2020 Sales Tax Apps for Online Sellers | Avalara, Taxjar, and Taxify

hi online sellers how are you doing today hope you're all having a great day this is kasheen from ledger gurus and today i will share with you what i know about all the sales tax apps out there to help your business run better at the end of the video you'll know how these how each of these sales tax app works i will specifically cover avalera texture and taxify and you'll be able to decide which app works best for your business needs so before i dive in if you have not subscribed to our channel be sure to hit that subscribe button and hit the bell as well so you get notified every time we post a new video [Music] so here at ledger gurus most of our sales tax clients use a sales tax app and so day in and day out i'm in these apps i'm trying to figure out how to best use them to integrate them with our clients existing sales channels to help them calculate and collect and remit sales tax um so before we dive into all the nitty gritties of each of these sales tax apps i want to start by giving you a background on why is online sales tax so complicated and how can a sales tax app help so it is complicated because first of all all the states have their own rules and regulations they have their own rates they have their own tax structure and they have their own taxability metrics as well so one thing can be taxed in state a but it's not taxed in state b one thing is only tax subject to the state level tax but the other might be subject to state district city and county and sometimes they even have crime control and fire fire control and ambulance districts all these different taxes based on where you are collecting and remitting tax so because it's state administered and every state is very specific about how they structure their sales tax structure so that makes it complicated the second one the second reason that makes online sales tax collection and calculation such a challenge is because the rules are always changing the laws are always changing and the rates are always changing and as a business owner it's just really hard to keep updated with all these information that's constantly changing and third of all i know from my experience that a lot of clients come to us simply because online sales tax collection is just not what they want to focus their time on so with uh with the help of a sales tax app that can really save your time so the sales so the sales tax app can really help you first of all be accurate in your sales tax collection they are specialized in getting the correct database so they have the right rates depending on where the ship to address is in most cases and they will know based on that rate if they need to charge just based on that address if they just need to charge state level tax or if they need to drill down all the way to the district level so they're accurate second of all they keep updated with all the changing rules and regulations and rates and third of all they guarantee timely fighting so in all these programs that i'm gonna be talking about in the next 10 10 to 15 minutes they all guarantee timely fighting as long as you approve and reconcile the return by a certain date of the month and then last of all a lot of these sales tax ads are have integrations with your existing sales channel with your existing quickbooks online account so your journal entry and your sales data can all go into one place and this integration of data makes accounting really easy so let's take a short break and i just have one quick question for you guys if you don't mind answering in the comment for me i know sales tax is so frustrating and it can be so stressful please comment and tell me what is the one thing that stresses you out most about sales tax for me is to have to constantly keep updated with the new rules and laws and regulations and rate changes so that's why i spent most of my time reading about these regulations and see how they can how they apply and change the things we're doing for our clients so let me know what stresses you out most and maybe there's something we can help you with so now let's talk about the three sales tax software that i want to discuss today so we're going to talk about avalera texture and taxify because most of our because all of our clients that use a sales tax program use one of the three programs and before i go into the detail of each of these programs i just want to quickly give you a background on the difference between a sales tax engine and a sales tax fighting tool so the sales tax engine is what powers the calculation of how much tax a customer needs to pay when they do when they places an order online so it's usually connected to your shop to your sales platform so for example shop if you're selling on shopify shopify has its own in-house sales tax engine meaning shopify has a database that they pull all the rates from when a customer enters like shipped to address then they go to their in-house database and pull out the rates and tells you this is how much this customer needs to pay for sales tax wise shopify also has an exclusive partnership with avalera so if you don't want to use shopify's in-house sales tax engine you can use avalaras which is called avatax so avatax can act on behalf of shopify sales tax engine so it'll pull a valeris database when the customer enters it's shipped to address so the sales tax engine really powers the calculation of how much taxes do when someone makes a purchase and then the other side is sales tax filing which can be the same tool or you can use different tools so the sales tax filing tool is the tool that summarizes all the data and reports it to the state so we're going to talk about apps that well the specific the specific three apps avalera textify and texture as an engine what the integrations are what the user experience have been using them as the sales tax engine and then we'll talk about using them as a fighting tool what are our experiences with that we'll talk about their certificate management capacities because i know lots of online sellers if you sell to wholesalers if you sell to exam entities you collect all these exemption certificates that needs to be stored on the cloud as well so we'll talk about that and then at the end i'll just give you um i'll give i'll let you know um about the price range of each of these softwares um i do want to add one caveat that this all of these information i'm sharing is current as of today and with technology with software it's constantly changing so it probably won't be relative in another six months so maybe by then we'll do like a 2021 sales tax app review at that point but just so you guys know this is what we know the most at this point about these three sales tax self-worth okay so we're going to start with avalera so avolera is the biggest sales sales tax software out there it's a public company it is it provides a very comprehensive solution to all your sales and use tax needs they have a product called