Best Sales Tax Software For Small Businesses

Looking for the best sales tax software can take time and effort for small business owners. You have to consider a range of features, ensure the software is compatible with your existing systems, and find something that fits your budget. 

This all needs to be done while keeping up with changes in tax laws. The ideal choice can make managing your business easier, saving time, and preventing costly tax-related mistakes. The question is, how do you identify the best automated sales tax solution for your needs?

We’ll discuss the best sales tax software options below, along with other things worth knowing about sales tax solutions.

Top 5 Sales Tax Software Options for Small Businesses

You're in the market for the best sales tax software, and knowing how they stack up against each other is essential. We’ll explore the standout features, usability, and cost-effectiveness of the top contenders.

You'll also get insights from expert opinions and user reviews to ensure you make an informed decision that suits your small business's unique needs.

When evaluating sales tax software, the top contenders are Avalara, TaxJar, Zamp, Numeral, and Anrok. Let’s examine each one individually.

Zamp

Zamp has a distinct approach to pricing, offering a clear, single rate without hidden fees or surprises. This straightforward pricing model is complemented by integration features with multiple e-commerce platforms, like Amazon, Shopify, and other marketplaces, simplifying the tax compliance process for businesses operating across multiple sales channels.

Zamp is known for its precision in collecting sales tax, guiding businesses on where they need to collect sales tax, and registering them in all necessary states. This software also provides state-specific sales tax reports and filing. Onboarding is designed to be quick and personalized, reducing the time it takes to get up and running.

Unlike Avalara and TaxJar, Zamp has an in-house customer support team that’s available by phone or contact form (and we actually answer!). With responsive support, Zamp is well-positioned as a hassle-free solution to sales tax compliance.

Expert Opinions on Zamp

While Zamp offers compelling features for small businesses, it's essential to consider what industry experts and existing users say about their experiences.

Avalara

Avalara is a provider of cloud-based tax compliance solutions, focusing on automating the processes of sales and use tax calculation, filing, and remittance for businesses operating across multiple jurisdictions. The Avalara Avatax software is designed to integrate with a variety of business systems and manage tasks such as tax rate determination, exemption certificate management, and sales tax return preparation. While it offers features like a user-friendly interface, Avalara falls short when considering both pricing and support. 

Read our in-depth comparison: https://zamp.com/zamp-vs-avalara/

TaxJar

Following Avalara, TaxJar emerges as another player in the cloud-based tax compliance software landscape, focusing its offerings on e-commerce businesses. TaxJar helps business owners manage sales tax by automating state and local tax calculations, reporting, and filings. The software integrates with a variety of e-commerce platforms and payment processors and aims to simplify the monthly reporting process.

 TaxJar lacks phone-based customer support, offering assistance solely through a contact form submission. This setup may not be ideal for business owners requiring immediate resolution of issues.

Read our in-depth comparison: https://zamp.com/zamp-vs-taxjar/

Numeral

Compared to TaxJar and Avalara, Numeral is a newcomer to the game and claims it specializes in sales tax management for SaaS and e-commerce businesses. The company offers sales monitoring, economic nexus tracking, state registrations, sales tax collection, and monthly, quarterly, and annual remittances. 

Numeral’s website does not discuss any type of plan offerings — stating that it charges $75 per filing and $150 per state for registrations. This pricing model may not be ideal for companies operating across multiple states or platforms.

Anrok

Rounding out our list is Anrok, a sales tax compliance company targeting SaaS and e-commerce businesses. The company handles US sales taxes in addition to VAT and GST. Anrok offers nexus monitoring, registrations, automated sales tax calculation, filing, and remittance. Depending on the plan you choose, integrations like QuickBooks online, NetSuite, and Salesforce are available.

What Is Sales Tax Software?

Sales tax software solutions are created to help small businesses charge, collect, report, and submit sales tax. This type of software automates the calculation of the correct amount of sales tax to charge on goods or services based on customers' and businesses' locations.

How Does Sales Tax Software Work?

