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. 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? Vat Explained Taxjar
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. 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. 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? TaxJar simplifies the complex tasks of sales tax compliance and makes them simpler. 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. Vat Explained Taxjar
- 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.
- 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’s easy to use – you don’t need to be a full-on tax or accounting expert to understand how it works!
- 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.
What is the cost of TaxJar?
TaxJar offers three pricing options: Premium, Professional, or Starter. 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 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. 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. 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.
TaxJar is worth a 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! Vat Explained Taxjar
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The Features of TaxJar
Automatic Sales Tax Calculations
TaxJar comes with fully optimized functions and services built to ease 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.
TaxJar makes it easy to quickly calculate taxes and keep up with 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 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.
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. Vat Explained Taxjar
It can be difficult to determine the nexus. 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. It comes in very handy, especially if your business continues to grow and reach more states.
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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. 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. 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.
It’s highly recommended, and we are right to be so. However, it isn’t perfect in every aspect. 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. 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.
Most Frequently Asked Questions Vat Explained Taxjar
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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. 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?
You can cancel your TaxJar account if you ever feel dissatisfied with the service 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 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