TaxJar

Did you know that how much you owe in sales tax can change based on what types of products you're selling in what regions, and there are even nuanced changes to tax code from within the same Zip Code? There are hundreds of different category codes by product. 45 states have "Economic Nexus" laws (laws that require paying sales tax if you sell eCommerce to that state).

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TaxJar (recently acquired by Stripe) is on a mission to make sales tax compliance easier for merchants. Solving this sales tax problem across all different states, regions, and countries is a bit of a nightmare, to be honest.

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Their tool is tracking how much revenue you've earned by region (or state) and will notify you as you get close to the revenue threshold that will force you to require registering with that state yourself. They have documentation on how to complete this registration yourself, or you can pay them $299 to get it done for you (having gone through this myself, I recommend paying a professional).

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They can auto-file all of your remittances on your behalf (you can review ahead of time if you want), thus saving you about 5 hours per filing, which pretty much eliminates one headcount needed from your company, which is totally awesome.

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They have an open API that is lightning fast for your customers to magically get the correct tax amount on the checkout page in approx. 28ms (basically instantly).

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They handle calculating the right sales tax at checkout, compiling those reports, and even sending taxes to each entity as appropriate.

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They are even able to calculate and adjust remittance as according to your refunds, showcasing refunded charges on filings (or future filings if the refund happened in a subsequent period).

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If you aren't sure how many states you need to be paying sales tax with, you can install the tool, start a free trial, and at least get a feel from their software on what liabilities you have, before deciding whether or not to use the tool.

Did you know that how much you owe in sales tax can change based on what types of products you're selling in what regions, and there are even nuanced changes to tax code from within the same Zip Code? There are hundreds of different category codes by product. 45 states have "Economic Nexus" laws (laws that require paying sales tax if you sell eCommerce to that state).

​

TaxJar (recently acquired by Stripe) is on a mission to make sales tax compliance easier for merchants. Solving this sales tax problem across all different states, regions, and countries is a bit of a nightmare, to be honest.

​

Their tool is tracking how much revenue you've earned by region (or state) and will notify you as you get close to the revenue threshold that will force you to require registering with that state yourself. They have documentation on how to complete this registration yourself, or you can pay them $299 to get it done for you (having gone through this myself, I recommend paying a professional).

​

They can auto-file all of your remittances on your behalf (you can review ahead of time if you want), thus saving you about 5 hours per filing, which pretty much eliminates one headcount needed from your company, which is totally awesome.

​

They have an open API that is lightning fast for your customers to magically get the correct tax amount on the checkout page in approx. 28ms (basically instantly).

​

They handle calculating the right sales tax at checkout, compiling those reports, and even sending taxes to each entity as appropriate.

​

They are even able to calculate and adjust remittance as according to your refunds, showcasing refunded charges on filings (or future filings if the refund happened in a subsequent period).

​

If you aren't sure how many states you need to be paying sales tax with, you can install the tool, start a free trial, and at least get a feel from their software on what liabilities you have, before deciding whether or not to use the tool.

TaxJar stands out from other eCommerce tools due to its specialized focus on sales tax management. Unlike general eCommerce platforms, TaxJar is dedicated to simplifying the complex world of sales tax compliance. By automating sales tax calculations, reporting, and filing processes, the platform alleviates the burden of manual tax management tasks for businesses.

TaxJar's integration with popular eCommerce platforms and its detailed insights and reporting features cater specifically to sales tax requirements, ensuring accurate calculations and timely filings. This specialized approach distinguishes TaxJar as a comprehensive and efficient solution tailored to businesses looking to streamline their sales tax compliance processes.

TaxJar stands out from other eCommerce tools due to its specialized focus on sales tax management. Unlike general eCommerce platforms, TaxJar is dedicated to simplifying the complex world of sales tax compliance. By automating sales tax calculations, reporting, and filing processes, the platform alleviates the burden of manual tax management tasks for businesses.

TaxJar's integration with popular eCommerce platforms and its detailed insights and reporting features cater specifically to sales tax requirements, ensuring accurate calculations and timely filings. This specialized approach distinguishes TaxJar as a comprehensive and efficient solution tailored to businesses looking to streamline their sales tax compliance processes.

Team members like accountants, finance managers, or tax professionals would typically use TaxJar within a company to handle sales tax calculations, reporting, and filing. It is commonly utilized by those responsible for ensuring tax compliance and accurate financial reporting within the organization.

Setting up TaxJar can range from a small to medium-sized project, depending on the complexity of the business operations and the integration requirements with existing eCommerce platforms. It typically involves linking the company's eCommerce accounts, configuring tax settings, and ensuring proper data synchronization to accurately track, calculate, and report sales tax information.

TaxJar works from startup to enterprise brands. Even from the beginning, if you expect growth of your company, you need to be compliant in various jurisdictions, even within your own city, state, or ZIP.

Shopify has a very basic sales tax functionality which only calculates based on Zip, which can lead to miscalculations. Shopify will not let you modify the properly calculated sales tax on the checkout page unless you are on Plus.

Just because Avalara and Shopify have a pseudo "exclusive" agreement does not necessarily make Avalara better than TaxJar, you need to evaluate this on your own. One key difference is that Avalara has filing costs, so if you're filing in more regions, the flat monthly rate of TaxJar may be a cost savings.