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. But you may be surprised to find there’s an easier way out of 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. Do check out our article below, however, because it has a comprehensive overview of TaxJar.
What Does TaxJar Do? What Is The Other Exempt Category Under 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.
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.
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?
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. What Is The Other Exempt Category Under Taxjar
- 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.
- 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.
- 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.
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 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 are also given data integrations with up to three e-commerce services and four free AutoFiles per year included within the tier. 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. 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. 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.
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.
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. 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. You don’t need to pay upfront to access this trial! What Is The Other Exempt Category Under Taxjar
The Features of TaxJar
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! 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. 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. 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.
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.
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. What Is The Other Exempt Category Under Taxjar
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. 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 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.
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 were also issues with interface misunderstandings and automated calculation. These issues could be addressed.
All other issues aside, TaxJar would be the perfect fit for any business. We highly recommend you try this out as part of your business strategy!
Frequently Asked Questions What Is The Other Exempt Category Under Taxjar
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?
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 sales tax compliance solution available. There are other alternatives out there, with some offering more features and compatibility with more territories, and others with cheaper price ranges. The following are alternatives to TaxJar.
- Sovos Taxify