Staying compliant with complex sales tax laws is challenging for ecommerce businesses. With over 12,000 tax jurisdictions across the US, constantly changing regulations, tricky nexus rules, and the explosion of online selling—it’s easy to make mistakes. However, non-compliance can lead to audits, fines, lawsuits, and even jail time in extreme cases.
That’s why implementing automated sales tax software is critical. The right solution can accurately calculate rates in real-time, integrate with shopping carts, file returns, and remit tax payments. This eliminates compliance headaches so you can focus on growing your online business.
In this comprehensive guide, we’ll explain everything you need to know about ecommerce sales tax compliance and review 10 top software tools to automate the process.
Why Sales Tax Compliance Matters
As an ecommerce seller, you are responsible for collecting, filing, and remitting sales tax in states where your business has established nexus. This includes both physical and economic nexus determined by things like:
- Having inventory or employees in a state
- Number of transactions or sales volume
- Affiliate relationships
Once nexus is established, you must register with tax authorities, integrate sales tax calculations into your checkout process, file regular returns detailing taxes collected and owed, and remit payments to each state.
This intricacy is why automation is so important. Sales tax software can handle everything from accurate calculations to filing and remittance. It also helps avoid issues like:
- Incorrect rates – leading to lawsuits or audits
- Missed deadlines – resulting in penalties and interest
- Reporting errors – causing payment mismatches
Set yourself up for compliance success starting day one. The software options below make it painless.
Top 10 Sales Tax Compliance Software Solutions
1. TaxJar
TaxJar is one of the most popular automated sales tax solutions. Over 20,000 businesses trust TaxJar for end-to-end compliance. Core features include:
- Real-time rate calculations for accurate checkout totals
- Automated sales tax reports for filing in every state
- Direct API connections to shopping carts and marketplaces
- Registration management for rolling out to new states
- Support for economic nexus thresholds and origin-based sourcing
- Retailer tools like exemption certificate management
Ideal for medium-sized ecommerce sellers, TaxJar offers a free 30-day trial. Paid plans start at $19/month.
2. Vertex Small Business Sales Tax
Trusted by over 4,000 global businesses, Vertex makes staying tax compliant easy. The small business sales tax solution is packed with features:
- Integrates with popular ecommerce platforms
- Automatically calculates local/district taxes
- Manages customer exemption certificates
- Updates rates whenever governments change them
- Prepares and files returns on your behalf
- Remits tax payments per state requirements
Vertex SMB plans start at $22 per month with volume discounts available. Sign up for a custom quote.
3. Avalara AvaTax
Avalara is the industry leader in automated sales tax solutions. AvaTax offers real-time calculations, returns, and remittances for all tax types.
With AvaTax you can:
- Seamlessly integrate tax calculations into your shopping cart
- Automatically update rates whenever regulations change
- Reduce audit risk with guaranteed accuracy
- File returns and remit payments by every deadline
- Support global expansion into new countries
- Manage tax exemptions and certifications
- Access robust reporting for visibility
Avalara offers a 60-day free trial followed by customized pricing. Plans start around $20/month.
4. Zoho TaxAssist
Zoho TaxAssist makes sales tax compliance affordable for small ecommerce businesses. Features include:
- Automatic rate calculation integrated with Zoho Inventory
- Date-based reporting on taxes collected
- Tools for managing exemptions
- Easy registration management
- Digital archival of all tax documents
- Reminder alerts for deadlines
- Support for drop shipping taxes
- International tax compliance for global sales
TaxAssist has a free version. The standard plan starts at $9 per organization per month.
5. TaxCloud
Designed exclusively for ecommerce, TaxCloud fully automates compliance:
- Integrates with every major shopping cart
- Applies real-time tax calculations at checkout
- Manages registrations and renewals
- Provides pre-filled sales tax reports
- Guarantees easy multi-state filing
- Offers streamlined sales tax discounts
- Remits taxes on your behalf
Rated highly for customer support, TaxCloud offers custom pricing starting around $20 per month.
6. SalesTax HandBook
SalesTax HandBook focuses solely on accurate rate calculations. Core features:
- Real-time address lookups for exact rates
- Rules for proper sourcing and thresholds
- Retailer tools like zip+4 exemptions
- International calculations for VAT & GST
- Batch upload for bulk product catalogs
- Simple API connectivity to POS systems
With a full freemium model, SalesTax HandBook is great for startups. Paid subscriptions cost $15/month.
7. AccurateTax
AccurateTax delivers affordable automation under the NetBlazon brand. Solutions include:
- Real-time sales and use tax calculations
- Address scrubbing for proper sourcing
- Streamlined sales tax registration
- Transaction-level reporting
- Certified integrations for shopping carts
- Sales volume capabilities for enterprise
AccurateTax offers net 30 contracts, making it cash-flow friendly. Custom pricing applies.
8. Quaderno
Quaderno focuses on multi-channel global tax compliance. Features include:
- Automated calculations in 200+ countries
- Multi-language invoices
- Real-time currency conversion
- VAT compliant reporting
- Tax ID validation tools
- Marketplace integrations like Amazon and Etsy
- Drop shipping support
International ecommerce sellers benefit most from Quaderno. Subscription plans start at $49/month.
9. CCH SureTax
Wolters Kluwer‘s CCH provides professional-grade automation:
- Address sourcing, thresholds, origin rules
- Product taxability rules engine
- Automatic rate calculation tied to CRM data
- Digital tools to manage exemptions
- Dashboards, audit support, and transparency
- Managed compliance services
Ideal for mid-market B2B/B2C hybrid models selling $15M+ annually.
10. Thomson Reuters ONESOURCE
Thomson Reuters ONESOURCE offers enterprise-level solutions:
- Real-time calculation and exemptions
- Registration management
- Returns, payments, notices
- Audit defense
- Supply chain analysis
- International transaction support
- Tax data analytics for insight
ONESOURCE works best for complex global businesses with large compliance needs and budgets.
Choosing the Right Software
With many options available, focus on core business needs around compliance to determine what‘s best for your situation.
For small ecommerce sellers, TaxJar, Avalara, TaxCloud, Zoho, and AccurateTax offer great automation capabilities without breaking the bank. Medium sellers should evaluate features like marketplace selling support, international compliance, and managed services in tools like Vertex, ONESOURCE, and Quaderno.
No matter what stage you are at, implementing sales tax software early simplifies expansion down the road. Determine functionality priorities, then select a long-term platform partner to meet both current and future needs around compliance.
In Closing
Sales tax compliance should be automatic. Eliminate headaches, manual work, and mistakes with ecommerce-ready software purpose built to handle the complexity for you. Integrate a solution now to reduce audit risk, avoid fines, save time, and confidently grow revenue knowing you are protected on compliance.
