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. But you may be surprised to find there’s an easier way out of it. Introducing TaxJar, the cloud-based state-of-the-art automatic sales tax platform.
With TaxJar, all the challenges in sales tax are simplified, giving you and your business the upper hand. In this review, we’ll take you through all the things you need to know about this service. We will also discuss the pros and cons of TaxJar and give our final verdict on whether TaxJar is worth it for your business management system. 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 Basic Square
Since its inception in 2013, TaxJar serves business enterprises and online sellers, intending to ease the already complicated 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.
This process may appear simple on a surface level, but in reality, it’s quite complicated. Companies were given different tax burdens to handle, which can vary depending on various factors. The US Supreme Court in 2018 ruled that all businesses have to pay sales tax regardless of where the product was purchased. Business owners were forced to learn and remember tax codes after tax codes, adding more complexity.
It’s a lot to take, right? 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. Taxjar Basic Square
- 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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- 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 options: Premium, Professional, or Starter. Let’s dive deep into these subscription tiers.
The Starter plan starts at $19/month and provides essential sales tax services to 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 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 includes an increased limit on data import and API integration, from 3 to 10,10,000 advanced API calls per hour, up to 10 team managers users, and 12 free AutoFiles per calendar 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.
If you’re interested in TaxJar, you may want to check out its 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 Basic Square
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Automatic Sales Tax Calculations
TaxJar offers fully optimized functions and services that are designed to reduce 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 this is automatically compiled into reports for different states, complete with breakdowns from their tax jurisdictions.
Organizing reports is simpler and more accessible with TaxJar – everything is centralized, making way for quick collaborations with your finance team. 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! AutoFile is designed to be easy to use and eliminates the stress of paperwork. It saves time and money in the long-term.
It’s amazing, but it can also be a luxury for lower-tier subscribers. Starter plan users, for example, get only up to 4 free AutoFile enrollments 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 Basic Square
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. To determine sales tax, you can connect your account with online marketplaces such as Amazon, Etsy and eBay. 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 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’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.
It’s highly recommended, and we are right to be so. However, it isn’t perfect in every aspect. 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. 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.
Frequently Asked Questions Taxjar Basic Square
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Which types of businesses use TaxJar?
Small and medium-sized businesses, large-scale companies, freelancers, and individuals can all use TaxJar. TaxJar served more than 20,000 businesses as of 2022. This includes some well-known companies like Coca-Cola and Land Rover, Microsoft, Shein and many other.
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 have not yet been extended to other countries outside US jurisdiction. Only the TaxJar API tool is supported in a few non-US territories. 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.
TaxJar’s reporting tools, as well as AutoFile, will be removed from your account. You can reactivate or cancel your subscription at any time if you want to gain access to these services.
What other alternatives are there 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