Service guarantees

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Overview

Commenda provides two service guarantees for indirect tax services: the Accuracy Guarantee and the On-Time Filing Guarantee. These guarantees protect customers from financial exposure due to Commenda errors, subject to specific conditions and caps. Both guarantees are capped at the Rolling ACV — the fees the customer paid to Commenda for Services during the twelve (12) months preceding the tax period at issue.

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Accuracy guarantee

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What’s covered

If the customer properly configures and uses the Services and Commenda’s tax calculation, rate, or taxability determination is inaccurate such that the return is filed incorrectly and a tax authority assesses uncollected sales tax, penalties, or interest (collectively, “Tax Shortfall”), Commenda will reimburse or credit the customer for the Tax Shortfall.

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Coverage cap

Reimbursement is capped at the Rolling ACV — the fees the customer paid to Commenda during the twelve (12) months preceding the tax period at issue.

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Process

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Step 1: Customer receives assessment notice

Customer receives a notice from a tax authority assessing uncollected sales tax, penalties, or interest due to an inaccuracy in Commenda’s tax calculation, rate, or taxability determination.

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Step 2: Customer notifies Commenda (within 14 days)

Customer must notify Commenda in writing within fourteen (14) days after receiving the first notice of assessment. Required information:

• Copy of the assessment notice
• Tax period(s) affected
• Jurisdiction(s) involved
• Amount assessed (tax, penalties, interest)
• Description of the transactions at issue

Notification channel:

• Email: [support contact]
• Subject line: “Accuracy Guarantee Claim - [Company Name]”
• All required documentation attached

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Step 3: Customer cooperation with investigation

Customer must provide all relevant information and reasonably cooperate with Commenda’s investigation and any effort to contest or mitigate the assessment. This includes:

• Transaction data and records
• Configuration settings used
• Communication with tax authority
• Supporting documentation requested by Commenda
• Participation in calls or meetings as needed
• Authorization for Commenda to communicate with tax authority (if needed)

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Step 4: Commenda investigation

Commenda will:

• Review the assessment and underlying transactions
• Verify whether the error was due to Commenda’s calculation, rate, or taxability determination
• Determine if all guarantee conditions are met
• Assess whether the assessment can be contested or mitigated
• Calculate the covered amount (up to Rolling ACV cap)

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Step 5: Resolution

If the guarantee applies, Commenda will:

• Reimburse the customer for the covered Tax Shortfall, or
• Apply a credit to the customer’s account for the covered amount

Timeline: Commenda will make a determination and provide reimbursement or credit within a reasonable timeframe after completing the investigation.

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What’s NOT covered

The Accuracy Guarantee does not apply to errors caused by:

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1. Customer’s incorrect or incomplete data or configurations

Examples:

• Wrong addresses provided
• Incorrect product taxability mappings
• Missing or invalid exemption certificates
• Incorrect nexus settings
• Wrong customer classifications
• Incomplete transaction data

Rationale: Commenda’s calculations are only as accurate as the data provided. Incorrect information or misconfigured systems shift responsibility to the customer.

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2. Legal positions or classifications selected by customer

Examples:

• Customer chooses to treat a product as non-taxable when it’s actually taxable
• Customer selects a specific tax treatment based on their legal interpretation
• Customer decides not to collect tax in a jurisdiction where they have nexus
• Customer applies an exemption based on their legal position

Rationale: When customers make legal or classification decisions, they own the outcome. Commenda provides tools and guidance, but ultimate responsibility for legal positions rests with the customer.

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3. Changes in law after the transaction date

Examples:

• Tax rate increases after transaction but before filing
• New taxability rules enacted retroactively
• Jurisdiction changes sourcing rules
• New exemption requirements imposed

Rationale: Commenda maintains current tax content but cannot predict or be responsible for retroactive legal changes.

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4. Events outside Commenda’s reasonable control

Examples:

• Third-party service failures (geocoding, address validation)
• Force majeure events
• Customer’s system failures affecting data transmission
• Tax authority system errors
• Jurisdiction provides incorrect guidance

Rationale: Commenda cannot guarantee against events beyond reasonable control.

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Sole and exclusive remedy

The remedies in the Accuracy Guarantee are the customer’s sole and exclusive remedies for inaccuracies in tax calculations or content. This means:

• Customer cannot seek additional damages beyond the Rolling ACV cap
• Customer cannot pursue other legal remedies for covered inaccuracies
• The guarantee represents the full extent of Commenda’s liability for calculation errors

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On-time filing guarantee

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What’s covered

If the customer has met all their obligations and Commenda fails to file a sales tax return by its statutory due date solely due to Commenda’s error, Commenda will:

1. Complete and submit the delinquent filing at no additional charge
2. Waive or refund any service fee for that return
3. Reimburse any late-filing penalties and interest imposed by the tax authority, up to the Rolling ACV cap

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Coverage cap

Reimbursement of penalties and interest is capped at the Rolling ACV — the fees the customer paid to Commenda during the twelve (12) months preceding the tax period at issue.

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Process

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Step 1: Missed deadline discovered

Customer discovers that a return was not filed by its statutory due date, or receives a penalty notice from a tax authority for late filing.