Sales tax software is meant to simplify and automate managing sales tax data. It typically works by:

• Integrating with software. The best sales tax software connects to a company’s sales systems, like Shopify or Stripe, or bookkeeping software and accesses the required state tax information automatically.
• Determining product taxability. Every product or service is taxed differently. Sales tax software should identify which items are taxable and at what rate. This is especially important for businesses that sell a variety of goods and services or sell on multiple platforms.
• Automatic and location-based calculation. Sales tax software should automatically calculate sales tax rates by state and tax jurisdictions. It should use the customer’s delivery or billing address to determine the exact tax rate that applies to each sale.
• Reporting and state filing. The best software for small businesses compiles and calculates the total sales tax that the business owes for each tax period.
• Updates and compliance. It’s no secret that tax laws and rates change frequently. Sales tax providers automatically update their systems to reflect these changes, allowing businesses to stay compliant without needing to worry about changing laws from tax authorities themselves.
• In-house tax professionals. While the software is important, having tax professionals who can maintain it and work with you is just as vital. One of the best companies for small businesses that offers hands-off onboarding is Zamp. We configure your client account to save you time and ensure that everything is done right from start to finish.

Why Is Sales Tax Software Important for Small Businesses?

As a small business owner, sales tax software can be a vital asset for your business. Why? Because it manages the entire sales tax lifecycle for you — handling tax compliance, reducing the risk of errors, and scaling with you as your business grows.

Here are further benefits of implementing sales tax software for your small business:

Benefits of Using Sales Tax Software for Small Businesses

Having sales tax software for your small business can have a big impact. The benefits include:

How to Choose a Sales Tax Software for Your Small Business

As a small business owner, there’s a lot at stake when you choose sales tax software for your business. Here are some things to think about as you’re choosing a sales tax solution:

1. The needs of your business

There are several things to consider about your business needs, including:

• Your volume of sales: Consider how many transactions you’re processing daily. Your sales volume can directly impact the type of sales tax software you’ll need.
• Transaction variety: What are the types of transactions you handle? Do you have a lot of products with different taxability rules? If you offer a range of products, you’ll want sales tax software that can handle and process correct taxability.
• Your current tax situation: Is your current tax situation working? Or are you spending a lot of time handling it manually? Understanding your situation can help guide you as you develop a strategy for what you need.
• Multi-state operations: Businesses that operate in multiple states should consider getting software that is capable of handling different tax laws across states and local jurisdictions.
• Scalability: When thinking about sales tax software, you want to think about your current and future needs. Look for a solution that can grow and evolve with your business.
• Long term support: You don’t want to purchase sales tax automation software that doesn’t offer long term support. There are several newer tax companies that do not place an emphasis on customer service. It’s always important to read reviews and do research before choosing a solution.

2. Research sales tax software solutions

After you’ve assessed your business needs, you’ll want to start researching what solutions may work well for your business needs. Some key features to look for are:

• Accurate sales tax calculations: Whatever software you choose, you want to ensure it will accurately calculate sales tax rates across all jurisdictions and stay current with tax laws and rates.
• Integration capabilities: Find a solution that easily integrates with your existing business systems and constantly expands integration opportunities.
• Ease of use: Search for compliance software that has an easy-to-use interface that helps you find what you need quickly and efficiently.
• Customer support: Look for a sales tax software solution that offers strong customer support who will answer any questions you have as you navigate sales tax.

3. Scalability with your business

As your business grows, you want software that can grow and adapt to it. Be on the lookout for:

• Software that is capable of scaling with your business growth: Any software you choose should be able to handle increased transaction volume as your business grows. You’ll also want to ensure it can scale into new geographic areas, whether more states or internationally. Look for software that offers multiple tiers or plans so you can upgrade as your business changes.
• Flexibility: Laws surrounding tax are constantly changing. You want to ensure whatever sales tax solution you get will adapt to changes. How has the software responded to changes? Does it have a good record of staying up to date with legislative changes? You want to consider these things on top of asking for reviews and references.
• New features and services: As your business scales, you may need more features. Look for a sales tax solution that offers a range of add-ons or integrations.

Sales Tax Software for Small Businesses: Conclusion

Having explored the various benefits of sales tax software, it's clear that picking the right system is key to maintaining compliance and streamlining tax operations for your small business.

Before making a commitment, scrutinize your options to ensure the sales tax software you choose aligns perfectly with your small business needs. Take your time to compare features, ease of use, and customer support. Look for reviews from businesses similar to yours and consider how their experiences can inform your decision. 

Find the solution that resonates with your unique situation, and you'll set your business up for smoother sailing ahead.