Published January 24, 2025
Which sales tax software is best for you
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Leveraging the right sales tax software can significantly streamline your business operations and enhance compliance efficiency. However, knowing how to find the best software can be challenging. In this article, we’ll discuss what to look for in sales tax software and how to find the best software for your business.
Sales tax is a requirement for every business in nearly every state, but calculating it manually is time-consuming and can detract from other responsibilities and sales. Instead, most retailers turn to sales tax software to reduce the time spent managing sales tax.
The benefits of sales tax software are numerous, including stronger data accuracy and reduced errors, increased compliance, and a simplified approach to preparing and filing state tax returns. And with sales tax regulations changing often, tax software helps companies stay updated on the latest rates and policies. With sales tax software, businesses can spend more time growing and selling and less time managing taxes.
There are numerous sales tax software options, but not every platform fits every company. As you consider your options, look at these seven features:
One of the biggest factors in which sales tax software a company chooses is often price. When looking at options, consider the pricing structure and if it matches your company’s budget. Does the pricing structure reflect all the features you need, or will you be paying for features you won’t use?
Sales tax software aims to simplify the process, not make it more difficult. Look for software that is intuitive and that can be used by all employees, not just those with accounting degrees or strong experience with sales tax. Ask potential vendors for a demo of their software to see how it reacts in different situations so employees can make sure it is usable for them.
Sales tax software is useless if it isn’t accurate. Look for software that has a strong understanding of your tax rates and regulations and that is regularly updated to stay accurate with current regulations. Ask vendors about their accuracy rate and how often the software is updated.
Who will you go to when you have an issue? Some vendors give customers a direct line to call with questions, while others point customers to online forums or general support numbers. Consider the support you’ll need and find a vendor that matches that, such as providing personalized training or regular check-ins as you adjust to new technology.
Although almost all industries levy sales tax, many have nuances or unique challenges. Ask potential vendors what experience they have in your industry and if they offer any special features for your area. While you don’t necessarily have to use sales tax software designed specifically for one industry, having a support team that understands the ins and outs of your type of business is helpful.
Your business likely has many other accounting and financial systems in addition to sales tax software. Instead of manually moving information between systems or risking it falling through the gaps, look for a tax tool that integrates with your other systems.
Although many sales tax software options exist on the market, we regularly recommend the same few products. Here are three leading sales tax software platforms that provide reliable, accurate service:
CereTax is a sales tax automation platform designed for complex industries. It offers scalable solutions, actionable analytics, and reduces demands on IT teams. With its advanced technology, it streamlines sales tax calculation, exemption management, and provides in-depth analytics. It integrates seamlessly with sales, financial, and ERP systems, aiding in confident business decisions.
The Sales Tax People also have an in with CereTax and can get you a wicked good deal... 🤫... Contact a member of our sales team to learn more.
| Pros | Cons |
| • Modern user interface • Competitive pricing • Good automation features | • Newer to the market • Limited integration options • Smaller customer base |
Vertex collects sales tax, monitors nexus, tracks threshold, and more. The platform is among the most robust sales tax software available, with knowledge of more than 300 million tax rates and regulations around the world. The downside is that it can be too much for some businesses, especially those that don’t operate internationally.
| Pros | Cons |
| • Robust enterprise-level features • Strong handling of complex tax scenarios • Excellent accuracy rates | • Higher price point • Steep learning curve • Better suited for large enterprises |
Avalara is designed for companies that operate in multiple countries and streamlines sales tax across the U.S., Canada, and Europe. The cloud-based system updates regularly, ensuring businesses have the most updated tax rates and regulations.
| Pros | Cons |
| • Extensive integration options • Real-time tax calculation capabilities • Strong reporting features and analytics | • Expensive for small businesses • Complex implementation process • Awful customer support |
Small businesses have unique sales tax needs and often require software that is adaptable and takes much of the load off their plate so they can focus on growth opportunities. Here are two leading options:
TaxCloud can compute sales tax across more than 13,000 jurisdictions. It accurately collects sales tax from each transaction, files tax returns, and offers audit management services. TaxCloud is an all-in-one solution with strong customer support designed for people with little accounting experience. It allows small business owners to take a more hands-off approach to sales tax and has some of the most competitive rates in the industry.
| Pros | Cons |
| • Free for merchants in member states • Simple setup process • Good for small businesses | • Limited features compared to paid solutions • Basic reporting capabilities • Limited customer support options |
SOVOS Taxify provides sales tax software that is easily integrated into other platforms. It combines sales tax processes with compliance support to become a trusted partner for small business owners. Instead of handing over all sales tax processes, SOVOS works as sales tax support so that small business owners can stay engaged with the sales tax process in a much more simplified way.
| Pros | Cons |
| • Strong global tax compliance capabilities • Good for large enterprise solutions • Comprehensive regulatory updates | • Complex implementation process • Higher cost structure • Interface can be overwhelming |
TaxJar specializes in e-commerce business sales tax and provides all-in-one services that do everything from classifying products to filing taxes. It is owned by Stripe, which allows for seamless integration with other Stripe products commonly used by companies. TaxJar has a wide variety of features, but it tends to be more expensive than some other options.
| Pros | Cons |
| • User-friendly interface • AutoFile capability for multiple states • Good for small to medium businesses | • Limited customization options • Poor international tax handling • API documentation needs improvement |
While nearly all reputable sales tax software programs charge a monthly, annual, or per-transaction fee, many offer free trials. If you’re on the fence or deciding between a few services, take advantage of the free trial to test it for a week or two and see how it applies to your business.
Some free accounting software offers basic sales tax functions, but those systems often aren't scalable or able to meet the needs of businesses, even small businesses.
Even if you know what features to look for, choosing the sales tax software that is best for you can still be challenging. That’s where The Sales Tax People comes in.
We leverage our expertise and partnerships with leading software solutions to help you find the ideal software solution for your unique needs. We guide our clients through the procurement process, helping them weigh the pros and cons of each option. Our goal is to ensure that you choose a solution that meets your immediate needs and aligns with your long-term business goals.
Every business has different sales tax needs depending on its products, services, and geographical footprint. We help our clients set up taxability rules and code mapping that align with their circumstances. This ensures that the chosen software solution accurately calculates sales tax rates based on your product categories and jurisdictions.
Choosing the best sales tax software is just the first step — companies then have to implement the software and integrate it into their existing systems.
The most important thing to remember is that even with sales tax software, companies still have to be involved with sales tax. No matter what software companies claim, there’s no such thing as full sales tax automation. Sales tax software simplifies the process, but that doesn’t mean you can set it and forget it. Effective implementation requires monitoring and checking that the system meets your current needs.
Here are a few other ways to ensure effective implementation:
Sales tax software is helpful, but how do you know if your business needs a sales tax consultant? As your business grows, sales tax may become more complex. Continue to educate yourself and monitor:
Once your business meets economic thresholds or physical nexus is established in multiple states, you should take a more consultative approach with sales tax. While automation may apply the correct rate and make the proper determinations, you may need an expert to monitor and ensure compliance.If you want to learn more about sales tax and how to prepare your business with a smooth sales tax process, no matter where you're located, schedule a call with a sales tax expert to get started with a customized sales tax system for your business needs.
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