The Best Ecommerce Sales Tax Software List
Here’s a shortlist of the best ecommerce sales tax software:
- 4. Canopy — Best comprehensive practice management solution for tax professionals and mid-size accounting firms
With COVID-19 restricting physical businesses, more companies are opting to sell their products online. This has led to an expansion of ecommerce divisions and an unprecedented number of transactions online, boosting the need for ecommerce sales tax software.
As an expanding ecommerce business, you just want to engage your customers and sell more products. The last thing you want in a COVID-affected economy is to rack your brains about sales tax filing, tax liability, tax laws and rates (as if 2020 didn't give you enough headaches already!).
This is where tax compliance software comes into the picture.
These sales tax tools simplify the complications related to calculating sales tax and use accurate tax rates, using the latest tax information and rules for different jurisdictions. Apart from that, they also help in filing returns, making a business audit-ready, and maintaining exemption certificates.
To help you, business owners, in selecting your ecommerce sales tax tool, I have compiled a list of the best software out there. I have outlined their different qualities and functionality, along with anything relevant to you. If you have general questions about the topic, head to the FAQ section at the bottom of this article.
Overviews Of The 10 Best Ecommerce Sales Tax Software
Here’s a brief description of each of the ecommerce sales tax software on my list. Feel free to check out how I picked the software on this list anytime.
Webgility
Best tax management tool for online retailers
This is a perfect sales tax solution for businesses that use QuickBooks, Xero, or Netsuite. Use it to map sales tax to specific items in QuickBooks, Xero, or Netsuite, and improve accuracy.
Webgility supports both single and multiple tax jurisdictions. The integration with Avalara for advanced sales tax rate validation and automated filing makes it all the more lucrative.
Being a BigCommerce certified partner, it provides ecommerce accounting management solutions to 60,000 BigCommerce shopping cart customers.
Webgility pricing starts at $15 per month with a free version to get you started.
Lovat
The best tool to manage global VAT liabilities for companies of all sizes
LOVAT promises to solve the problem of tax reporting within minutes. LOVAT is light and fast, while still being robust enough to serve as an all-in-one solution for global VAT liabilities.
Unless you are feeling generous, I highly recommend their VAT calculation system that makes sure you never overpay.
Use it to file tax returns automatically and be audit-ready. Pricing for LOVAT starts at around $43 USD (35€) per month.
Vertex Cloud
Best tax management SaaS for small and medium businesses
Vertex helps you steer away from manual processes and eliminate audit risks with the help of their powerful content and technology. It sorts and takes care of the end-to-end tax lifecycle. It automates calculation, exemption certificate management, and tax returns, all with a single interface.
Use this tool to stay on top of the latest economic trends, audit activity, and regulations in over 11,000 state and local jurisdictions. Vertex can help users streamline their workflow and processes through capabilities for centralizing, automating, and improving tax accuracy across all transaction billing systems that you use.
Vertex Cloud indirect tax simplifies computing and reporting of sales tax and consumer use tax in the US and value-added tax abroad. Pricing for Vertex is available upon request.
Canopy
Best comprehensive practice management solution for tax professionals and mid-size accounting firms
Canopy is a tax resolution and practice management software. Boasting smart tax analytics and a dynamic client portal, Canopy is spearheading tax technology.
No wonder it got awarded the K2 quality award for tax technology in 2019.
Canopy pricing starts at $89 per month with a free starter option.
DAVO
Best sales tax allocation software for brick and mortar businesses
DAVO collects sales data from the point of sale system so that it sets aside the sales tax amount collected daily. It helps with auto filing and payments of sales tax.
DAVO integrates with QuickBooks online, Clover, Square, Revel, and all the other major POS software.
DAVO sales tax pricing starts at $39.99 per month. They do not have a free version but do offer a free trial.
Thomas Reuters ONESOURCE
Best tool for sales tax policy configuration
Though it may sound like an old school news bureau, Thomas Reuters packs a massive punch in the world of ecommerce tax software. It uses the latest rules and rates to ascertain sales tax, use tax, VAT, and GST.
It makes managing sales and use tax a breeze, with GST and VAT compliance done in a streamlined way through one system. The team also provides step by step sales tax guidance and answers, all in a single place.
Pricing for Thomas Reuters ONESOURCE is available upon request.
TaxJar
Best for auto-filing sales tax returns for companies of all sizes
TaxJar is a great tool for ecommerce companies to arrange and organize sales tax data and fetch return-ready reports. Covering over 14,000 tax jurisdictions, TaxJar ensures that you ask for and collect the right amount for your product.
Also, with companies like Coca Cola, Microsoft, and CBS as clients, TaxJar resonates reliability.
TaxJar pricing starts from just $19 per month for up to 200 orders/month.
