Taxnexus Does Cannabis Tax Compliance, M&A and More

By Vernon Keenan, CEO of Taxnexus, Inc.

Dear Financial Service Professional:

I’d like to introduce you to Taxnexus, the Cannabis Tax Compliance Company.

Taxnexus is a technology startup dedicated to leading the cannabis industry in tax determination. We make our online business processes and cannabis database available to taxpayers and financial services providers with Taxnexus Cloud.

Very much like our more traditional competitors, Avalara and TaxJar, who service specialty tax needs for other industries, Taxnexus has taken on the burden of accurately surveying and analyzing the cannabis industry tax landscape on behalf of our customers. By pooling cannabis industry resources through Taxnexus, we enable our customers to perform better compliance and accounting of their transactional taxes than they can do on their own.

Dependent upon jurisdictional standards, Taxnexus has developed multiple processes to access the transactional data in order to provide our customers with accurate and timely tax calculation, storage, and filing of cannabis transactional tax returns, as well as sales-and-use taxes. Whether through the customer’s Point of Sale (POS) system, or through Metrc, Taxnexus can interface to perform these tax compliance services. These services are available to your customers through affiliations and partnerships with Taxnexus.

Cloud Services

Taxnexus Cloud works with live data. We currently cover all of the western states, excluding Colorado, offering the following subscription services:

  • Taxnexus API – A programming interface to Taxnexus Cloud used by OEM partners and taxpayers.
  • Taxnexus Forms – A form-generator for specialized cannabis tax returns and reports, just like TurboTax or Lacert.
  • Taxnexus Situs – Thousands of federal, state, county and local Tax Types that contain the exact regimens associated with transactional, business and service taxes accessible by geographic coordinates.
  • Taxnexus Financial Accounting – A customizable, rule-based, double-entry bookkeeping system that posts journal items to each taxpayer’s individual chart of accounts.

Taxnexus Situs

Taxnexus Situs is a proprietary database of all cannabis tax rules and regulations, in addition to sales and use taxes, for all levels of government and all types of businesses along the product chain. Not only does it consist of tax rates, the Situs includes necessary tax regimens for business compliance, such as required method of filing, filing frequency and taxing authorities.

Financial professionals, such as CPAs, use the Situs address look-up capability to automatically determine taxes applicable for their clients. Taxnexus Situs is a premium source of cannabis tax data that aids financial professionals, technology software companies, and cannabis entrepreneurs and operators.

Financial Accounting

Taxnexus uses an audit-quality financial accounting system to organize taxpayer data. The Taxnexus General Ledger (GL) has the following advanced features:

  • Taxnexus Codes
    • Cannabis merchandise and wholesale trade product coding system
    • Fewer than 20 codes needed
  • Cannabis-specific Chart of Accounts (CoA) template
    • Fully Customizable
    • CoA’s managed on per-license basis
    • Branch Rollups
  • Monthly Accounting Calendar
    • Period close function
    • Account Balance and Archive Functions
  • Rule-Based GL Posting
    • Taxnexus uses the “Accounting Equation” to create a balanced ledger.
    • The Taxnexus Codes and Accounting Rules are used to post revenue, expense and tax journal items to the General Ledger.
    • Rule templates may be modified and are extensible.
  • Trial Balances for Tax Reporting
    • When a monthly period is closed, the trial balances for the accrued taxes represents the tax owed.

This General Ledger technology gives Taxnexus the ability to take data from a variety of sources and ingest it into our standards-based financial accounting system. Taxnexus is currently taking data from our cannabis software partners using API and gateway technology. To ingest data from legacy sources, we write custom adapters to other live systems, such as Xero and Quickbooks Online, as well as regular CSV and SQL files.  

Professional Services

In order to help our customers achieve success, Taxnexus provides professional services in the areas of Financial Accounting, Cannabis Policy Analysis and Information Technology. CPA and other professional services firms can partner with Taxnexus to simplify the full spectrum cannabis transaction accounting

  • Financial Accounting
    • Cannabis Revenue Ledger ETL and Reconciliation
    • Ledger Merge
    • Tax Liability Determination
  • Cannabis Policy Analysis Services
    • Taxnexus Situs Access
    • Project Consulting
  • Information Technology Services
    • Solution Architect
    • Project Management
    • Project Consulting

How to Partner with Taxnexus

We have a range of partnership options, and can craft custom agreements to meet specific needs. For revenue sharing, we have established partner categories for CPAs and professional services providers.

Business Model

Taxnexus is focused on the cannabis taxpayer, of whom there are many in tax trouble or are seeking tax solutions. We aim to fill the gap with product-oriented solutions for those taxpayers as quickly as possible.

We seek to have cannabis entrepreneurs, established operators, and multi-state operators use Taxnexus for compliance services. We engage with those customers to monitor ongoing transactions by charging a monthly subscription fee plus additional per-form fees.

Taxnexus anticipates gaining most of our customers using a B2B2C distribution strategy. We have partnerships with cannabis POS and ERP vendors who use Taxnexus to determine their customers’ transactional sales and cannabis taxes. We refer to partners who embed Taxnexus API into their products and sell our services to their customers as OEM partners.

Taxnexus isn’t just about SaaS subscriptions. The Taxnexus founders are expert IT solution and professional service providers. Besides our software offerings, Taxnexus provides high-level financial accounting, IT and cannabis policy analysis services to help OEM partners and taxpayer customers achieve success with Taxnexus Cloud.

Call To Action

All this research and technology automates the arduous process of calculating complicated and evolving cannabis and sales & use taxes, and can be partnered in as a value add to your customers. Contact us today to inquire further about partnering with us to assist your customers with transactional tax compliance.

Taxnexus, Inc.
2625 Alcatraz Ave. Suite 295
Berkeley, CA 94705

Phone: 510-679-1900

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