The Story of Avocado is a cautionary tale. It’s a parable for some of the tax complexities created by the simple addition of 1 new SKU. How are you managing the data and systems needed to be compliant? If avocados are this complicated, what else should you be thinking about? Visit our website to learn more about how Sovos Compliance can help you today. Sovos Compliance designs technology solutions to help businesses meet the demands of their unique tax compliance and reporting obligations. Our trusted industry expertise and global research capability enables over 3,000 clients to operate with the confidence to efficiently navigate today’s dynamic regulatory environment. Sovos Compliance utilizes a unique ability to turn knowledge into highly functional, scalable software that seamlessly integrates with a wide-array of applications and information technologies used by retailers today. Ultimately, we give clients peace of mind by simplifying tax compliance, providing greater control and visibility and mitigating compliance risk.

1. sovos.com
The Story of
Avocado
Or
How I determined the right
tax and
didn’t end up in the pits

2. sovos.com
You want your business to grow…

3. sovos.com
You want your business to grow…
...and that can mean changes

4. sovos.com
You want your business to grow…
...and that can mean changes
• New products
• New locations
• New methods of selling

5. sovos.com
You want your business to grow…
...and that can mean changes
• New products
• New locations
• New methods of selling
More opportunities for error

6. sovos.com
The Story of Avocado is a cautionary tale
It’s a parable for some of
the tax complexities
created by the simple
addition of 1 new SKU.
sovos.com

7. sovos.com
The Story of Avocado is a cautionary tale
It’s a parable for some of
the tax complexities
created by the simple
addition of 1 new SKU.
sovos.com
How are you managing
the data and systems
needed to be compliant?

8. sovos.com
The Story of Avocado is a cautionary tale
sovos.com
If avocados are this
complicated,
what else should you be
thinking about?

9. sovos.com
Hass will provide some
special avocado insights as
we progress
Hass

10. sovos.com
It starts with the tree… Avocado trees, like other fruit trees,
are taxed differently depending on
the state and local regulations.

11. sovos.com
It starts with the tree… Avocado trees, like other fruit trees,
are taxed differently depending on
the state and local regulations.
For example:
In California, avocado trees
are Tax Exempt.

12. sovos.com
It starts with the tree… Avocado trees, like other fruit trees,
are taxed differently depending on
the state and local regulations.
For example:
In Texas, they are
completely taxable.

13. sovos.com
It starts with the tree… Avocado trees, like other fruit trees,
are taxed differently depending on
the state and local regulations.
For example:
In South
Carolina, they
are taxable at
some local levels
but not at the
state level.

14. sovos.com
Then the whole fruit The whole fruit is completely exempt in
approximately 70% of the states that
have a sales tax, it is either fully taxable
or taxed at a reduced rate in the
remaining states.

15. sovos.com
Then the whole fruit The whole fruit is completely exempt in
approximately 70% of the states that
have a sales tax, it is either fully taxable
or taxed at a reduced rate in the
remaining states. For example:
In Florida, avocados
are Tax Exempt.

16. sovos.com
Then the whole fruit The whole fruit is completely exempt in
approximately 70% of the states that
have a sales tax, it is either fully taxable
or taxed at a reduced rate in the
remaining states. For example:
In Kansas,
they’re taxable.

17. sovos.com
Then the whole fruit The whole fruit is completely exempt in
approximately 70% of the states that
have a sales tax, it is either fully taxable
or taxed at a reduced rate in the
remaining states. For example:
In Virginia and
Missouri, they’re
taxable at a reduced
state-level rate

18. sovos.com
Did you know…
That I’m a fruit?
I am, botanically-speaking, a
large berry with a single seed.

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What about
guacamole made and
served fresh?

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What about
guacamole made and
served fresh?
Guacamole, when served in a
restaurant and whether served
alone,

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What about
guacamole made and
served fresh?
Guacamole, when served in a
restaurant and whether served
alone, or with tortilla chips,

22. sovos.com
What about
guacamole made and
served fresh?
Guacamole, when served in a
restaurant and whether served
alone, or with tortilla chips, or
inside a burrito

23. sovos.com
What about
guacamole made and
served fresh?
Guacamole, when served in a
restaurant and whether served
alone, or with tortilla chips, or
inside a burrito or sushi,

24. sovos.com
What about
guacamole made and
served fresh?
Guacamole, when served in a
restaurant and whether served
alone, or with tortilla chips, or
inside a burrito or sushi,
is subject to sales tax in most states
along with an additional meals tax
in several others, like Virginia.

25. sovos.com
What about
guacamole made and
served fresh?
Guacamole, when served in a
restaurant and whether served
alone, or with tortilla chips, or
inside a burrito or sushi,
is subject to sales tax in most states
along with an additional meals tax
in several others, like Virginia.
It is also is subject to a meals tax in
some jurisdictions that don’t have a
sales tax, such as New Hampshire.

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Did you know…
Hass is the most popular variety of avocado
grown around the world.
The Hass tree was discovered in the backyard
of a mailman named Rudolph Hass in
La Habra Heights, California in the 1930s;
he patented his tree in 1935.
The Hass avocado had to wait about 35 years
before it really became popular in the 1970s.

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Mixed into a Cocktail?

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Mixed into a Cocktail? The Avocado Daiquiri you are
served in a bar or restaurant will
be subject to sales/meals tax in
most states just like guacamole
In several states, such as
Minnesota, an additional liquor tax
will apply to the cocktail.

29. sovos.com
Mixed into a Cocktail? The Avocado Daiquiri you are
served in a bar or restaurant will
be subject to sales/meals tax in
most states just like guacamole
In several states, such as
Minnesota, an
additional liquor tax
will apply to the
cocktail.

30. sovos.com
In hand cream?
Avocado moisturizer is taxable in all states that
have a sales tax as a sale of tangible personal
property

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In hand cream?
Avocado moisturizer is taxable in all states that
have a sales tax as a sale of tangible personal
property
As cooking oil?
Treated as a grocery item, the same as the whole
fruit.

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In hand cream?
Avocado moisturizer is taxable in all states that
have a sales tax as a sale of tangible personal
property
As cooking oil?
Treated as a grocery item, the same as the whole
fruit.
As a dietary supplement?
Supplements are exempt in about 1/3 of the states
that have a sales tax, such as New Jersey, Illinois
and Utah, and taxable in the rest.

33. sovos.com
And where was it
purchased?
Although the rules would be the same
whether purchased online or in a store
nexus would need to be taken into
consideration…

34. sovos.com
And where was it
purchased?
Although the rules would be the same
whether purchased online or in a store
nexus would need to be taken into
consideration…
…But that’s a different issue entirely.

35. sovos.com
All of those questions
from one fruit

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Choose Taxware from Sovos Compliance to
manage this complexity
Superior Tax Content
– 210 million tax rules
managed
– 200 international localities
supplying tax research
– 5,000+ product codes
– 20,000 tax rate updates
annually
– 13,000+ jurisdictions
– 281 rates & rules

37. sovos.com
Choose Taxware from Sovos Compliance to
manage this complexity
Superior Tax Content
– 210 million tax rules
managed
– 200 international localities
supplying tax research
– 5,000+ product codes
– 20,000 tax rate updates
annually
– 13,000+ jurisdictions
– 281 rates & rules
Technology built for retailers
– Product-and service-based
taxability
– Invoice-level processing
– Rounding and bracketing
– Thresholds and limitations
– Delivery charges
– Sales tax holidays
– Exemptions

38. sovos.com
Learn more at sovos.com/retail-transaction-tax-solutions
All images courtesy of Veer (www.veer.com).