Avalara
Best eCommerce sales tax software for companies of any size and industry
The tool I wish Nicholas Cage knew about. With the highest number of ratings on G2, Avalara is one of the leading apps that helps ecommerce companies to get their tax compliance right. Avalara’s Avatax removes the no.1 pain point of accounting overwhelm by supplying sales tax calculations and rules based on geolocation and product classification. It offers more than 700 integrations.
Use it to manage your data across various apps connected with your ecommerce platform. Apart from that, it removes tax from exempt sales and skillfully manages and organizes exempt documentation (no more tedious googling at the 11th hour!).
Avalara offers flexible volume-based pricing starting at $25 per month.
TaxCloud
Best sales tax management service for online retailers selling on marketplaces
TaxCloud is the only sales tax tool with a free state-paid option that’s available for 25 states. It helps determine the applicable sales tax rate based on product or service and collects sales tax at the point of transaction. Use it to file and pay tax returns to appropriate state and local jurisdictions.
The team also provides hands-on support for audit-related matters and state notices.
TaxCloud is extremely affordable, with pricing starting from $9 per month. It also has a free version and a free trial.
Taxify
The best tool to avoid tax gaps for online retailers
Taxify is a product of the Sovos brand, one of the world’s leading voices in tax for the last 30 years. With over 14,000 tax jurisdictions spanning across 50 states, Taxify will keep the overburdened ecommerce sellers tension-free with accurate rates.
It helps you automatically comply with tax changes and offers an easy way to auto-file tax returns. Also, it has readily available tax experts that will cater to your nuanced needs and questions.
Taxify is priced at $47 per month with an option of a free trial.
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The 10 Best Ecommerce Sales Tax Software Comparison Chart
| Tool | Free Option | Price | ||
|---|---|---|---|---|
| 1 | Webgility Best tax management tool for online retailers | Not available | From $15 per month | Visit Website |
| 2 | Lovat The best tool to manage global VAT liabilities for companies of all sizes | Not available | From $43 USD (35€) per month | Visit Website |
| 3 |  Vertex Cloud Best tax management SaaS for small and medium businesses | Not available | Visit Website | |
| 4 | Canopy Best comprehensive practice management solution for tax professionals and mid-size accounting firms | Not available | From $89 per month | Visit Website |
| 5 |  DAVO Best sales tax allocation software for brick and mortar businesses | Free trial | From $39.99 per month | Visit Website |
| 6 |  Thomas Reuters ONESOURCE Best tool for sales tax policy configuration | Not available | Visit Website | |
| 7 |  TaxJar Best for auto-filing sales tax returns for companies of all sizes | Not available | From $19 per month | Visit Website |
| 8 |  Avalara Best eCommerce sales tax software for companies of any size and industry | Not available | Visit Website | |
| 9 |  TaxCloud Best sales tax management service for online retailers selling on marketplaces | Free trial | From $9 per month | Visit Website |
| 10 |  Taxify The best tool to avoid tax gaps for online retailers | Free trial | From $47 per month | Visit Website |
Other Ecommerce Sales Tax Software Options
Here are a few more that didn’t make the top list.
- 123 Sheets - Best for accountants and bookkeepers to file HMRC VAT returns for their clients
- Utility software - Best basic return-filing software for small to mid-size firms in California and NY
How I Picked The Best Ecommerce Sales Tax Software
In coming up with this list, I researched which were the most popular sales tax software on the market based on user ratings and reviews. Then, I narrowed down my choices weighing a variety of factors that make software a good option for filing taxes. Finally, I evaluated the tools on this list based on the following criteria:
User Interface (UI)
Is the ecommerce sales tax software clean and attractive? Is it easy to view and calculate the different tax rates? Taxes are already a complicated topic, so choosing a tool that has an intuitive UI can be a time saver.
Usability
Is it easy to learn and master? Does the company offer good tech support, user support, tutorials, and training? Is it easy to launch and update sales details and compute taxes quickly?
Integrations
Is it easy to connect with other tools? I look at all the ways in which these cloud-based tools connect to other providers to expand their functionality. Therefore, I include details on API information that will help you create custom integrations, pre-built options, and third-party software. Is it easy to connect with various Point of Sale software, ecommerce CRM software, or other ecommerce tools, like Shopify?
Pricing
I research these tools and find relevant information regarding their pricing. Small businesses are particularly price-sensitive, which makes this an important criterion. I lay out details on pricing per month on monthly plans, free trials, free versions, and more.
Ecommerce Sales Tax Software FAQs
Now before I go deeper into each tool, I want to discuss some of the most frequently asked questions related to ecommerce sales tax software.
How Does Ecommerce Sales Tax work?
Do I Need To Charge Sales Tax When Shipping Out Of State?
How Do I Charge Sales Tax For Online Sales?
What key features should I look for in ecommerce sales tax software?
What's Next?
These are my top picks to help you solve your tax-filing needs once and for all. If you use Magento, you might benefit from knowing how to add VAT in Magento 2. But, since we discussed so much about Sales, here is a list of related payment processing tools:
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