A Look at Three Sales Tax Management Services: AvaTax, Sales Tax SaaS CORE, TaxCloud

May 28, 2013 | By

As a small or mid-size online retailer, if you’ve ever considered a sales tax management service, you’ll find several out there that claim they can make this task easier. And if the Marketplace Fairness Act eventually becomes law, the number will grow exponentially. For now, we’ll look at three of the services that tend to bubble to the top.

AvaTax, TaxCloud and Sales Tax SaaS CORE are real-time automated sales tax calculation services which can be integrated with most companies’ financial, e-commerce systems or order management systems. They all utilize open Web Services APIs. They all include tools for reporting, management and audit defense. They all claim ease of integration and simplified management tools.

AvaTax by Avalara

It’s comprised of three separate web-based services: AvaTax Calc, AvaTax Certs, AvaTax Returns.

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  • Shopping Cart Integration: Integrates with 100+ ERP, Order Management Systems, financial applications, point-of-sale and e-commerce systems. Also, its SDK enables integration with custom applications.
  • Real-time access to Rates/Rules/addresses: Dynamically delivers taxability rules and applies them at jurisdiction’s rate at the point of transaction. Validates and corrects addresses – including ZIP code +4.
  • Indemnification from liability: Avalara is a certified Streamlined Sales Tax (SST) compliance service provider for the 24 participating states of the Streamline Sales and Use Tax Agreement (SSUTA). In each of these states, Avalara users are indemnified from liability in the event of an error.
  • Ensures Certificates and Filings are Timely: Valid certificates are on hand immediately through electronic collection, storage and management. Simplifies all payments to a single ACH transfer to a secured account—AvaTax Returns takes care of individual payments to each entity.
  • Pricing: Subscription-based, scalable to meet the needs of customers of all sizes.

Sales Tax SaaS CORE by CCH (previously called SpeedTax)

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  • Shopping Cart Integration: Open web services API gives programmers ability to integrate the service into almost any system.
  • Real-time Address Validation and Jurisdiction Mapping: Verifies that each address is valid and determines correct jurisdiction and rate. Sales tax calculations are added directly into the order.
  • Taxability Mapping: Access to taxability tables, a comprehensive list of product codes for every industry.
  • Nexus Management: Retailer controls which states and local jurisdictions from which they want to collect sales tax.
  • Management Reporting: Real-time reports from summary or detail on transactions going back seven years.
  • Pricing: Sales Tax pricing is transaction based.

TaxCloud by FedTax

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  • Shopping Cart Integration: Operates on a real-time web services API. API ID and Key gain access to the service.
  • Calculates Sales Tax in Real Time: Each item being purchased has a Taxability Information Code, which is checked against the buyer’s location to determine whether the item is taxable and, if so, at what rate. Monitors and updates any changes to tax rates and tax holidays for all 45 states that have sales tax.
  • PCI Compliant: Operates only under SSL protocol. Issues unique IDs and secure keys for every store website. It does not store any customers’ data.
  • Indemnification from liability: TaxCloud is a Certified Service Provider for the 24 states in the Streamlined Sales and Use Tax Agreement (SSUTA). In each of these states, TaxCloud users are indemnified from liability in the event of an error.
  • Reporting and Financial Management: Automatically files sales tax returns for 24 states. Prepares monthly state-by-state reports and manages sales tax exemption certificates.
  • Pricing: Free to retailers. No set-up or transaction fees. When TaxCloud transfers sales tax funds from a retailer to a state, the state pays them a commission.

Have you considered or do you use any of these sales tax management services? If so, we’d love for you to share your comments. What do you like or dislike about any of the three services above? Did you find anything missing from their service that was important for your tax management? Did you feel the costs were reasonable? Did the product deliver what you needed to manage sales tax? Have you found their sales team to be forthcoming on features/benefits and pricing? Was there another service that you’ve found to better fit your needs? If so, why? Comment and let us know.

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Tony is working on new client relationships and the expansion of present accounts.

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