Artificial intelligence is reshaping how businesses handle sales tax compliance. But there's a critical difference between AI that replaces human judgment and AI that amplifies it.

At Kintsugi, we've built something different: AI that automates the workflow while keeping humans in the loop for every critical decision. It’s not a matter of humans simply catching mistakes that AI makes. Instead, we apply AI where it does its best work, and use human experts where human judgment is key. 

It’s both a choice that aligns with our ethics, and something that  saved one of our customers when a state audit threatened to derail their entire operation.

The AI That Actually Works

The promise of AI in sales tax is tempting: plug in your data, let the algorithms run, and compliance happens automatically. The reality is a bit different, because tax calculations are not actually the best use of probabilistic AI models. 

Large language models (LLMs) are powerful tools, but they're designed to predict likely outcomes based on patterns found in training data. Sales tax compliance doesn't work on "likely." It works on precise, auditable, legally defensible rules that change constantly across 50 states and 100+ countries.

This is why we built something fundamentally different: Kintsugi Intelligence.

How Kintsugi Actually Uses AI

Kintsugi Intelligence is a suite of AI-powered capabilities that blends rule-based precision with machine learning insights. The key distinction is that we don’t use AI or LLMs to perform your actual tax calculations. 

Instead, we apply AI across the entire sales tax workflow to automate and simplify compliance:

Where AI drives automation:

• Nexus monitoring across jurisdictions

• Product classification and categorization

• Transaction data reconciliation

• Exposure analysis and risk scoring

• Workflow optimization and task routing

• Pattern detection for audit triggers

Where humans remain in control:

• Tax rate determination

• Filing accuracy validation

• State relationship management

• Audit response strategy

• Critical compliance decisions

All critical outputs are reviewed and approved by humans to ensure accuracy and reliability. The result is compliance that's predictable, transparent, and auditable: exactly what businesses and their accountants need.

When Human-in-the-Loop Really Matters: The Plufl Story

Plufl is a direct-to-consumer brand that exploded from a dorm room project to $400,000 in Kickstarter sales in 30 days in 2022. That kind of rapid growth is exciting…until you realize it exposes you to complex multi-state tax obligations overnight.

Initially, Plufl struggled with incomplete tools that didn't fully remit taxes or file on time. The tools worked on a technical level, but there was no one to catch the errors that mattered.

After running into multiple issues and not receiving prompt support, Plufl make the switch to Kintsugi. But issues from their pas provider came back to haunt them. Plufl received a call from the Florida Department of Revenue. There were technical and filing errors from a past year with their previous provider that had triggered a fraudulent activity alert.

This is the moment when "set it and forget it" automation fails. This is where the difference between AI running solo and AI with humans in the loop becomes crystal clear. Within hours, the issue was addressed by the human team behind Kintsugi, instead of a series of chatbots stuck in a loop. The combination of automated systems that caught the discrepancy and human experts who knew how to navigate state relationships meant Plufl could quickly resolve what could have been a business-threatening situation.

With Kintsugi, not only are their sales tax processes automated and transparent, but they have the fast-acting support necessary to keep up with their growth–and keep them from firefighting compliance issues. 

“If we didn’t have Kintsugi, we would have owed late fees, and even penalties,” said Yuki Kinoshita, Cofounder of Plufl. 

Kintsugi’s Approach is Different

The broader AI discussion in business often frames it as a binary choice: automate everything, or get left behind. But in sales tax compliance, where errors can cost hundreds of thousands of dollars and jeopardize exits, that's a false choice. AI doesn't replace tax expertise; it amplifies it. Here's what that looks like in practice:

AI handles the high-volume, repetitive work:

• Monitoring nexus thresholds across 50 states and 100+ countries in real time

• Categorizing thousands of products according to complex taxability rules

• Reconciling transaction data from multiple sales channels

• Detecting patterns that might trigger audits

Humans handle the high-stakes, judgment-based work:

• Interpreting state-specific regulations that change frequently

• Managing relationships with state tax authorities

• Making strategic decisions about voluntary disclosure agreements

• Responding to audits with context and expertise

• Fast-acting customer support if an error or issue does arise

The Future Is Human and AI, Not Human vs. AI

In sales tax compliance, what's unique isn't the calculations—those are rules-based. What's unique is the ability to navigate complex state relationships, interpret ambiguous regulations, respond strategically to audits, and ultimately protect your business when things go wrong.

Sales tax compliance is becoming a key differentiator in the crowded ecommerce and SaaS landscape. At Kintsugi, we believe in applying AI where it truly makes a difference: eliminating operational overhead that bogs down teams, improving exposure monitoring, automating repetitive workflows, and surfacing insights that humans might miss. But we keep humans in control of the decisions that determine whether your business stays compliant or faces six-figure liabilities.

Ready to see how human-in-the-loop AI can transform your sales tax compliance? Learn more about Kintsugi Intelligence and how we're building the future of automated, auditable, human-verified tax compliance.