Sales tax can be a pain to deal with.
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. 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 Upside Down Question Mark
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.
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. This resulted in more burdens for business owners, having to learn and memorize tax codes upon tax codes on top of everything else.
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. That way, you can prioritize what matters the most with your business, without the added hassles of hefty tax computation.
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 Upside Down Question Mark
- TaxJar is designed with streamlined, simple, and quick automated features to keep you in compliance with more than 11,000 tax jurisdictions in 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 dive deep into 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 also get data integrations and up to four free AutoFiles per annum. 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. 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. 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
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! Taxjar Upside Down Question Mark
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. 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 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. 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 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. 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 Upside Down Question Mark
Determining the nexus can be confusing. Thankfully, you don’t have to jump through hoops, because TaxJar provides accessible insights to keep you 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.
Integrations with Online Business Services
TaxJar can seamlessly integrate 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.
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’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 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! We highly recommend you try this out as part of your business strategy!
Frequently Asked Questions Taxjar Upside Down Question Mark
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.
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? How can I cancel my TaxJar account?
If you are unhappy with TaxJar’s service, you can cancel it by going to your account settings. You can cancel your subscription by clicking the red link once you have accessed Plans & Billings.
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 many other options, some with better features, compatibility with more countries, and some with lower price ranges. The following are alternatives to TaxJar.
- Sovos Taxify