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.
What’s a Rich Text element?
The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.
Static and dynamic content editing
A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!
How to customize formatting for each rich text
Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.
They claim their open API loads the fastest in the tax calculation / compliance space (average: 28ms).
Largely TaxJar is replacing an entire mess of spreadsheets, VLOOKUPS, and Google searching the laws of various regions (and honestly you’re very likely to get something wrong). With TaxJar, you’ve got, instantly, the right tax compliance, reporting, and submitting of remittances. Most importantly, you’re collecting the right taxes from your customers, which means you don’t get stuck with that bill. And second most importantly is that you get the submissions done for you automatically (assuming you don’t want to do your own internal audit). Thus saving you 5 hours per state that you file with.
Oftentimes TaxJar will be working with an accounting firm or agency to help get a merchant setup, but you as the merchant can absolutely install and onboard TaxJar yourself.
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.