It can be difficult to manage sales tax.
With stacks of paperwork, hefty amounts of calculations, and lots of challenging obstacles, it’s no wonder why sales tax compliance is one of the most difficult business processes. You may be surprised to learn that there is an easier way around it. TaxJar is a cloud-based, state-of the-art automated sales tax platform.
TaxJar makes it easy to simplify the complex world of sales tax, giving your business an edge. In this review, we’ll take you through all the things you need to know about this service. We’ll also share with you the pros and cons, and our final thoughts about whether or not TaxJar is worth adding to your business management ecosystem. Let’s go!
For those of you who prefer a more visual experience, here is a video review from Marcus Stonelius’ YouTube channel. Do check out our article below, however, because it has a comprehensive overview of TaxJar.
What Does TaxJar Do? California Taxjar
TaxJar was established in 2013 to serve online sellers and business entities. Its goal is to simplify the complex process of sales tax compliance. The United States has over 11,000 tax jurisdictions, each of which has different rules depending on the district or state. Businesses had to adhere to sales tax regulations back then. Rates were determined by where transactions were made, inventory stock locations, and the number of employees they employed.
Although it may seem simple from a superficial level, the process is actually quite complex. Businesses were tasked with handling varying degrees of tax burdens, and these may vary based on varying factors. Things got even more complicated when in 2018, the US Supreme Court ruled that businesses must pay sales tax based on where the consumer purchased any product. Business owners were forced to learn and remember tax codes after tax codes, adding more complexity.
That’s quite a task. Well, TaxJar takes most of the complications in sales tax compliances and turns them into simple, less daunting tasks. This allows you to prioritize the most important aspects of your business without having to worry about tax computations.
What Are Its Pros and Cons?
To help you weigh in on your decision, we’ve provided you with a list of pros and cons of using TaxJar as a business tool. California Taxjar
- TaxJar has been designed to be simple, quick, and automated. It will keep you in compliance for more than 11,000 tax jurisdictions across the U.S.
- The AutoFile tool will take care of all the details for you.
- TaxJar allows you to save time and allow you to concentrate on your business.
- It is easy to use, and you don’t have to be an accountant or tax expert to understand it!
- Aside from its less tedious nature, TaxJar also provides businesses with amazing customer support and plenty of helpful resources to guide you through when it comes to sales tax compliance!
- Although TaxJar is known to be generally convenient, it may be a bit complicated on the first try, especially for the uninitiated merchant.
- The interface can also sometimes be inconvenient, as some users have reported cases of having more than five browser tabs open just to file one state’s tax return.
- Pricing for lower-tier plans may vary depending on factors like additional AutoFile fees if credits are exhausted. We’ll be discussing pricing soon.
How Much Does TaxJar Cost?
TaxJar offers three pricing plans: Starter, Professional, and Premium. Let’s take a deeper look at these subscription tiers.
Starting at $19/month, the Starter plan provides essential sales tax services for small businesses. The plan usually handles 200 total returns and purchase orders per month. However, the price could change if there is more. This tier provides free tools that will help you greatly with sales tax compliance such as sales tax reporting, AI driven product taxability recommendations and basic CSV imports.
Customers also get data integrations and up to four free AutoFiles per annum. In addition, Starter allows support for multiple business accounts, as well as e-mail support.
More challenges are likely to come if your company has more experience and a wider reach. That’s where the Professional plan comes in. You get all the features of the Starter Tier, plus upgrades such as full API access and advanced CSV imports.
Professional also includes increased data import and API integration limits from 3 to 10, 10,000 advanced API calls per minute, up to 10 team management users, and 12 free AutoFiles per year. If you use TaxJar Professional and manage to rake up to over 1,000 orders, you’re entitled to phone customer support on top of e-mail support. Like Starter, the price of this tier may change if you gain more than 200 allotted orders.
TaxJar Premium includes all the features that you need to ensure sales tax compliance. Premium includes all the Starter and Professional features for enterprises and experienced businesses, as well as unlimited API and data integrations to many e-commerce services and unlimited AutoFiles. There is also unlimited team usage.
It also includes increased API calls per minute at 25,000, as well as white-glove support in the form of a dedicated account management team. Unlike the two previous plans, Premium does not have a definite price range. Instead, it’s fully customizable according to your business’s needs, and can be negotiable through TaxJar’s customer service.
Try it Free of Charge
If you’re interested in TaxJar, you may want to check out its free 30-day trial. You can get full access to all the Professional plan features and tools, including API access and integrations, data imports, and team and user management. You don’t need to pay upfront to access this trial! California Taxjar
The Features of TaxJar
Automatic Sales Tax Calculations
TaxJar comes with fully optimized functions and services built to ease the tax burden. Its calculation process is one of them. TaxJar instantly calculates sales tax! It will instantly calculate the sales tax for you, and it will always match the correct rates with the customer’s address.
