TaxJar vs. Avalara: Choosing the Best Sales Tax Solution with Technofog

Navigating sales tax compliance is a critical challenge for businesses, especially in eCommerce, where regulations vary across jurisdictions. At Technofog, we specialize in implementing sales tax automation solutions like TaxJar and Avalara to streamline compliance and reduce administrative burdens. As certified consultants, we help businesses select and integrate the right platform for their needs. This article compares TaxJar and Avalara, highlighting their features, strengths, and how Technofog can optimize them for your business.

Overview of TaxJar and Avalara

TaxJar: Simple and eCommerce-Focused

TaxJar, founded in 2013 and acquired by Stripe in 2021, is a cloud-based sales tax automation platform designed for eCommerce businesses and SMBs. It simplifies tax calculations, reporting, and filing, with a user-friendly interface and integrations for platforms like Shopify, Amazon, and WooCommerce. TaxJar is ideal for businesses seeking cost-effective, straightforward compliance solutions.

Avalara: Comprehensive and Enterprise-Grade

Avalara, established in 2004 and acquired by Vista Equity Partners in 2022, offers AvaTax, a scalable sales tax solution for businesses of all sizes. It supports complex tax scenarios, including international compliance, and integrates with over 1,200 systems, including ERPs, CRMs, and eCommerce platforms. Avalara is suited for businesses with intricate tax needs or global operations.

Key Comparisons

1. Features and Functionality

• TaxJar: Focuses on automating sales tax calculations, nexus tracking, and filing across 11,000 U.S. jurisdictions. Its AutoFile feature automates tax return submissions in select states for an additional $25 per filing. TaxJar excels in multi-channel eCommerce with real-time tax calculations and consolidated reporting.

• Avalara: Offers advanced features like sales tax calculations, exemption certificate management, and global tax compliance (VAT, GST). AvaTax supports 12,000 jurisdictions and provides detailed transaction analysis, business license services, and international tax support. It’s built into Shopify Plus for seamless eCommerce integration.

Winner: Avalara for its broader feature set and international capabilities; TaxJar for simplicity and eCommerce focus.

2. Ease of Use

• TaxJar: Known for its intuitive dashboard and quick setup, TaxJar is accessible to non-accountants. It offers prompts to connect eCommerce platforms and provides clear nexus tracking, making it ideal for SMBs with limited tax expertise.

• Avalara: Has a steeper learning curve due to its comprehensive features and siloed products (e.g., AvaTax, Avalara Returns). Setup requires more configuration, especially for custom integrations, but it’s manageable with Technofog’s expertise.

Winner: TaxJar for its user-friendly interface and faster onboarding.

3. Integration

• TaxJar: Integrates seamlessly with major eCommerce platforms (Shopify, Amazon, WooCommerce, eBay) and accounting software (QuickBooks, Xero). Its API supports custom integrations, but it’s less extensive than Avalara’s ecosystem.

• Avalara: Boasts over 1,200 integrations, including ERPs (NetSuite, Sage Intacct), CRMs (Salesforce), and eCommerce platforms. Its API is robust, supporting complex, industry-specific needs across retail, SaaS, and manufacturing.

Winner: Avalara for its extensive integration ecosystem.

4. Pricing

• TaxJar: Offers transparent, subscription-based pricing starting at $19/month for basic plans, with higher tiers based on transaction volume. AutoFile costs $25 per filing. It’s budget-friendly for SMBs but may require additional fees for extra filings or states.

• Avalara: Uses volume-based pricing, starting at $50/year for small businesses but requiring custom quotes for most plans. Additional fees apply for services like filing ($25–$50 per return) or business licenses ($349 per location). It’s costlier for smaller businesses.

Winner: TaxJar for its transparent, affordable pricing for SMBs.

5. Customer Support

• TaxJar: Praised for responsive support via email, phone, and chat, with a comprehensive knowledge base. However, some users report slower support since Stripe’s acquisition, citing reduced staff.

