Sales tax compliance has long been a challenge for businesses operating online. Whether you run an eCommerce site or offer Software as a Service, you'll need to comply with sales tax rules across thousands of jurisdictions.
The right tools can make this process easier. TaxJar and Avalara are two popular software solutions. Both streamline the process of calculating and collecting sales tax, as well as filing sales tax returns and remitting the taxes owed. However, there are important differences between the two products.
This TaxJar vs. Avalara review can help you to decide which solution is best for you, given the size and scope of your operations, as well as the industry you operate within.
TaxJar is a cloud-based software solution that automates every aspect of sales tax compliance in a single streamlined platform. The program is ideal for multi-channel sellers and growth-minded businesses that want to incorporate AI to remove the administrative burden caused by sales tax collection and remittance.
TaxJar offers specialized solutions for companies in specific industries, including retail, medical, food and beverage, ecommerce brands, and SaaS. Designed for small to midsize businesses, TaxJar's platform can be easier to use than Avalara's, but Avalara can accommodate larger company sizes and offers more pre-built integrations.
TaxJar automates every aspect of the sales tax lifecycle. Some of the key features the software offers include:
TaxJar offers pre-built integrations with popular eCommerce platforms so you can integrate your platforms with the program in minutes. Integrations are configurable from the TaxJar dashboard. Some of the platforms you can integrate with include:
TaxJar API also allows you to build your own integrations and offers detailed documentation and open-source clients to make that possible.
TaxJar offers multiple pricing plans to meet your needs:
TaxJar received mixed reviews, earning a rating of three out of five stars among over 100 users on Shopify. Most of the negative reviews complained of poor or non-existent customer support, while the positive reviews praised the automation of compliance obligations, as well as the quick and easy setup.
TaxJar is best for smaller businesses within the industries the software is targeted towards, including retail, medical, food and beverage, digital goods, and SaaS. The simple platform, limited learning curve, and affordable price ensure that small businesses will get good value from the cloud-based software solution.
>> Other Option: TaxJar Alternative
Avalara offers a suite of cloud-based tax compliance software solutions that can help your company manage sales and use tax; property taxes; occupancy taxes; and cross-border taxes.
The company offers specialized solutions for a wider variety of industries than TaxJar, including manufacturing, retail SaaS, hospitality, short-term rentals, accounting firms, communications, government and public sector, and supply chain and logistics. Its sales and use tax solutions are designed for businesses of all sizes, and it offers more than 1,200 integrations, which is more than many competitors. However, it does come with a steeper learning curve.
Avalara's full-featured software tools automate all aspects of sales tax compliance, from calculating taxes due to collecting and accessing exemption documents to preparing and filing returns and remitting taxes due. However, while entry-level costs are low, prices rise quickly when using additional services.
Avalara offers automated sales and use tax compliance for online sellers across multiple industries. Some of the key features offered include the following.
Avalara has more than 1,200 pre-built integrations, which is more than many competitors. Platforms you can integrate with include:
You can also design your own integrations with Avalara's powerful API solutions.
Avalara Sales Tax Registration costs $349 per location. Avalara is not as transparent with pricing as TaxJar, and it charges extra fees for additional services, such as filing returns.
Avalara received 4.7 out of a possible five stars on Capterra, which is a site focused on helping companies select software. Comments on customer service were mixed, with some praising the support they received and others reporting difficulty getting the help they needed with setting up the platform or accessing its features. Positive reviews praise the Nexus tracking features, as well as greater accuracy than TaxJar for calculating taxes on the street level.
>> Other Option: Avalara Alternative
Avalara and TaxJar aren't the only options out there. Numeral provides a simple alternative that allows your business to spend less than five minutes monthly managing your sales and use tax obligations.
Numeral is run by operators and CPAs and offers a white-glove solution without the steeper learning curve of both TaxJar and Avalara. Sales tax registration costs half what Avalara charges, and you'll also benefit from transparent fixed fees with no monthly subscription required. You'll also benefit from services competitors don't offer, including reports on both sales taxes collected and sales taxes paid so you can determine if you're under-collecting taxes.
While both Avalara and TaxJar received mixed reviews when it comes to customer service, Numeral also offers 24/7 support, providing the peace-of-mind that comes with knowing help is there when you need it.
You can book a free demo today with Numeral and there's no long-term commitment required, so contact Numeral today to see how simple sales tax management can be.
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Software is essential to make complying with sales tax rules easier. The right option for you will depend on factors like your budget, the services you need to take advantage of, and the industry you operate within. Check out customer reviews, features, and prices to decide which sales tax compliance program makes sense for your business.
And for ecommerce brands specifically, know that there are many other options to consider too.
Still not sure what's best for you? Check out some of our other comparisons:
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