StateWise merchant terms and liability posture
1. The risk this document exists for
It is not "a merchant sues us because they owed tax". It is narrower and more likely:
> "StateWise told me I had nexus in Georgia. I registered. I did not owe. Now I have permanent > monthly filing obligations in a state where I sell $4,000 a year."
And its mirror:
> "StateWise showed Georgia green. I did not register. Georgia assessed me three years of back tax."
Both are reliance claims and both are foreseeable, because the product's entire purpose is to be relied on. A disclaimer alone does not answer them. The design does, and that is why the posture below is architectural before it is contractual.
2. The five structural defenses
Each one is a design decision already recorded elsewhere. Together they are the actual answer.
| Defense | Where it lives |
|---|---|
| We never state a conclusion the merchant cannot check. Every number expands to its orders, window and rule | SCREENS.md 2 |
| We never hide an ambiguity. Both numbers always; disputed states name the disagreement and both readings | CLAUDE.md hard rule 2, PRODUCT_BRIEF.md 6 |
We never claim currency we do not have. Every rule carries its source and lastVerifiedAt, and says so on screen when stale | NEXUS_RULES.md 9 |
| We never take an action with legal consequence. No filing, no registration, no remittance | OUT_OF_SCOPE.md |
| We never present an unproven number as a real one. A failed protected-data probe blocks the app rather than rendering zeros | CLAUDE.md hard rule 1 |
The fifth is the one a lawyer would miss and the one that matters most. An app that renders zeros because it could not read the data is indistinguishable, to the merchant, from an app reporting no exposure. Blocking loudly instead is what converts a silent false negative into a visible error.
3. What we say we do, and what we say we do not
We do: read order date, ship-to state, order total, channel and test flag; measure them against each jurisdiction's published economic-nexus rule as we have recorded it; show the arithmetic, the source and the date we last checked it.
We do not: provide tax, legal or accounting advice; determine whether a merchant is required to register anywhere; guarantee that our rule table is current or correct; account for product taxability, exemptions, resale certificates, home-rule localities, trailing nexus, or physical nexus we have not been told about; file, remit or register anything.
The merchant's own records and their tax professional govern. We are an input to that decision.
4. Disclaimer text
Every screen that renders a verdict carries, at minimum:
> StateWise is a monitoring tool, not tax advice. State rules change and our data may be out of date. > Confirm with the state's Department of Revenue or your tax professional before acting.
The CPA export carries the long form on page one:
> This report was generated by StateWise on {date} from the merchant's Shopify orders and the > marketplace order files they imported. It measures those sales against each jurisdiction's economic > nexus rule as recorded by StateWise, with the source and last-verified date shown for every rule. > > It does not account for product taxability, exemption or resale certificates, home-rule local > jurisdictions, trailing nexus, or any physical presence not entered by the merchant. Amounts marked > "estimated" are estimates. This report is not tax advice and is not a substitute for professional > judgment. StateWise does not file, remit or register on any merchant's behalf. > > Orders excluded from these totals: {count}, by reason: {breakdown}.
That last line is not boilerplate. A CPA reading the report needs to know what is not in it, and putting the excluded-order count in the disclaimer block is how it stops being a footnote.
5. The back-liability estimator (v1.1, Pro)
The highest-risk feature in the roadmap: it attaches a dollar figure to a legal exposure. It ships only with all of these:
- Every input labeled
actualorestimated, rendered from thebasisfield. - The full arithmetic shown: taxable sales after the crossing date, times the state's average combined
rate, plus an interest range, plus a penalty range.
- Rate, interest and penalty figures each carrying their own source and date.
- A range, never a single number.
- The VDA note beside it: a voluntary disclosure agreement typically limits lookback and waives
penalties, but usually only if entered before the state makes contact. So the estimate is an upper bound on a path the merchant may not have to take.
- The words "estimate for planning" in the label itself, not only in a footer.
It is never shown on first load and never in listing copy. Leading with a number we cannot substantiate for that specific business is the upsell-funnel behavior this product is positioned against (ONBOARDING.md 5).
6. Data and privacy commitments
- **We never read or store a customer name, email, phone number, street address, ZIP code or
geolocation.** Architecturally, not merely by policy: no query selects them and the scopes do not permit them.
- Level 1 protected customer data only. We do not request the individually-approved protected fields.
- Uploaded CSVs are parsed and discarded. Only normalized order rows persist.
- Analytics rows are pseudonymized at purge and retained indefinitely in that form. **Pseudonymized is
not anonymous** and the privacy policy says so.
- An erasure request is discharged if the store reinstalls and authenticates afterwards.
7. Limitation of liability
Standard for a software product at this price: liability capped at fees paid in the preceding 12 months, no consequential damages, no liability for tax, interest or penalties assessed by any authority.
A cap is not a substitute for section 2, and a merchant who was misled by a confident wrong number will not be comforted by it. The cap protects the business; the design protects the merchant. Both are required, and only one of them is our job to get right in the code.