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- Case Study -

Wayfair Plus Heavy Sales During the Pandemic = Sales Tax Headaches for Wooden Puzzle Manufacturer, Nautilus Puzzles

The Challenge:

Nautilus Puzzles was founded in 2003 as a traditional puzzle manufacturer and switched to manufacturing uniquely cut wooden puzzles in 2018. Based in California, the husband and wife founders had been managing their California sales tax filings easily, but when the South Dakota v. Wayfair Decision happened, their sales tax obligations suddenly had the potential to extend beyond their home state. 

2020 was a great year to be a puzzle manufacturer. As puzzles everywhere quickly sold out during the pandemic, Nautilus Puzzles saw their sales grow across the county. 

"We utilize Shopify as our storefront for online sales, and in 2020, they notified us that we had met economic nexus thresholds in additional states, one of which was Colorado," explained Nautilus Puzzles Partner and VP of Sales and Marketing, Mary O'Brien. "With California, we just do one return for the whole state, so we assumed Colorado would be the same, but that was definitely not the case."

Nautilus Puzzles looked for answers from state websites, a sales tax consultant and Shopify, but no one could give them clear answers on how to manage Colorado. They were already having enough trouble keeping up with demand and production, so as jurisdictional notices continued to stack up, they needed someone who could take sales tax off their plate. 


Why TaxConnex? 

Trustworthy - All Encompassing - Extremely Customer-Service Oriented

Mary talked to two major automated sales tax providers in 2021, but neither could work with Nautilus Puzzles' inventory management tool. She felt at a loss. But in late 2021, she found TaxConnex and started conversations about their white-glove service offerings.

TaxConnex is a service-based outsourcing firm, not an automated technology, so the need to integrate with their inventory management system was not an issue. Nautilus Puzzles liked that TaxConnex's US based team took the time to understand their business and explained how their years of sales tax experience could help them understand their obligations.

“There’s not always a situation in business where technology can solve the problem for you,” explained O’Brien. “There are just too many nuances with sales tax and too many archaic state systems to deal with. I think it would be really hard for an AI solution to take all of those things into account and create something that really works for 90% of customers out there.”

Luckily, that’s not the case with TaxConnex. TaxConnex pairs each of their clients with a dedicated practitioner to learn and manage each business' individual sales tax obligations. They essentially become an outsourced sales tax department and completely remove the burden of sales tax compliance from the client.

“My day is pulled in 20 different directions so [my practitioner] is great at keeping me on track and making sure we get all the data needed for filings,” said O’Brien, “and if a new project pops up, she is quick to respond and make sure we are managing sales tax correctly in each situation. As a small business, that is very important.”


The Results:

TaxConnex was able to do a full nexus review to understand where Nautilus Puzzles had reached nexus thresholds and evaluate the issues they were having in Colorado.


“TaxConnex easily cleared up all our issues with Colorado and we haven’t had a letter [notice] from Colorado since,” exclaimed O’Brien. “If I do receive a notice from Colorado or another state, I don’t have to worry about it, I know [my practitioner] has it handled.”

TaxConnex manages the full filing and remittance process for Nautilus Puzzles. TaxConnex registers the company in any new states as economic thresholds are met, they take their data each month and file returns as well as remit payments, manage jurisdictional notices and provide 2 hours of ad hoc support each month for any special projects or questions that come up. And, as Nautilus Puzzles continues to grow, even outside of the country, TaxConnex is able to help them understand where and when they have sales tax obligations and advise them on how to comply.

“As a small business owner, there are only so many hours in the day and so many things you can do,” explained O’Brien, “so if you can hand off a portion of those tasks to someone who’s an expert and they can just handle it, that’s incredible. That makes [TaxConnex] a really valuable service.”


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About Nautilus Puzzles: 

Nautilus Puzzles started selling Wooden Jigsaw Puzzles in 2018. The puzzles created by Nautilus Puzzles are uniquely cut and creatively designed by a team of artists and jigsaw puzzle enthusiasts in California. The puzzles are cut using the latest laser technology, are fabricated from premium quality wood and ink, guaranteeing a durable heirloom product that is designed to be shared over generations. Learn more at:



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