How TaxJar, Avalara, Taxamo, and Quaderno compare for sales tax compliance
This article was originally published on the Quaderno blog. Click here to see the original one.
TaxJar, Avalara, Taxamo and Quaderno are the top sales tax products on the market. We evaluated them for the value they can offer your business.
Why would we compare ourselves to our competitors?
We know running a business involves hundreds of decisions. We also know complying with sales tax involves hundreds (or thousands) of local policies and laws. You can’t possibly manage both.
So we decided to help you make a decision about how to automate your sales tax compliance! Two birds with one post. See what you think.
How TaxJar stacks up
TaxJar’s primary service is automatic tax reporting in the US. TaxJar collects data from your eCommerce platform and organizes it for you. As a result, you get “return-ready sales tax reports for every state.”
But if you want tax calculation, you have to put in some work. You must configure your online store (via Shopify, Amazon, etc.) to properly charge taxes in all the various states and countries where you sell. Or you can invest time and resources into TaxJar’s SmartCalcs API integration, which you can hire a developer to set up. The SmartCalcs API supports sales tax rates in the United States, Canada, Australia, and the EU. If you sell to other countries, you’re on your own again with manual tax rate configuration.
No automatic tax invoices with TaxJar
Similarly, tax-compliant invoices still fall on your shoulders. Every time you make a sale, it’s your responsibility to create an appropriate tax invoice with all of the correct customer data, send it to the customer promptly, and store the document according to local tax law (sometimes for as long as ten years, like in the EU!).
As far as integrations go, TaxJar offers just 13 integrations with e-Commerce platforms and payment processors. These may cover your basic needs. But crucially absent is an integration with Zapier, which allows you to connect all the platforms, apps, and workflows in you business, so that all of the little behind-the-scenes tasks are completely automated!
Extra service at an extra cost
TaxJar also provides a tax filing service called AutoFile, which works in select US states. You pay an extra $25 per filing (so in each state, for example).
How Avalara stacks up
It’s hard to know where to begin with Avalara. As a global, publicly-traded corporation, Avalara is a massive company with large operating costs, and so they’re focused on massive customer accounts. Avalara’s sales tax product offering isn’t designed particularly for small-to-medium online businesses, especially not those selling internationally. Here’s why.
Need to buy multiple Avalara products
Avalara has a few siloed products, such as AvaTax and Avalara CertCapture, which will solve specific components of sales tax compliance. For example, AvaTax will automate tax calculations, and CertCapture will manage your tax documents. But to truly cover your business’ sales tax needs, you need to purchase an Avalara “Tax Compliance Suite” of products. (And the pricing for that is nowhere to be found on the website. You’ll need to talk to one of their sales agents for that info.)
Plus, the suite you buy will only cover one given country or region. So you’ll need to buy the suite for US sales tax, plus the VAT compliance suite for the EU. And then the GST compliance suite for India or Brazil, if you need those. And anywhere else? Well, you’re on your own because Avalara doesn’t cover those markets.
No automatic invoicing with Avalara
For the hefty price you’d pay (again, we’re just guessing!) to get sales tax compliance through Avalara, you’d think your business also gets automatic tax invoices. But no, Avalara doesn’t offer that service.
How Taxamo stacks up
Taxamo is even more opaque than Avalara, focusing on enterprise “partners” rather than SMBs and everyday entrepreneurs. With such a focus on big businesses, Taxamo’s product and pricing would naturally cater to those large accounts. But we can’t find any information about Taxamo’s affordability. Here’s what we did find.
With the Taxamo Advantage product, Taxamo provides a comprehensive sales tax compliance service for VAT and GST. It appears to offer everything you need, all the same things we’ve built into Quaderno:
- Compliant tax invoicing
- Accurate tax calculation
- Embeddable checkout form
- VAT ID validation for B2B sales
- Secure storage of customer data
- Country-by-country tax reports
Of course, this impressed us. But it’s eerie how Taxamo’s website offers no information about the affordability of the product or the ease of setup. Taxamo is proud of their “partnership approach,” which requires consultation with sales agents and custom integrations. No self-service or one-click anything! For this alone, Taxamo doesn’t seem like the best option for online businesses, but there’s another reason, too.
Roadblocks for SaaS and subscription payments in Taxamo
If you use Braintree or PayPal to accept subscription payments, you must program those transactions as “universal pricing,” i.e. at a fixed price. Taxamo doesn’t accommodate dynamic pricing for these payment processors. This would be a problem if you have a usage-based pricing model for your SaaS or other subscription service. To overcome that, you’d need to build a custom integration with Taxamo’s API.
Our take on Quaderno, maybe with a little bias
Quaderno is an all-in-one tax compliance solution with an affordable price point and a friendly UX. We’re here to serve SMBs, SaaS, digital entrepreneurs, online stores, freelancers, hobbyists, and enterprise CFOs. Our product is for everyone, everywhere. We just want to make your life easier, and to help you grow your business.
Here’s what we’re proud of:Automatic VAT/GST sales threshold alerts around the world
- Automatic VAT/GST tax calculation
- Automatic US sales tax after easy configuration
- 15+ one-click integrations, and the only service with a Zapier integration that allows you to do a million things (quite literally!)
- Collective data reports from all sales channels, platforms, and payment gateways in one easy-to-use dashboard
- Instant tax reports by country
- VAT ID verification for B2B transactions
- Secure storage of customer data, according to local tax laws around the world
- Currency exchange based on official rates, always up-to-date
- Automatic, 100% customizable invoices in every language
- Seamless payment option for your business, Quaderno Checkout
- Helpful accounting reports, such recurring expenses and balance sheets
You can try all of this yourself for free with the Quaderno free trial. Our best-in-class customer support team is happy to help you with any questions.
* At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or accountant.
