Sales tax compliance is crucial to build a solid business. Therefore, we’ve decided to take a look at TaxJar vs Avalara since these are two of the more popular tax compliance software products out there.
As online brands evolve, they’ll need better resources to meet market demands. One good example is tax compliance automation which ensures you can file your taxes on time. Plus, it helps dealing with the regional laws and policies of each market.
It’s tough to manage taxes and run an online business at the same time. Luckily, there are many tax compliance tools to ease the load.
Today we will review the features, and pros and cons of each product. Hopefully, this will help you select the best tax compliance software to suit your needs.
Let’s dive right in!
TaxJar vs Avalara: Features & Pricing
Founded in 2021, Taxjar is a simple tax automation solution. In essence, TaxJar collects and organizes sales tax data from your selling platform.
The program has more than 20,000 users, but it’s preferred by small businesses.
This is because of TaxJar’s simple interface and API. The app manages all sales tax reporting and filling.
TaxJar Features
A great tool for multi-channel brands. TaxJar features integrations with payment processors and eCommerce sites, such as Amazon and Shopify.
Here are some of TaxJar’s main features:
- Accounting
- Audit, compliance, and exemption management
- Tax calculation and filing
- Taxability verification
- Transaction tracking
- Data sync, import, and export
- Prioritization and projections
- Reporting and statistics
- Sales reports and sales tax management
- Third-party integrations
TaxJar is known for its effective automation features. For example, sellers can export data from their marketplace, without downloading a CSV file.
The app is focused on automatic US tax reporting. Most countries outside the States require a manual tax input.
TaxJar Pricing
Brands can access a free 30-day trial period. Also, the website does not request a credit card to start the trial. If the trial convinces you, then TaxJar features 3 pricing tiers:
- Starter – $19.00 per month
- Pro – $99.00 per month, for up to 200 orders
- Premium – Custom fee set by the client’s needs
Note that TaxJar values transparency. There are no hidden fees nor forced contracts. Every TaxJar feature is included in its fixed monthly prices.
Related Content: Taxjar Review, Pricing, and Recommendations [2021]
Avalara
This software is more suited for medium to large brands. Avalara is sought after for its various features. For example, VAT calculation, or file and remit returns.
Avalara features 2 key products. The first is AvaTax, considered the accounting software for big companies. The second program is Avalara TrustFile, which is a sales tax data manager.
In addition, Avalara is compatible with over 600 apps. These included CRM providers, eCommerce suites, and accounting systems.
Avalara Features
As we said, Avalara is an all-round tax solution. It is a large, global company suited for big, international sellers.
Thanks to its size, Avalara does a great job staying current with local tax changes and rates. So, customers can rest safe knowing their reporting is accurate.
Plus, you can save a report for future uses. This means you can set up every tax report in a few clicks.
Here are some of Avalara’s main features:
- Accounting integration
- Compliance and exemption management
- Consumer use tax
- Tax calculation and filing
- Taxability verification
- Transaction tracking
- Data sync, import, and export
- Multi-currency
- Sales reports and sales tax management
- Value Added Tax (VAT)
One downside is that Avalara features a unique CSV format which sellers must comply with. Otherwise, you won’t be able to upload your sales tax data.
Besides, the suite has a bad reputation for customer support, as reported by some Avalara customers.
Avalara Pricing
There is no pricing tier available for Avalara. Rather, the service sets custom fees, according to each client’s needs.
You must request a quote to receive pricing data. After you submit all requested details, Avalara will contact you.
Avalara offers customized services at flexible prices. So, you can pay for a unique plan, based on your specific tax needs.
Yet, Avalara includes some extra fees besides a monthly bill, such as account and filing activation, or premium support.
TaxJar vs Avalara – Feature Comparison
| TaxJar | Avalara | |
| Service Level Agreement Uptime | Guaranteed 99.99% uptime for all subscriptions. | 99.5% uptime as a minimum. With higher SLA available upon purchase. |
| Ecommerce Integration | In-house built integrations and plugins | Outsourced, third-party integrations |
| Pricing | One monthly payment with no hidden fees | Custom fee, plus additional fees per service required. |
| Accuracy Guarantee | Up to 2x of a year’s cost. Users have a 14-day notification window, in case of an audit. | Up to 2x of a year’s cost. Users have a 14-day notification window, in case of an audit. |
| Upgrade Policy | Contact a TaxJar account manager. | Upgrade and Processing fees required to update. |
Source: TaxJar
Final Thoughts
As you can see, each tax automation software (TaxJar vs Avalara) comes with its own perks and setbacks. But how to pick the best for you?
TaxJar is great for small brands rather than sellers in a few marketplaces; it’s a straightforward, cost-effective solution to tax compliance. Additionally, you get all features for a fixed fee.
On the other hand, Avalara has better infrastructure. It’s a more suitable choice for big names that sell overseas. It is a customizable solution, though the extra fees are a downside.
Try to work with both TaxJar and Avalara separately. Remember that both suites offer free trial periods.
By doing so, you can experience how each tool helps with the following:
- Proper register in your sales territories
- Collecting the exact sales tax amount
- Remitting and filing sales tax returns
- Managing tax exemptions
Then, compare each suite and decide. In the end, your specific needs will help you make the best choice for your brand.
Whatever your choice is, using Avalara or TaxJar will show great benefits for your brand. It’s a sure step to boost your long-term success.
Author
Esteban Muñoz is an SEO copywriter at AMZ Advisers, with several years’ experience in digital marketing and e-commerce. Esteban and the AMZ Advisers team have been able to achieve incredible growth on the Amazon platform for their clients by optimizing and managing their accounts and creating in-depth content marketing strategies.
