Sales tax can be a pain to deal with.
Sales tax compliance is one the most complicated business processes. There are a lot of paperwork and calculations involved. You may be surprised to learn that there is an easier way around it. Introducing TaxJar, the cloud-based state-of-the-art automatic 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. To get a comprehensive overview of TaxJar, you may still want to check out our article below.
What Does TaxJar Do? Taxjar Api Docs
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. Companies were given different tax burdens to handle, which can vary depending on various 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?
We’ve compiled a list of pros & cons to help you make a decision about whether TaxJar is right for you. Taxjar Api Docs
- 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.
- With the AutoFile tool, you won’t need to worry much longer about due dates and late submissions of tax returns, etc., as TaxJar takes care of the rest for you – more on that later!
- Using TaxJar for sales tax compliance saves you more time compared to filing everything manually, giving you the chance to focus more 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!
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- TaxJar is generally easy to use, but it can be complicated for merchants who are not familiar with the process.
- 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.
- The pricing of lower-tier plans can vary based on factors such as additional AutoFile fees if you’ve used up the free credits allowed in a plan – more on that as we’ll discuss the pricing shortly.
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. It usually handles up to 200 total purchase and returns orders per month, but the price may change if the volume goes past the number. 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 are also given data integrations with up to three e-commerce services and four free AutoFiles per year included within the tier. 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. TaxJar Professional users who manage to generate over 1,000 orders per year are eligible for phone customer service in addition to e-mail support. If you receive more than 200 orders, the price for this tier could change.
With TaxJar Premium, you get all the features you could ask for when it comes to sales tax compliance and much more. 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.
You also get 25,000 API calls per hour, and white-glove support through a dedicated account management group. Premium is not priced in a fixed range like the other plans. 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
TaxJar is worth a free 30-day trial. All the features and tools of the Professional plan are available to you, including API access, integrations, data imports and team and user management. You don’t need to pay upfront to access this trial! Taxjar Api Docs
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The Features of TaxJar
Automatic Sales Tax Calculations
TaxJar comes with fully optimized functions and services built to ease the tax burden. One of those is its calculation process. TaxJar instantly calculates sales tax! Not only does it always ensure you the right rates in correspondence with your customer’s address and tax jurisdiction, but it also gives you the amounts in real-time.
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. Its team keeps track of all updates related to sales tax laws and rates and incorporates them into the platform periodically.
TaxJar doesn’t just provide you with top-notch calculations, but also automated reports on all the sales tax data collected by the platform from linked accounts, CSV imports, and even 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. Its reporting dashboard lets you see in-depth analysis based on your recent activity. You’re also always up-to-date, as TaxJar collects data automatically all the time.
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.
AutoFile’s greatest asset is the fact that you are guaranteed to not miss a deadline. AutoFile is designed to be easy to use and eliminates the stress of paperwork. Plus, it saves you time in the long run!
It’s amazing, but it can also be a luxury for 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. We’ve essentially covered this topic earlier, but to summarize, instead of paying sales tax within your home state, you will have to encounter paying sales tax to the states where your customers purchased your products, even if you’ve never been a resident there. Taxjar Api Docs
It can be difficult to determine the nexus. TaxJar offers easy-to-understand insights that will help you stay on track. The economic nexus dashboard not only allows you to check the activity between states, but also shows you if you have reached the required threshold for each state. This is especially useful if you have a growing business that wants to expand into more states.
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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 right fit for your business?
TaxJar has been a reliable and high-tech solution that addresses most of the issues business owners have in managing sales tax. It’s been a top pick for these reasons: 1) it’s easy to use, 2) it’s time-saving, and 3) it helps you and your business in many 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 have also been problems with automated calculation as well as interface misunderstandings. It would be nice if those issues were to be improved.
Issues aside, if we answered the question “Is TaxJar the perfect fit for your business?” it would be a resounding YES! This is a great tool to add to your business strategy.
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What 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.
Is TaxJar available in countries other than the U.S.
As of recently most of TaxJar’s features are limited to the United States. They are not yet available in other countries. The TaxJar API tool only is available in certain territories outside the United States. TaxJar API is available to businesses in Canada, Australia and the UK.
Can I cancel my TaxJar account? If so, how?
You can cancel your TaxJar account if you ever feel dissatisfied with the service 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. If you wish to regain access to those services, you can reactivate your account and subscription anytime.
What are the alternatives to TaxJar?
TaxJar isn’t the only sales tax compliance solution available. 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