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. TaxJar is a cloud-based, state-of the-art automated 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. Do check out our article below, however, because it has a comprehensive overview of TaxJar.
What does TaxJar do? Taxjar Via Email
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.
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.
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
We’ve compiled a list of pros & cons to help you make a decision about whether TaxJar is right for you. Taxjar Via Email
- 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 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!
- 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 take a deeper look at these subscription tiers.
Starting at $19/month, the Starter plan provides essential sales tax services for 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 offers free tools that can help you significantly with sales tax compliance like sales tax reporting, AI-driven product taxability recommendations, and basic CSV data 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.
If your business has more experience and expanded reach, more challenges may likely come ahead. That’s where the Professional plan comes in. 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 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. 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. 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. Unlike the two previous plans, Premium does not have a definite price range. 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
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. This trial is free and you don’t have to pay anything upfront! Taxjar Via Email
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. Calculating sales tax with TaxJar will give you instantly accurate results! 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 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. 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’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. AutoFile is designed to be easy to use and eliminates the stress of paperwork. 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. 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 Via Email
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 seamlessly integrate 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 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 is a popular choice because it is easy to use, it saves time, and it can help your business in many other 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 have also been problems with automated calculation as well as interface misunderstandings. These issues could be addressed.
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 Via Email
What 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 are not yet available in other countries. The TaxJar API tool only is available in certain territories outside the United States. 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?
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 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