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Step 2: Customer notifies Commenda (within 10 days)

Customer must notify Commenda within ten (10) days of discovering the missed deadline or receiving a penalty notice to qualify for the guarantee. Required information:

• Jurisdiction and tax type
• Filing period
• Statutory due date
• Date customer discovered the issue or received penalty notice
• Copy of penalty notice (if applicable)

Notification channel:

• Email: [support contact]
• Subject line: “On-Time Filing Guarantee Claim - [Company Name]”
• All required documentation attached

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Step 3: Commenda investigation

Commenda will:

• Verify the statutory due date
• Review the filing timeline and any communications
• Determine if the late filing was solely due to Commenda’s error
• Verify that the customer met all their obligations
• Assess whether any exclusions apply

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Step 4: Resolution

If the guarantee applies, Commenda will:

1. Immediately file the delinquent return (if not already filed)
2. Waive or refund the service fee for that return
3. Reimburse the late-filing penalties and interest (up to Rolling ACV cap)

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Customer obligations

To qualify for the On-Time Filing Guarantee, the customer must have met all obligations:

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Timely data provision

• Provide complete and accurate transaction data by agreed-upon deadlines
• Respond to data quality issues or questions promptly
• Ensure data feeds or integrations are functioning properly

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Sufficient funds

• Maintain sufficient funds in account for tax remittance
• Provide remittance authorization in advance of due dates
• Respond to remittance issues promptly

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Required tax accounts

• Maintain active tax registration accounts in all required jurisdictions
• Provide Commenda with current login credentials or filing authorization
• Notify Commenda of any account status changes

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Timely approvals

• Review and approve returns by agreed-upon deadlines
• Respond to questions or issues that require customer input
• Provide necessary documentation when requested

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Accurate configuration

• Maintain accurate nexus settings
• Keep product taxability mappings current
• Update exemption certificates as needed

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What’s NOT covered

The On-Time Filing Guarantee does not apply to late filings caused by:

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1. Customer’s delayed or inaccurate data

Examples:

• Transaction data provided after the deadline
• Incomplete or incorrect transaction data requiring correction
• Data quality issues that delay processing
• Integration failures on customer’s side

Rationale: Commenda cannot file returns without complete, accurate data. Late data provision shifts responsibility to the customer.

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2. Insufficient funds

Examples:

• Insufficient balance for tax remittance
• Remittance authorization not provided
• Remittance method declined or failed
• Customer delays remittance approval

Rationale: Returns cannot be filed without remittance. Ensuring sufficient funds is the customer’s responsibility.

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3. Failure to maintain required tax accounts

Examples:

• Tax registration account suspended or closed
• Login credentials expired or invalid
• Filing authorization revoked or expired
• Account locked due to prior issues

Rationale: Commenda cannot file to accounts that are not active and accessible.

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4. Events outside Commenda’s reasonable control

Examples:

• Tax authority system outages on filing deadline
• Force majeure events
• Third-party service failures
• Jurisdiction changes filing requirements without notice

Rationale: Commenda cannot guarantee against events beyond reasonable control.

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5. Customer delays in approvals or responses

Examples:

• Return approval delayed past internal deadline
• Questions or issues not addressed timely
• Required documentation not provided
• Customer unavailable during critical filing window

Rationale: Filing deadlines require timely customer participation. Delays on the customer’s end shift responsibility to them.

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Guarantee comparison

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Maximizing guarantee protection

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For accuracy guarantee

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1. Complete, accurate data

• Verify addresses are correct and complete
• Ensure product taxability mappings are accurate
• Keep exemption certificates current
• Maintain accurate nexus settings

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2. Proper configuration

• Follow Commenda’s configuration guidance
• Test configurations before going live
• Review configuration regularly
• Update settings when business changes

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3. Documentation

• Keep records of all transactions
• Save configuration settings and changes
• Document legal positions and decisions
• Maintain audit trail

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4. Prompt notification

• Monitor for assessment notices
• Notify Commenda within 14 days
• Provide complete documentation
• Respond to information requests quickly

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5. Full cooperation

• Participate in investigation
• Provide requested information
• Authorize Commenda to communicate with tax authority
• Work collaboratively on mitigation

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For on-time filing guarantee

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1. Meet all deadlines

• Provide data by agreed-upon deadlines
• Approve returns promptly
• Respond to questions quickly
• Don’t delay critical decisions

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2. Maintain account health

• Keep sufficient funds available
• Maintain active tax accounts
• Keep credentials current
• Monitor account status

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3. Data quality

• Validate data before submission
• Address data quality issues promptly
• Test integrations regularly
• Monitor data feeds

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4. Proactive communication

• Notify Commenda of business changes
• Report issues immediately
• Respond to communications promptly
• Keep contact information current

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5. Plan ahead

• Build buffer time before deadlines
• Don’t wait until last minute for approvals
• Address issues early
• Maintain backup remittance methods

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Common guarantee scenarios

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Scenario 1: Inaccurate rate applied

Situation: Commenda applied a 7% rate when the correct rate was 8%. The tax authority assesses:

