A Suite for the Sweet: Dylan’s candy bar licks taxation complexities

About the Client: Dylan’s Candy Bar

Founded in 2001 by Dylan Lauren, Dylan’s Candy Bar is a chain of boutique candy shops and candy suppliers currently located in New York City; East Hampton, New York; Los Angeles, Chicago, Honolulu, and Miami Beach, as well as in wholesale venues around the globe and online.

A Tax Solution for Rapid Growth

Dylan’s rapid expansion into new product lines and distribution channels has exponentially increased the complexity of its tax accounting. When and where is an item taxed as food instead of candy? Under what circumstances is a piece of clothing considered a luxury item? The company’s omni-channel strategy introduces even more layers of complexity, more room for potential errors, as the burden for collecting consumer-use taxes isn’t always clear.

As complexity increases, so does exposure, and that has made Dylan’s a target for auditors. The accounting team had been calculating taxes, filing in each state, and managing exemption certificates for hundreds of customers essentially by hand. Auditors found Dylan’s books such fertile ground for back-taxes, penalties, and interest that they came back every year—New York audited the company on an annual basis from 2006 to 2012.

As the business grew, so did the challenge of keeping up. And to make matters even more challenging, their systems didn’t talk to each other—GL, inventory, and POS systems were completely disconnected. With a growing number and different types of SKUs in their inventory, additional states to contend with, and more financial information to track and manage, Dylan’s needed a better way.

“It was really grueling, every time an auditor came in, we’d have two people completely dedicated to that for at least three weeks. Our exposure was so high, we couldn’t afford NOT to prioritize it.”

Lois Browne
VP Finance
Dylan’s Candy Bar

Project Highlight: The Solution – Avalara Sales Tax Suite

Lessons Learned – Tax Automation Results

With AvaTax, Avalara Returns, and CertCapture, Lois and her team no longer spend energy on calculating and collecting taxes, filing across multiple jurisdictions, and complying with exemption requirements. Instead, the team has been liberated to focus on other automation priorities that help Dylan’s pursue its aggressive growth goals.

“Just as importantly, we have shut the door on those annual audits,” says Lois. “We answer with such confidence and authority now; the auditors have moved on to someone else. We are no longer the low-hanging fruit for them.” And that has left Lois and her team with “a sweet, lasting euphoria” of their own.

Alex Olano

CEO & MANAGING PARTNER
TRAJECTORY GROUP