeals Online Petition Center, designed for taxpayers filing petitions related to refund requests, assessments, and other Department of Revenue actions. The portal features a tracker system to monitor petition status and an improved interface with enhanced security and accessibility. Pennsylvania taxpayers who need to file appeals, refund requests, or other claims with the Pennsylvania Board of Appeals should begin using this portal immediately.

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IS YOUR E-COMMERCE BUSINESS ACTUALLY READY TO SCALE? 🤔

Want to scale your e-commerce business, but unsure if you're actually prepared? You're not alone. The difference between sustainable growth and expensive operational mistakes often comes down to understanding the fundamentals of when, how, and why to scale.

But what does it really mean to be "scaling-ready"? True scaling readiness isn't just about having profitable ads—it's about having channel-specific profitability plus organic growth signals like increasing search traffic, strong repurchase behavior, and growing word-of-mouth referrals. These indicators suggest genuine product-market fit, not just the ability to buy customers.

As an e-commerce business, premature scaling can quickly transform promising growth into an operational nightmare. You're not just facing increased ad costs, but the hidden complexities of inventory management, customer service scaling, and system optimization that most "scaling gurus" never mention.

The biggest scaling myth? That it's linear and obvious. Successful scaling is actually a series of ups and downs, with market conditions constantly changing. What worked yesterday might not work tomorrow, and the infrastructure that supports a $ 100,000 business won't sustain a $1 million company.

Understanding the real systems behind sustainable scaling is crucial, as scaling too early can create problems that are far more expensive to fix than they were to prevent. Some businesses completely sell out over a weekend due to a single viral post, only to face Amazon penalties for stock-outs and supply chain issues. This is especially important to keep track of with major sales events like Amazon Prime Day right around the corner.

Get the complete blueprint for smart e-commerce scaling from Elliot Roazen, Director of Growth at Platter, here →

Gearing up for Prime Day? Check out our Prime Day Checklist for Multi-Channel Sellers

PARTNER SPOTLIGHT: IRONCLAD CONSULTING SERVICES

Ironclad Consulting Services is a professional services firm that helps startups and growing companies navigate the financial complexities of their businesses. Their team of strategic and hands-on professionals provides full-stack financial leadership and resources to help strengthen companies and effectively manage growth, from financial strategy and processes to cash flow management and operational improvements.

Ready to take your business to the next level? Get in touch or reply to this email for a direct intro to their team.

YOUR QUESTIONS, ANSWERED!

Q (Liz): How far back can I be audited?

A: The statute of limitations for a sales tax audit varies by state, but it’s usually three to six years. This means that most state tax statutes allow for the right to review your records for up to six years. 

In some states, three to six years assumes you’ve been filing your sales tax returns. For example, California can increase the look-back period to eight years if a company has failed to file its sales tax returns. Texas has no limit on how far back they can look.

For this reason, keeping accurate records is vital for expediting the audit process and avoiding potential penalties. Ultimately, you shouldn’t be left guessing. That’s why Zamp offers an Accuracy and Filing Commitment for our customers.

Thanks for reading along.

I’ll be back next month with more sales tax shenanigans.

If you enjoyed this one, please share it with your network. 🤝

If you found it helpful, reply back and let me know. I live for the people.

If you have any feedback, suggestions or questions, please let me know by responding to this email or DM me on Twitter or LinkedIn.

Until next time’s 🗑 …

Rohit & the Zamp team