Each year, the issue of collecting and filing sales tax becomes more complex. Many revenue items that once were not taxed (such as services) are now taxed in some jurisdictions. If your company is subject to sales tax in multiple jurisdictions, it’s even more complicated. If your company sells nationwide–or even worldwide–then sales tax can become very, well, taxing indeed. In the United States alone, there are thousands of tax jurisdictions, and their sales tax rates constantly change. Keeping up in order to be compliant can be mind-boggling.
Luckily, there’s a way to avoid being taxed (stressed) by sales tax. Yep, you guessed it–there’s an app for that too, for both QuickBooks Online and Xero. The two major players are Avalara and TaxJar. Avalara is the larger company, and serves all kinds of businesses. TaxJar is geared more towards small ecommerce sellers who use platforms like Paypal, Etsy, eBay, and Amazon. TaxJar primarily aggregates sales data and facilitates the sales tax filing process.
Avalara, on the other hand, offers two primary applications–one for calculating and filing sales tax, and the other for tracking sales tax exemption certificates. Avalara integrates with QuickBooks, Xero, and hundreds of online shopping carts and other financial applications. Pricing for both Avalara and TaxJar is based on transaction volume.
Both Avalara and TaxJar integrate with QuickBooks and Xero. If your company needs help calculating, collecting, and/or filing sales tax in multiple jurisdictions, I encourage you to check out at least one of these products.
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