Are you selling on Amazon? Then this guide is for all the sellers who want to know about the best sales tax automation tools out there.
While running an e-commerce business – right from managing your inventory, to running PPC campaigns effectively, from fulfilling orders to handling your customers, there are a lot of things happening all the time. Amazon, on the other hand, has simplified most of these tasks by handling them itself, mainly through FBA. This retail giant also collects tax on behalf of a seller. However, it’s up to the seller to determine which tax is to be collected.
Whether you sell online or at a brick and mortar, sales tax is a part of your life. We know, most of you hate this part of your business. But it’s equally important. As the sales tax laws subject to change, it can be difficult for the sellers to keep up with several factors involved while filing taxes. Sellers need to make themselves familiar with the sales tax policies in the state/country they are residing as well as the tax policies of the state/country they are selling/owning the business.
Giving away a chunk of the hard-earned money can never be fun, especially for solo entrepreneurs who take care of everything by themselves. There are a bunch of Amazon sales tax tools for sellers who want to keep track of their sales tax amount and automate your tax returns based on your Amazon seller central account.
When it comes to finding the Amazon sales tax software, you’ve got tons of options. However, you need to find the right one that is reliable and the one that automates most of your tasks. So, in our article, we are going to give you the top 5 Amazon seller tax software options available in the market based on the other sellers’ experiences.
If you are selling on Amazon FBA and wants to automate your tax filing, then TaxJar is one of the best available options. They allow you to sync your Amazon account directly with the software. The tool keeps track of what sales tax you owe to each state and helps you to file taxes for the selected state automatically.
TaxJar is pretty straightforward and saves your time. Often, different states have different tax filing processes, and it can be challenging to keep track of the required timelines. With Taxjar, you can automatically file sales taxes for various states.
Along with Amazon, TaxJar supports a variety of e-commerce platforms, including eBay, Shopify, Stripe, PayPal, etc. Even if TaxJar does not support the platform you are selling, you can export sales data in a CSV file.
They offer a basic package starting from $19 per month which allows you to do multichannel data aggregation, data import from any three eCommerce platforms like Amazon and Shopify, basic email and chat support, etc. They offer more premium solutions depending on the size and requirements of the business. However, the basic package works for beginners.
Avalara is a tax compliance software that allows you to calculate your taxes and makes it easy for you to file tax returns. Avalara also offers manual services where the team submits your tax returns on your behalf. All you need to do is to pay some extra amount to get them checked by the team.
Their solutions include:
- Goods and Services tax
- Communications tax
- Value-added-tax (VAT)
- Sales and use tax
- Excise tax
- Lodging tax
Sellers across several e-commerce platforms use Avalara. You can use this tool for document management, returns preparation, tax calculation, and more. If you are looking to simplify your tax filing and returns, Avalara is an excellent option as Amazon sales tax software. You can use Avalara for any Amazon marketplace. Also, it is compatible with other e-commerce platforms like Etsy, Walmart, and eBay too.
VAT or Value Added Tax is something you need to file if you are selling in countries like the UK, France, Germany, or Spain. SimplyVAT is an Amazon tax management software that manages VAT compliance solutions for the companies who want to scale globally.
Here’s a list of countries that SimplyVAT serves currently:
If you are an online seller with customers across EU countries, then you need to register and comply with VAT. SimplyVAT makes it easy for you to calculate how much VAT you owe on each invoice and in total. The rates may vary depending on the country and sometimes for the products within a country. SimplyVAT saves your time, and you can hardly notice these things. With the number of constraints out there, Amazon sellers can find SimplyVAT extremely useful.
SimplyVAT is a good investment if you are a new seller with a tight budget. On the whole, it allows you to run your business and cash flow effectively.
4. Taxify (Sovos)
Taxify is a sales tax automation software for online sellers and e-commerce businesses. You can find ready-to-sign and ready-to-print forms to file taxes effortlessly. They support integration with accounting software, point of sale systems, shopping carts, marketplaces, and much more.
Taxify is managed through a web portal, but they offer a plugin for Amazon, which allows the sellers to get the transactional data.
In a way, Taxify is similar to TaxJar, it allows you to collect the appropriate sales tax for each order, and you can automatically file your tax returns, no input is required. They offer three different packages with starter, standard, and premium plans ranging from $47/month to $247/month.
On the whole, Taxify is an excellent choice for Amazon tax management as it provides quality automation, value, and has high scalability too.
The last tax software in the list – A2X Accounting. This sales tax tool will not file your taxes automatically; however, it helps you to track your Amazon transactions. You’ll be able to get all the required information like sales tax and fees, accounting details, and others with the help of this tool. A2X allows you to work with Xero and Quickbooks to file your tax returns.
For Amazon sellers, A2X offers prices ranging from $19/month to $139/month depending on the size of your business and sales volume. A2X is a viable option if you are using accounting tools like Xero and want to keep track of the taxes you owe across different states and countries.
Tax is a major headache for most of the sellers. But if you are armed with the basics, other things can be simplified. Keeping track of taxes, customs duty, and other items can be daunting if you’re managing by yourself. There are high chances of human error when you are loaded with too many things. There are plenty of tax management tools out there to do these tasks for you. You need to automate tasks like tax filing to concentrate on the other aspects of your business, like product marketing and listings.
Arishekar N has over five years web development experience and is the senior digital marketing strategies at SellerApp, Specialist in SEO, SEM and best conversion rate optimisation strategies that deliver industry leading ROI. Arishekar has helped companies through more effective search engine marketing and SEO strategies. He is most passionate about working with e-commerce companies.