• $5,000 in uncollected tax
• $500 in penalties and interest

Guarantee applies? Yes, if:

• Customer provided correct address and transaction data
• Customer properly configured the system
• Customer notified within 14 days
• Customer cooperated with investigation

Covered amount: $5,500 (tax + penalties + interest), up to Rolling ACV cap

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Scenario 2: Wrong product taxability

Situation: Customer classified a product as non-taxable based on their legal interpretation. Tax authority disagrees and assesses $10,000. Guarantee applies? No — this is a legal position selected by customer (exclusion #2) Responsibility: Customer owns the outcome of legal classification decisions

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Scenario 3: Late filing due to customer data delay

Situation: Customer provided transaction data 3 days late. Commenda filed the return 2 days after the due date. Tax authority assesses $200 in late-filing penalties. Guarantee applies? No — late filing was caused by customer’s delayed data (exclusion #1) Responsibility: Customer is responsible for penalties due to their data delay

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Scenario 4: Late filing due to Commenda error

Situation: Customer provided all data on time and approved the return 5 days before the due date. Commenda failed to submit the return due to an internal processing error. Tax authority assesses $300 in penalties. Guarantee applies? Yes, if:

• Customer met all obligations (timely data, approval, sufficient funds)
• Customer notified within 10 days
• Late filing was solely due to Commenda’s error

Covered amount: $300 in penalties + fee waiver for that return, up to Rolling ACV cap

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Scenario 5: Incorrect address provided

Situation: Customer provided a billing address instead of shipping address. Commenda calculated tax for the wrong jurisdiction. Tax authority assesses $3,000 in uncollected tax. Guarantee applies? No — this is customer’s incorrect data (exclusion #1) Responsibility: Customer is responsible for providing correct addresses

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Scenario 6: Retroactive law change

Situation: A jurisdiction retroactively changed a product’s taxability. Commenda’s calculation was correct at the time of transaction but is now deemed incorrect. Tax authority assesses $8,000. Guarantee applies? No — this is a change in law after the transaction date (exclusion #3) Responsibility: Retroactive law changes are not covered by the guarantee

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FAQ

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What is “Rolling ACV”?

Rolling ACV is the total fees the customer paid to Commenda for the Services during the twelve (12) months preceding the tax period at issue. This is the cap for both guarantees. Example: If the tax period at issue is Q2 2024, Rolling ACV is the fees paid from Q2 2023 through Q1 2024.

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Can the customer get more than Rolling ACV in coverage?

No. Both guarantees are capped at Rolling ACV. This is the maximum recovery under either guarantee.

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What if the customer disagrees with Commenda’s determination?

If the customer believes the guarantee should apply but Commenda determines it doesn’t:

1. Provide a detailed explanation of the determination
2. Request any additional information that supports their position
3. Escalate to executive team if needed
4. Review the service agreement for dispute resolution procedures

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Do the guarantees cover state income tax or other taxes?

No. These guarantees specifically cover sales tax (indirect tax) services only. They do not cover income tax, payroll tax, or other tax types.

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What if multiple issues occur in the same period?

Each issue is evaluated separately. However, the total recovery across all issues is still capped at Rolling ACV for that period.

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How long does the investigation take?

Investigation timelines vary based on complexity. Commenda will:

• Acknowledge the claim within 2 business days
• Provide initial assessment within 10 business days
• Complete investigation within 30 days (for most cases)
• Communicate timeline if more time is needed

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What if the tax authority is wrong?

If Commenda believes the tax authority’s assessment is incorrect:

• Work with the customer to contest the assessment
• Provide supporting documentation and analysis
• Participate in appeals or protests (as appropriate)
• Help minimize or eliminate the assessment

If the assessment is successfully reduced or eliminated, the guarantee covers only the final assessed amount.

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Can the customer purchase additional coverage?

The guarantees are included with the service agreement and cannot be increased beyond Rolling ACV. Options to consider:

• Maintaining their own tax liability insurance
• Increasing Rolling ACV by using more Commenda services
• Working with their insurance broker on additional coverage

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What happens if Commenda goes out of business?

The guarantees are only valid while Commenda is operating. Customers should consider:

• Maintaining their own documentation and records
• Having backup tax service providers identified
• Maintaining tax liability insurance
• Keeping sufficient reserves for potential tax liabilities

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Best practices for guarantee claims

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Do’s

• Notify promptly — Don’t wait until the deadline
• Provide complete documentation — Include everything requested
• Cooperate fully — Respond quickly to information requests
• Document everything — Keep records of all communications
• Be professional — Work collaboratively with Commenda
• Follow up — Check on status if there’s no response

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Don’ts

• Don’t delay notification — Missing the deadline disqualifies the claim
• Don’t withhold information — Full disclosure is required
• Don’t ignore requests — Lack of cooperation can disqualify the claim
• Don’t make assumptions — Ask questions if unsure
• Don’t escalate prematurely — Give the process time to work
• Don’t agree to settlements — Consult with Commenda before agreeing to anything with tax authority

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Related documentation

• Incident Response SOP — How Commenda handles tax incidents
• Scenario classification — Types of tax issues and remedies
• Communication templates — Templates for customer communications