With TaxJar, you won’t need to take long to calculate taxes one-by-one nor go through the added hassle of keeping up with the changes. The platform’s team tracks all changes related to sales tax rates and laws, and integrates them into the platform regularly.
TaxJar provides more than just top-notch calculations. It also offers automated reports that include sales tax data from linked accounts, CSV imports and individual state sales tax reports. All of this data is automatically combined into reports for different states with breakdowns according to their tax jurisdictions.
TaxJar makes it easier and more accessible to organize reports. Everything is centralized, which allows for faster collaborations with your finance department. The dashboard allows you to see detailed analysis based upon your activity. TaxJar automatically collects data so you’re always up to date.
AutoFile makes this platform stand out among the rest. It is an electronic sales tax filing platform that collects user information from ecommerce providers and then files it into an automated sales tax report and payment to be submitted in any state.
What’s great about AutoFile is that you’re guaranteed to never miss a deadline! There’s no need to even go through the stress of paperwork or extra hands, as it’s designed to be easily manageable. Plus, it saves you time in the long run!
However, while it looks astoundingly impressive, it’s worth mentioning that it can be quite like a limited luxury to lower-tier subscribers. For starter plan subscribers, you can only get 4 AutoFile enrollments free of charge per year.
Sales Tax Nexus Insights
If you use TaxJar in selling your items online, it’s important to know a thing about economic nexus. This topic has been covered briefly before. However, to sum up, rather than paying sales tax in your home state, customers will be required to pay sales tax in the states where they purchased your products. California Taxjar
Determining the nexus can be confusing. TaxJar offers easy-to-understand insights that will help you stay on track. The economic nexus dashboard doesn’t just let you check activity between states but also lets you know if you’ve reached the required nexus threshold for each state. It comes in very handy, especially if your business continues to grow and reach more states.
Integrations with Online Business Services
TaxJar can be seamlessly integrated with many online business services. You can connect your account to internet marketplaces like Amazon, Etsy, and eBay to determine sales tax. You can also integrate with e-commerce platforms like Shopify, BigCommerce, and similar services where you may sell your listings, payment gateways like Stripe and PayPal, and operation management systems such as Oracle NetSuite, Intuit QuickBooks, and more.
Other partner services that are integrative with TaxJar include Square, Xero, Walmart, Salesforce, Magento, and WooCommerce among others. If you can’t find your preferred online business solution in the list, you can always build your own with the TaxJar API, or by importing all data from third-party services through CSV.
Is TaxJar the Perfect Fit for Your Business?
TaxJar has proven to be very reliable and high-tech, easing most of the challenges business owners face in their day-to-day lives when it comes to managing sales tax. It is a popular choice because it is easy to use, it saves time, and it can help your business in many other ways.
While it’s highly acclaimed – and rightly so – we can’t fully say it’s perfect in all aspects. Some users had issues with customization while others experienced problems with TaxJar’s integration to Shopify and other apps. There were also issues with interface misunderstandings and automated calculation. These issues could be addressed.
All other issues aside, TaxJar would be the perfect fit for any business. We highly recommend you try this out as part of your business strategy!
Most Frequently Asked Questions California Taxjar
Which types of businesses use TaxJar?
TaxJar can be used by small and medium businesses, large-scale enterprises, and even freelancers. As of 2022, TaxJar has served over 20,000 businesses, including some of the well-known ones, like Coca-Cola, Land Rover, Microsoft, Shein, and many others.
Does TaxJar work in other countries outside the U.S?
TaxJar features are currently limited to the United States. They have not yet been extended to other countries outside US jurisdiction. Only the TaxJar API tool is supported in a few non-US territories. Businesses in Canada, Australia, the UK, and countries included in European Union can use TaxJar API.
Can I cancel my TaxJar account? If so, how?
If you are unhappy with TaxJar’s service, you can cancel it by going to your account settings. Once you head over to Plans & Billings, you can click the red link that leads you to cancel your current subscription.
You will lose access to TaxJar’s reporting tools and AutoFile. You can reactivate or cancel your subscription at any time if you want to gain access to these services.
What are the alternatives to TaxJar?
TaxJar isn’t the only solution for sales tax compliance. There are other alternatives out there, with some offering more features and compatibility with more territories, and others with cheaper price ranges. We suggest you check out the following as alternatives to TaxJar:
- Sovos Taxify