• Avalara: Offers support via phone, email, and webinars, but reviews are mixed, with some users experiencing delays or impersonal responses. Premium support incurs additional costs.

Winner: TaxJar for generally better customer support reviews.

6. Scalability and Industry Fit

• TaxJar: Best for SMBs and eCommerce businesses with domestic sales tax needs. It struggles with international compliance and complex tax scenarios, limiting scalability for larger enterprises.

• Avalara: Scales effectively for mid-market to enterprise businesses, supporting international taxes, manufacturing exemptions, and multi-jurisdictional compliance. It’s ideal for complex industries like SaaS or global retail.

Winner: Avalara for its scalability and global reach.

Pros and Cons

TaxJar

Pros:

• User-friendly interface with quick setup.

• Affordable, transparent pricing for SMBs.

• Strong eCommerce integrations (Shopify, Amazon).

• AutoFile simplifies tax filing in select states.

• Detailed sales tax reporting for compliance.

Cons:

• Limited international tax support.

• Fewer integrations than Avalara.

• Support quality has declined post-Stripe acquisition.

• May overpay taxes if calculations don’t match collections.

Avalara

Pros:

• Comprehensive features for sales tax, VAT, and global compliance.

• Extensive integrations with ERPs, CRMs, and eCommerce platforms.

• Scales for large businesses and complex tax needs.

• Built-in Shopify Plus integration for seamless eCommerce.

Cons:

• Steeper learning curve and complex setup.

• Non-transparent pricing with additional fees.

• Mixed customer support reviews.

• Less suitable for smaller businesses with simple needs.

Which is Right for Your Business?

• Choose TaxJar if you’re an SMB or eCommerce business with domestic sales tax needs, prioritizing ease of use, affordability, and integrations with platforms like Shopify or WooCommerce. It’s ideal for businesses with straightforward compliance requirements and limited budgets.

• Choose Avalara if you’re a mid-market or enterprise business with complex tax needs, international sales, or industry-specific requirements (e.g., SaaS, manufacturing). It’s suited for businesses needing robust integrations and scalability.

Technofog’s Expertise with TaxJar and Avalara

Technofog helps businesses select and implement the right sales tax solution with a tailored approach:

• Needs Assessment: We evaluate your business size, industry, sales channels, and tax obligations to recommend TaxJar or Avalara.

• Custom Implementation: We configure tax calculations, nexus tracking, and filing workflows, ensuring seamless integration with your eCommerce (Shopify, WooCommerce) or accounting systems (QuickBooks, Sage Intacct).

• Integration: We connect TaxJar or Avalara with your CRM, ERP, or other platforms, using native connectors or Zapier for real-time data sync.

• Training and Support: Our team provides hands-on training and ongoing support to simplify adoption and address issues like setup complexities or filing errors.

• Optimization: We monitor performance, refine workflows, and ensure compliance with regulations like GDPR and CCPA.

• Audit Protection: We configure systems to maintain accurate records, reducing audit risks and ensuring compliance.

Success Stories

Technofog has empowered businesses with sales tax automation:

• eCommerce Retailer: We implemented TaxJar for a Shopify-based store, automating tax calculations and filings, reducing compliance time by 30% and eliminating overpayment issues.

• SaaS Company: We integrated Avalara with Salesforce and Sage Intacct for a global SaaS provider, streamlining international VAT compliance and improving reporting accuracy by 25%.

Why Technofog?

As certified consultants for TaxJar, Avalara, and related platforms like Sage and Zoho, Technofog brings deep expertise in sales tax automation. We understand the complexities of compliance and deliver scalable, secure solutions tailored to your needs. Our ongoing support ensures your tax processes remain efficient and accurate as your business grows.

Get Started with Technofog Today

Ready to simplify sales tax compliance with TaxJar or Avalara? Technofog is your trusted partner for selecting, implementing, and optimizing the right solution for your business. Let us help you automate tax calculations, streamline filings, and achieve peace of mind.

Contact Technofog Now for a consultation and take the first step toward transforming your sales tax compliance!