It can be difficult to manage sales tax.
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. 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? Taxjar Sole Proprietorship
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. Back then, businesses had to comply with sales tax regulations and rates according to where their transactions were held, where their inventory stocks were located, and how many employees they had hired.
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
We’ve compiled a list of pros & cons to help you make a decision about whether TaxJar is right for you. Taxjar Sole Proprietorship
- 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.
- 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.
- Pricing for lower-tier plans may vary depending on factors like additional AutoFile fees if credits are exhausted. We’ll be discussing pricing soon.
What is the cost of TaxJar?
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. 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 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.
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. 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. 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.
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. 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. This trial is free and you don’t have to pay anything upfront! Taxjar Sole Proprietorship
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The Features of TaxJar
Automated 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! 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. The dashboard allows you to see detailed analysis based upon your activity. TaxJar automatically collects data so you’re always up to date.
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.
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. It saves time and money in the long-term.
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 Sole Proprietorship
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. 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. 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.
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.
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.
Most Frequently Asked Questions Taxjar Sole Proprietorship
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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.
Is TaxJar available in countries other than the U.S.
TaxJar features are currently limited to the United States. They are not yet available in other countries. 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?
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 other alternatives are there to TaxJar
TaxJar isn’t the only solution for sales tax compliance. 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