A few cents here and a few cents there; sales tax pervades our daily lives and, for many, is the kind of routine that barely registers a thought (unless we’re buying, say, a car). It’s a common topic of debate during election seasons, but when ringing up lunch or buying a new scarf online, sales tax is just part of the game. It’s easy for consumers to ignore the fact that keeping up with sales tax laws and fluctuating rates is a unique challenge for the people selling us our stuff.
Businesses have a legal obligation to be fair and accurate in the tax they tack on, and ensure this money goes to the right place. Sales tax compliance software is a convenient way for those who sell goods or services to stay on top of taxation. Though we previously featured a variety of categories related to this type of sales (e.g., Retail Software, E-Commerce, POS), these didn’t address the tiresome task of calculating tricky taxes and adhering to ever-changing rules across thousands of unique transactions. Now, we’ve officially added this category of software to G2 Crowd, allowing commerce-related businesses both big and small to read about and write reviews for platforms in this incredibly helpful space.
The particulars of sale tax are not as cut-and-dry as some may think. In the United States, these percentages vary as you cross over different city lines. As of this moment, statewide tax is collected in 45 of the 50 states, as well as the District of Columbia. In 38 states, certain regions are permitted to apply a local sales tax — in some cases it’s tossed on top of the state tax, while in others it’s applied in place of the state tax. This is confusing enough as it is; taxes can also vary by item, by customer and by day of the year. Not to mention that a government bill can alter these rates or rules overnight.
Sales tax compliance software serves to slide these Tetris pieces into place, informing users of important changes and exemptions as well as ensuring the correct amounts are collected for each transaction. These tools will also help guide business owners in properly reporting taxes and staying current on city, county, district and state forms.
In addition to standard sales tax, supplemental taxes may come and go, based on economic needs or shifting priorities in the public eye. A recent example is the Chicago sweetened beverage tax, which briefly impacted the lives of those G2 Crowd employees partial to Dr. Pepper. The law, which added a penny-per-ounce charge for each retail soda, was enacted and repealed within two months last year. It’s a strange story indeed, but not the first or last time a random sales tax law will come rolling down the pipeline line like a can from a vending machine.
As these stories play out in the headlines, sales tax compliance software delivers action items to businesses so those extra pennies don’t get lost in the shuffle and potential legal headaches are averted. A tool like this can quickly become an indispensable part of your business’ software ecosystem, saving you time, money and barrels of stress as you traverse your daily transactions.
According to G2 Crowd’s research specialists, who determine the requirements for each category on our site, in order to be included in this new category, a product must:
- Track sales tax rates and rules for all jurisdictions relevant to a user’s products or services
- Track and apply sales tax exemptions for the appropriate times, products, transactions or accounts
- Automatically update rates and rules in response to policy revisions or new legislation
- Integrate with accounting and transaction tools so correct rates are communicated, stored, and applied where necessary
There are currently 15 products in this new category, only 6 of which have reviews as of March 10, 2018. As the category expands and vendors upload profiles to represent their sales tax compliance solutions, the data we collect from reviews will grow increasingly valuable for prospective buyers, and the search will become less taxing all around.
Here are a few of the products in this new space.
Taxify, launched in 2014, is a tool focused on delivering “effortless sales tax” for e-commerce businesses. The product is a brainchild of Sovos, a Massachusetts-based organization that’s been in the tax and compliance game for nearly 40 years. Sovos developers have applied this breadth of experience to make a powerful platform that covers all the bases, including automated rates and filing in 14,000 U.S. jurisdictions. In 2016, Taxify announced a partnership with Xero, creating a powerhouse of accounting for small businesses.
Because it’s brand-spanking-new to our site, Taxify doesn’t have any reviews from G2 Crowd users at the moment. But the company offers testimonials on their own website, including this one:
“Taxify is a partner to e-commerce businesses and accountants to manage the mechanics of the complex world of sales tax compliance in the 21st Century,” said Scott Scharf, co-founder of Catching Clouds. “They take on this dirty job so you can focus on growing your business. We couldn’t scale our business or deliver as much value to our e-commerce customers without Taxify as a partner.”
Starter membership is $47/month for up to 1,000 monthly transactions; Standard is $97/month for up to 5,000 monthly transactions; Premium is $247/month for up to 20,000 monthly transactions; Enterprise plans require calling a Taxify representative for a quote.
Print-ready tax forms, Real-time tax rates for 14,000 jurisdictions, automated filing & remittance
Self-service web portal, extensive partner apps, government certified
Avalara was founded in 2004, and in the decade that followed it grew into a global authority on tax technology, featuring offices in India, Brazil, Belgium and the U.K. and a headquarters in Seattle. AvaTax is a fully cloud-based solution that offers automated tax calculation for 190 countries and 12,000-plus jurisdictions in the States. The AvaTax website goes into more detail about the ease of calculating the correct taxes for U.S.-based companies selling overseas to the E.U., and vice versa. This includes duty and import taxes, which are factored into the “landed cost,” or final total from doorstep to international doorstep.
“AvaTax makes sales tax calculations and reporting very simple. It gives you a peace of mind that everything is being handled correctly in regards to our sales tax obligations with multiple states. Every state has different rates and laws and AvaTax helps us keep everything we do in compliance with each state.” — AvaTax review from Kellie H.
Inquire with the vendor
AvaTax Exemption (compliance document management), 500 pre-built integrations, landed tax calculator
Full multiple-entity support for every business location and department, address validation, live chat support
SmartCalcs is an extension of TaxJar, one of the best-reviewed tax filing systems featured on G2 Crowd. With a client portfolio that includes Dell and DoorDash, SmartCalcs builds upon the reputation of TaxJar to deliver a robust and reliable compliance and calculation tool worthy of attention. The SmartCalcs Accuracy Guarantee promises 99-or-greater percent accuracy, and elsewhere on the SmartCalcs page the company states that users can count on 99.99 percent uptime for the software (reflected on its own system status page).
The SmartCalcs API doesn’t have any reviews at this time, but you can find 14 reviews of the core software currently on the TaxJar profile page, which average out to a near-perfect 4.9 out of 5 stars.
$17/month for up 1,000 monthly transactions; $44/month for up to 5,000 monthly transactions; $89/month for up to 10,000 monthly transactions
API of TaxJar platform, product-level taxability, multi-state nexus
High performance & reliability, guaranteed accuracy, automated reporting
In the time since you’ve started this article, there’s a good chance that sales tax rates or rules have been amended somewhere in the world. If you’re in any sort of business with goods to sell — whether brick-and-mortar, over the phone, online, etc. — keeping up with the flow is a necessary evil. Our hope is that this new category on G2 Crowd helps reduce the hassle by improving transparency in the space and sorting the various products on the market based on real-user feedback. You can read and write reviews on our site duty-free, and add to the nearly 400,000 verified reviews aiding B2B buying decisions around the world.
If you’re interested in software to assist with general tax filing, check out the Corporate Tax category. You can also explore the other Accounting & Finance categories, learn how each type of product can benefit your business, and read reviews from entrepreneurs just like you. Each category on G2 Crowd started from scratch; this category, just like tax rates themselves, will inevitably grow and grow in the months ahead!
* Please note: Reviews have been edited for spelling and grammar.