A managing partner at a tax-focused CPA practice forwarded us this question last month. A prospective client had inventory sitting in third-party logistics warehouses across multiple states, no nexus filings in any of them, and a current CPA who told them, in plain terms, that multi-state physical nexus work was not what the firm did.
The prospective client wasn't unusual. The current CPA wasn't wrong either. Generalist accounting firms don't carry the SALT depth, the state-by-state exposure modeling, or the voluntary disclosure agreement template bank that this kind of engagement needs. Saying no was the right call.
What is unusual is how badly the tooling fails the firms that DO handle this work.
The workflow that actually runs a multi-state nexus engagement
Pick a composite example, drawn from patterns we have seen across recent conversations with SALT-focused accounting firms. A specialty tax practice takes on a typical nexus exposure engagement. The client uses a national 3PL with warehouses sitting in several states. The engagement steps look like this:
- Identify physical nexus by state, tying 3PL inventory presence to each state's economic and physical thresholds.
- Quantify back-tax exposure by state. Sales and use tax. Income tax. Gross receipts tax where applicable.
- Decide register-prospectively versus VDA versus do-nothing for each state.
- For VDA states, draft and submit anonymous disclosure proposals to each state department of revenue.
- Track the multi-month back-and-forth with each DOR through proposal, agreement, registration, return filing, and lookback payment.
- Reconcile the lookback-period filings against the disclosure agreement terms.
- Set up ongoing compliance for the now-registered states.
Each line of that workflow lives in a different place at most firms. Exposure modeling sits in a spreadsheet. VDA templates live in a shared drive folder, last updated by whoever ran the most recent engagement. DOR correspondence routes through individual partner inboxes. Registration and ongoing filing handoffs go to whatever generic compliance tool the firm uses for in-state clients.
That is not a process. That is a tax practice that depends on the senior person remembering where everything lives.
What the tooling sprawl actually costs the firm
Per-engagement, the cost shows up in predictable places. Partner-level review hours get spent reconstructing what the senior associate did across separate spreadsheets per state. VDA-negotiation cycles slip because state DOR responses sit in someone's email rather than the engagement record, and follow-ups get dropped. The realization rate takes the hit, because SALT engagements get priced on what the partner expects the work to take, while the actual hours run higher because of the tool-jumping tax.
The firms we talk to that handle this work well are not winning on tooling. They are winning despite the tooling, on senior expertise alone. Which means the partner cannot scale the practice without hiring more partners.
The system that replaces the sprawl
Merkra builds custom internal systems. For a SALT practice running multi-state nexus and VDA work, the system looks like one application with the engagement as the center of gravity. Client entity at the top. State-by-state exposure matrix as the working canvas. VDA template bank wired to per-state requirements. DOR correspondence routed and logged against the engagement record. Lookback-period filing handoffs tracked through to completion. Renewal and ongoing-compliance calendar feeding off the same data.
One login. One source of truth on which state is at which stage of which disclosure. The partner reviews the exposure analysis, not spreadsheet formatting. The senior associate runs the engagement out of one screen instead of jumping between browser tabs and a shared drive.
Build first. Pay second. Own everything. The firm pays a one-time fee for a system shaped to its actual workflow, gets the source code, and stops paying per-seat fees on the cluster of generic practice-management and CRM tools currently held together by a Zapier zap and senior-associate memory.
What we would not build
For a CPA practice running only an occasional nexus engagement, this system is overkill. The right answer there is a clean spreadsheet template, a shared drive folder organized by client and state, and a referral relationship with a SALT specialist firm for the heavy work. We would say no, send the template, and not sign a contract.
For a firm where multi-state SALT is a real service line, where the partner is the bottleneck and realization is bleeding from tool-jumping, the math tips. That is the engagement we are built for.