avitax for sales tax they also have a separate products for use tax another product for access tax another product for vat tax and they have a certificate management tool as well so anything you can think of whether you're selling in the u.s or you're selling internationally avalera can be your one-stop shop it should cover all your sales tax needs so avalera as a sales tax engine is awesome they have hands down the best database for sales tax rates to pull the most accurate data uh for where like how you should be taxed because evalera has the gps map down to the house number level because sometimes even you're just neighbors across from the same street you might be taxed a different tax rate and evalera is that specific so you can know for sure you're getting the a great really accurate um rate with avalara acting as your engine and i've mentioned this before but evelyr has an exclusive partnership with shopify and so you can't really use taxify to calculate text for you on your shopify store you can't use texture or any other you have to either do your in-house in shopify or you do have a tax and i think of attacks last time i talked to uh shopify support avatax is about 300 a month to add on to your current um shopify subscription cost and if it's if you are a shopify plus user then you can either get a discount or you can lump a valerian of attacks into your current fee structure so um avalara also integrates with lots of other um other marketplaces like bigcommerce and woocommerce they have great and great integrations with avalara that evelar will just act as the sales tax engine for those marketplace facilitators but they do not and they cannot act as the sales tax engine for amazon or ebay or etsy we've seen that we've tried but it just doesn't work because amazon uses vertex as its sales tax engine and for ebay you have to enter in what you want to be taxed in each state manually ebay needs to be a topic for an entirely other day so we can talk through how you can set up ebay so um and it integrates with a lot of the erp system integrates with quickbooks integrates with netsuite so if that's how you invoice your customers and you need a sales tax line on your invoice you can connect avalera to those as well and avalara will pull the rates for you so you are charging your customer the correct sales tax rate a blur as a fighting tool is very powerful as well so every month you schedule the returns that you want leveler to file for you you have to approve them by the 10th and if you don't mark them approved by the 10th avalara will mark them approved by the 11th to guarantee timely fighting because most states have the 20th as their deadline and if you use avalare as a fighting tool using their avalari returns product you have to map your product to avalara's product code you have to enter in all the exempt customers with their valid exemption certificate you have to tell them all the locations not just where you're selling but also your home offices your warehouses all these different locations so they can do sourcing correctly and then and then you schedule the return so it's it's a very comprehensive process but at the end of it you are getting a great and very accurate return filed on time by avalara uh when you are finding these returns when you're improving these returns you also have the less flexibility of adding or deleting transactions that if if a transaction needs to be in there but it's not there you can add those and vice versa so you can make adjustments in your um avalare account as well so that's of attacks um our clients that are using avitax and avalar filings returns they are very happy we still do a reconciliation process but we don't see much of a discrepancy at all um and they do have a certificate management tool which is kind of integrated with their returns portion because if you want to mark an a customer exempt you have to enter a valid exemption sort of certificate so that's how they keep track of it so um they do charge a fighting fee i think it's 18 a fighting fee on top of however the subscription cost is which is a volume based charge so if you have lots of transactions then and you use avalar to calculate tax on each of those transactions it just goes higher the more transactions you have and you can't find pricing on avalara's website because every single contract they have is um a custom contract so you'll need to contact their salesperson and give them all your company's information and they'll give you a customized pricing um it's usually in the thousands from my experience okay so that's about avaler and then let's talk about texture texture is one of these new companies that's in the sales tax arena and i think it's a really great company they are based in colorado all of their employees are working remotely just like like my company like ledger gurus and they have like once in a quarter they have all hands on like we do that too and it's just i think it's so incredible um when companies can can do things like this they can like have all their remote employees and still have such a strong culture so i really like i like techstar i think it's i think it's a great company but when it comes to them as a sales tax app i do have um i guess i have pros and cons when when i think of when i think of texture so let's talk about texture as a sales tax engine i see this used most often when our customer uses their own website we use a custom website so they are not selling on shopify they're not selling on magento they're not selling on amazon but they have their own customized website that they sell from and so they don't really have a table of tax rates they can pull from every time someone places an order so then they would use a tax jar as an api to pull tax source rates because um and texture i've heard from our current clients that are integrated with texture that it's really easy to use their api to add to your current website so um so i i've seen that the most except that one i don't see a lot of e-commerce businesses using tax using texture as their um finding as their sales tax engine but to go along with that it is actually really important that you use tax jar as your filing engine if you can if you decide to use tax jar for filing as well because the probably my biggest concern with techstar is you cannot make any adjustments to the returns texture produces you have to file what tax jar calculates so even if you collect it more or collected less you have to go with what tech start calculates so if you use a different sales tax engine than tax jar so it might calculate a different amount than what texture calculates on your return then that creates a discrepancy but if you're using texture both as the sales tax engine and as the finding tool then that discrepancy can be very small you just need to make sure when you set up the integration between text star and your sales channel make sure you are sending all the information send the street address as well don't just send the city and