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.
With TaxJar, all the challenges in sales tax are simplified, giving you and your business the upper hand. This review will cover all aspects of 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 Or Avalara
TaxJar was established in 2013 to serve online sellers and business entities. Its goal is to simplify the complex process of sales tax compliance. There are over 11,000 tax jurisdictions in the United States. Each one has its own rules and regulations. 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. Businesses were tasked with handling varying degrees of tax burdens, and these may vary based on varying 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.
That’s quite a task. TaxJar simplifies the complex tasks of sales tax compliance and makes them simpler. 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 Or Avalara
- 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.
- 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’s easy to use – you don’t need to be a full-on tax or accounting expert to understand how it works!
- TaxJar is not only less complicated than other software, but it also offers amazing customer support and a wealth of resources that will help you comply with sales tax.
- TaxJar is generally easy to use, but it can be complicated for merchants who are not familiar with the process.
- Sometimes, the interface can be frustrating. Some users report having to open more than five tabs just to file a tax return for one state.
- 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.
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 are also given data integrations with up to three e-commerce services and four free AutoFiles per year included within the tier. Starter also allows for support for multiple business accounts and e-mail support.
If your business has more experience and expanded reach, more challenges may likely come ahead. The Professional plan is for you. Starting at $99/month, you get all the features from the Starter tier, plus some upgrades like full API access, advanced CSV imports, and economic nexus features.
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. Apart from providing experienced businesses and enterprises with all the Starter and Professional features, Premium offers unlimited API and data integrations with many e-commerce and marketing services, unlimited AutoFiles, and an unlimited number of team users.
You also get 25,000 API calls per hour, and white-glove support through a dedicated account management group. Unlike the two previous plans, Premium does not have a definite price range. It is fully customizable to meet your business’s needs and can be negotiated through TaxJar’s customer support.
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. This trial is free and you don’t have to pay anything upfront! Taxjar Or Avalara
Automatic Sales Tax Calculations
TaxJar offers fully optimized functions and services that are designed to reduce 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 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.
Organizing reports is simpler and more accessible with TaxJar – everything is centralized, making way for quick collaborations with your finance team. 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 is what makes the platform stand out from the rest. It’s an electronic sales tax filing tool that gathers user information from e-commerce providers and files them into an automated sales tax return report and payment to be submitted to any state.
AutoFile’s greatest asset is the fact that you are guaranteed to not 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!
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 Or Avalara
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 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. To determine sales tax, you can connect your account with online marketplaces such as Amazon, Etsy and eBay. Integrations can be made with e-commerce platforms such as Shopify, BigCommerce and other similar services that allow you to sell your listings, use payment gateways such as Stripe or PayPal, and operate management systems like Oracle NetSuite, Intuit QuickBooks and many more.
Square, WooCommerce, Walmart, Salesforce and Magento are just a few of the other services that can be integrated with TaxJar. You can also import data from third-party service providers through CSV if you don’t see your online business solution.
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 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 reported having problems with customization, while others found issues with TaxJar’s integration with some apps like Shopify. There have also been problems with automated calculation as well as interface misunderstandings. It would be nice if those issues were to be improved.
All other issues aside, TaxJar would be the perfect fit for any business. This is a great tool to add to your business strategy.
Most Frequently Asked Questions Taxjar Or Avalara
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?
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.
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 many other options, some with better features, compatibility with more countries, and some with lower price ranges. We suggest you check out the following as alternatives to TaxJar:
- Sovos Taxify