Luminous & Token of Trust Partnership: 3 Reasons Why You Should Care

The vape and alternative products industry has seen a lot of changes in recent years, with new regulations and laws being introduced at both the federal and state levels. One major issue that many vape distributors have had to contend with is the complex and ever-changing tax landscape. However, a new partnership between Luminous and Token of Trust is set to change all that and bring a new level of automation and efficiency to the industry.

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Luminous is a leading software company in the vape space that specializes in inventory management and invoicing. Token of Trust is a compliance software providing a solution for the complex tax and PACT Act compliance needs that come with individual sales at state, county, and city levels. Together, these two companies have partnered to offer a complete solution for automating the process of managing taxes, inventory, and invoicing for vape distributors.

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What is the PACT Act?

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The PACT Act (Prevent All Cigarette Trafficking Act) was originally written for cigarettes and smokeless tobacco. In 2021, it was expanded to cover electronic nicotine delivery systems, which includes vapes, e-liquids, and related products. That means businesses that sell these products across state lines or ship them to customers now have to follow the same rules as tobacco sellers.

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In general, that includes registering with federal and state authorities, filing regular reports on shipments into each state, collecting and paying the correct state and local taxes, and verifying the buyer's age at delivery. Tax rates and rules differ from state to state, and sometimes from city to city, which is why keeping up manually is so difficult.

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So, why should you care about this partnership? Here are three key reasons:

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1. Increased Efficiency and Productivity

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Free up valuable time and resources that can be better spent growing your business. With Luminous and Token of Trust working together, vape distributors will now be able to automate many of the tedious and time-consuming tasks that come with managing taxes, inventory, and invoicing.

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2. Reduced Compliance Risk

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The vape industry is highly regulated, and failure to comply with the PACT Act and other regulations can result in significant fines and penalties. With Luminous and Token of Trust handling the tax side of things, distributors can be confident they're following the rules that apply to each sale, reducing their risk of non-compliance.

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3. Competitive Edge

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If you are a vape distributor, then you understand how time consuming it is to write an invoice and find the correct taxable amount for the customer’s state (as well as reconciling all sales on the back end to avoid ramifications with the IRS). With the ability to automate many of their business processes, distributors that take advantage of this partnership will be able to operate more efficiently and at a lower cost than their competitors. This will give them a competitive edge in the marketplace and allow them to grow their business more quickly.

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Who this partnership is for

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The Luminous and Token of Trust partnership is built for businesses that sell regulated products and need their inventory, invoicing, and tax compliance to work together. That includes:

• Vape and e-liquid distributors selling wholesale to retailers in multiple states.
• Brands and manufacturers that sell both wholesale and direct to consumers.
• Online retailers shipping regulated products to customers across state lines.

If your team is still calculating taxes by hand, copying order data between spreadsheets, or putting together state reports at the end of every month, this partnership is designed to take that work off your plate. Learn more about automated invoicing and wholesale in Luminous.

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Common compliance mistakes to avoid

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Whether or not you automate, these are the areas where distributors most often run into trouble:

• Using one tax rate for every order. Vape taxes can be based on volume, wholesale price, or retail price, and the method changes by state. Each invoice needs the right calculation for where it ships.
• Missing a filing deadline. Reports are due on a regular schedule, and late or missing reports can lead to penalties.
• Keeping records in too many places. When orders, invoices, and shipments live in separate spreadsheets, it's hard to prove what you sold and where.
• Not keeping up with rule changes. States and cities update their rules often, so last year's process may not be compliant today.

Rules vary by location, so always confirm your obligations with a qualified tax or legal advisor.

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Conclusion

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In conclusion, the partnership between Luminous and Token of Trust is a game-changer for the vape industry, bringing a new level of automation and efficiency to the process of managing taxes, inventory, and invoicing. By taking advantage of this partnership, vape distributors will be able to increase efficiency and productivity, reduce compliance risk, and gain a competitive edge in the marketplace.

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If you want to take advantage of this new technology, book a demo with our team.