the zip code and the state send the full address and then when you use text start to file use all the same information too so it can give you the most accurate um results um there's there are like a few restrictions about tax jar um things like it doesn't support local jurisdiction filings so like home road cities in colorado or parishes in louisiana it does not file for those and if you're a remote seller in missouri it does not file from missouri if you have a used account use tax account as well as a sales tax account in michigan it does not file for michigan so there's just restrictions on what type of filing tax jar supports and if you have a back filing like if you realize oh i should have filed and i missed it can you generate a backfiling for me techstar also doesn't support that so if you are a business that's just starting and you don't have super complicated issues like if you don't have too many exempt customers or exempt properties sorry products and you don't need to backfile you don't need to file in local jurisdictions it's it's great to use texture i'm i like our company fully supports texture and um it's been a great solution for some of our clients so the last one i want to talk about is taxify i know all these all these companies names start to mix up um but taxify is what most of our clients are on i would say over 50 percent of our clients are on taxified because i feel like taxify is a good middle ground between avalara and texture it's not it's not as comprehensive and robust as a valera but it's also it covers sorry excuse me it covers way more and it does way more than texture so let's talk about taxify as a sales tax engine taxify is very much like avolera and tagstar so if you have like obviously shopify you don't have the option to use textify but for a lot of other companies that have an open api connection you can use text device database as well um so so that's pretty similar to tagstar and you can also connect textify to quickbooks and to other erp systems the funny thing is you you can also um because i guess we've seen clients moving from texture to text advice so text if i even have an integration to help move your data from texture to textify so it's just interesting but um what we like most about taxify is using them as a finding tool because they are very flexible you can do a lot of adjustments to make sure the data that tax if i ends up fighting to the state is what matches your books and what makes most sense to you similar to avalera you can delete transactions you can upload transactions you can mark certain transactions as exempt you can upload refunds like all of these are very flexible and it's very user friendly and the best part is if you're ever confused on how to use this unlike avalara and texture which you can only either create a case with evalera and it might take them 48 hours to get back to you via email or you message text or support you email text or support and it takes them 48 to 72 hours to get back to you with taxify you can just call them and there's a support team that answers the call every time i never i i can always get a hold of someone whenever i have questions so best similar to valera and tech star taxi 5's that finding deadline is the 12th so you mark everything approved by the 12th and then tax supply will take it from there tax jars deadline is the sixth of last deadline is the 10th and text device deadline is the 12th which we like it better too just because it gives us more days to reconcile all the data cost wise i know i talked about evolura because everything's a customized pricing so i can't really share with you what our clients are getting charged but i can tell you that you can find pricing for a tax jar and taxify on their website for tax jar they start at 19.99 for the lowest level if you don't have that many transactions it's just 20 bucks a month and then every filing you have them file for you instead of you going in the website to type in all the numbers if they file it for you then it's i think it's 25 every time and you can find this on their website and then with taxify i think it starts in the mid 40s for your subscription fee so a subscription fee is pretty much to either use it as a finding tool or use it as um engine or you can do both like it's all included in a package so it's in the mid 40s just at the starting level and every fighting is 27 so i would think textify and texture are pretty comparable so it just depends on what your needs are if you are just starting if everything is pretty straightforward i think both would work if you have a little bit more complicated transactions and situations but you don't want to pay thousands of dollars a year then i think taxify would be great if you have um a need for certificate management or for taxability issues or if you want everything tracked down to the side to the level that they can distinguish whether you're on this side of the street or the other side of the street um if you need that comprehensive robust system i think avaler is an awesome tool for you so just depending on what what you need and if you have any questions about what i just said feel free to reach out to us um you can comment in the video or you can directly reach out to us at ledgergroups.com also if you um if your annual revenue is reaching a million dollars then this is like the perfect spot for us to offer you our help um with e-commerce accounting with sales tax um so just feel free to contact us and we'll start you on the right track if you liked this if you like this video please like please hit that like button and share it comment share it with your ecommerce friends let them know about evalua jar and taxify and in our description we also have a pdf document that's titled 10 steps to make sure sales tax doesn't burn down in your business um so check that out i also just did a video on how to set up shopify tech settings so your shopify stores are collecting tags correctly there's actually more things that you thought you would need to set up to make sure that happens so check out that video as well and please subscribe to our channel so every time we come up with new videos you'll be notified um that's it again feel free to let us know if you have any questions or any comments any feedbacks about these three different softwares i'd love to hear what you think as well thank you so much and have a great day bye

Channel: LedgerGurus

Views: 14,159

Keywords: sales tax apps for online sellers, sales tax, internet sales tax, taxify sales tax, taxify vs taxjar, taxjar amazon fba, taxjar shopify, taxjar review, avalara sales tax, ecommerce sales tax, shopify sales tax, amazon sales tax, online sales tax, how to file sales tax, amazon fba sales tax, ecommerce sales tax shopify, sales tax for amazon sellers, amazon seller central reports, shopify sales tax setup, ecommerce accounting, sales tax shopify, ecommerce taxes, ledgergurus

Id: 1L7s6llWlRo

Length: 26min 4sec (1564 seconds)

Published: Mon Aug 31 2020