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How to calculate sales tax
sales tax is hard to calculate for any online business that operates nationally or internationally, if you operate in a physical location, then you just use a tax rate calculator to find out your local rate and then charge it using your POS system.
But what about online stores?
A lot of complicated measures are taken into place for which you should charge sales tax or not, if you have nexus in a state then you should charge sales tax in that state, well what is nexus?
Nexus means assets in that particular state, like maybe, a warehouse, or employees and so on. It comes into play as well if you do a certain amount of sales volume in a certain state, then you are supposed to pay sales tax on that as well.
Well, in that case, it’s a little harder, but using software can help with that.
And the tool you need is called TaxJar.
Taxjar, which is owned by Stripe offers everything you need to solve all your sales tax problems. you shall no longer worry about forgetting to charge sales tax and then paying it out of your own pocket at the end of the tax year.
So here’s how it works, you connect your ERP or e-commerce platform like Shopify.
You state where you have economic nexus.
And you get your sales tax report, it’s that easy.
Their API has a sub-20ms response time, which are words that are technical and make me seem smart, those actually mean that all your customers are going to see accurate sales tax data every time they checkout.
Features:
The first feature is AutoFile, which automatically takes the sales tax report they generated and automatically file it on your behalf for your business
Tracking economic nexus is easy with Taxjar Nexus Insights, which is great, because nexus is an ever-changing subject, depending on your state. Which hinders any business owner’s ability to calculate sales tax.
Taxjar simplifies all of this in a great and minimal dashboard. The dashboard also warns you whenever you reach economic nexus in a state and tells you how to act accordingly and calculate sales tax for ecommerce.
TaxJar has some great integration options with your favorite shopping cart, ERPs, Accounting Software, and more, which makes it a must for businesses, big and small in need of help to calculate sales tax.
Their pricing starts at $19 per month which isn’t Expensive Compared to an accounting firm
And you can get TaxJar here.
