In this blog post, we’ll review all of the best TaxCloud alternatives and competitors, discuss the reasons you might be looking for a new sales tax solution, and cover the pros and cons of TaxCloud so you can choose the right one for your needs – regardless of the size, industry or complexity of your business.
4 Reasons You're Probably Looking for a TaxCloud Alternative
Final Thoughts on TaxCloud Alternatives
When it comes to managing sales tax compliance, most businesses want an affordable, automated solution that takes the work off their plate. Unfortunately, TaxCloud falls short in several areas that are pushing many companies to look for an alternative sales tax provider.
TaxCloud is known for providing free sales tax calculation and filing services in SST member states, but even free services come at a cost. TaxCloud has numerous one-star reviews claiming that there were issues with contacting customer support, invoice and billing issues, tax calculation problems, and sales tax filing inaccuracies. Many reviewers claim that they did not receive timely responses to their support emails or phone calls if they received a response at all.
To make matters worse, TaxCloud’s defensive response to some of these reviews is alarming:
“...The 1000's of merchants that rely on us for their sales tax compliance disagree with you. Our FREE service is based on our partnership with the SSTP member states - are you looking for an apology for us offering a FREE service? Please talk to our competitors and you can pay all you want. We have no idea what you are talking about on the 8% of revenue claim. Our pricing is transparently presented on our website and within our terms of service (which you obviously didn't read when you accepted it).”
In addition, many reviewers note that their sales tax filings were inaccurate due to issues with their data integrations and tax calculations. If you decide to work with TaxCloud, you should be prepared to manually oversee your sales tax each month to ensure that everything is working smoothly. Since managing sales tax correctly is a critical function of many businesses, the risks of a free SST provider like TaxCloud may outweigh the benefits.
When most businesses turn to a sales tax provider, they’re looking for all of their sales tax problems to go away. The unfortunate reality is that TaxCloud is not a done-for-you sales tax service and heavily relies on its users to ensure its systems are fully operational and handle all of the things that the software doesn’t provide.
Some examples of things that TaxCloud does not include in its service:
TaxCloud is widely known for marketing the fact that their service is “free” but that doesn’t tell the full story. As an SST sales tax filing solution, TaxCloud is required to provide you with free sales tax calculation and return preparation services in member states. However, TaxCloud is allowed to charge you for all the other things that you’ll need to automate sales tax filings.
TaxCloud requires a paid premium plan for critical features that are required to automate your sales tax. You’ll need to upgrade to a paid premium plan if you need…
Their pricing isn’t exactly cheap, either, considering that it is not an all-inclusive managed service. As of writing this article, here’s what TaxCloud is charging for their premium plan:
Unfortunately, the best things in life aren’t free, and that seems to be the case here when evaluating TaxCloud’s “free” sales tax filing solution.
TaxCloud is known for providing free sales tax filing services in SST member states, but it comes with a catch: In order to file and pay sales tax for free, you’ll need to register with all of the member states. This is unappealing for many businesses because it means you’ll need to charge sales tax to many customers that you might otherwise not need to. Paying sales tax in states that you otherwise wouldn’t need opens you up to unnecessary complexity which can mean greater costs for your business. These costs come in the form of time investment, and spending money on additional IT resources.
Like TaxCloud, Sovos Compliance is a Streamlined Sales Tax Certified Service Provider that handles free sales tax filings and calculations for businesses in streamlined sales tax states. As a certified automated system, Sovos has accurate tax rates and rules validated by SST member states. Sovos offers businesses full sales tax outsourcing including calculations, filing, and remittance for SST jurisdictions.
As a certified service provider, Sovos has comprehensive and accurate tax calculation and filing capabilities that are validated by SST states. This provides liability relief and audit support for qualifying sellers. Sovos also provides priority support and implementation at no cost for Model 1 sellers.
Potential downsides to consider are that Sovos is focused specifically on Streamlined Sales Tax states, so additional paid solutions will be needed for other jurisdictions. Businesses must use Sovos for all tax functions under the Model 1 program. There are also specific qualifications to receive the full benefits as a Model 1 seller, and extra costs apply for services outside SST states.
In addition, Sovos Compliance is not an all-inclusive, done-for-you, managed sales tax service, so you’ll still be responsible for overseeing and managing all of your sales tax processes each month.
When evaluating TaxCloud vs. Sales Tax DataLINK, it’s important to remember that Sales Tax DataLINK is the only comprehensive sales tax solution in the marketplace that specifically addresses the needs of manufacturers. Finding a sales tax solution that will work for your manufacturing business can be particularly challenging because of the additional compliance requirements manufacturers face. As a manufacturer, you’ll need a solution that can support manufacturing exemptions, focusing on remitting use tax for certain purchases. But they don’t just help manufacturers, they also specialize in sales tax services for construction and contracting companies.
With Sales Tax DataLINK, you’re not just getting sales tax software to automate tax calculations and filings. You’ll get a personal sales tax concierge located in Arkansas who can assist your manufacturing business with setup, filings, registrations, exemption management, Voluntary Disclosure Agreements (VDAs), gross receipts tax, and more.
Finding an ecommerce sales tax provider can be particularly challenging because very few software solutions provide complete coverage for all of your sales tax needs. This is where TaxValet shines because it provides an affordable all-inclusive solution with deep ecommerce industry expertise.
TaxValet is a great fit for businesses that never want to deal with sales tax again. Here’s an overview of what’s included:
One potential drawback of TaxValet is that they don’t provide ecommerce sales tax services to businesses doing less than $1M/year in revenue, and they don’t provide an online app for you to log in to. Instead, you’ll be assigned a dedicated sales tax accountant who provides you with concierge support (phone, Zoom, and email support) for all of your sales tax needs.
DAVO’s software was built specifically for retail businesses to manage sales tax for brands with in-store sales. DAVO automates sales tax calculations and reporting based on store locations and integrates directly with popular POS hardware and accessories.
Key features for DAVO’s retail sales tax solution include:
Downsides of DAVO include that it is not a comprehensive solution that handles all aspects of your sales tax such as managing audits for you, managing sales tax permit registrations, or examining whether the products you sell are taxable. If you decide to go with DAVO, you should plan to work with a trusted sales tax consultant, at least for the initial setup.
Vertex provides fully integrated sales and use tax solutions tailored for complex, global enterprises across multiple industries. Vertex offers automated tax calculations, returns, and exemption certificate management powered by precise tax content databases. Large corporations can consolidate transaction data from multiple systems and handle multinational product taxability with Vertex. Vertex is primarily focused on enterprise accounts and is an excellent solution for Fortune 500 companies. Vertex’s software is extremely flexible and can support high levels of complexity.
One downside of Vertex is that implementation requires significant involvement with subject matter experts and IT departments. You’ll likely need an internal tax department that’s trained to manage its feature-rich software.
Many companies turn to software to automate sales tax filings and payments, only to later realize how much time and expertise is required to manage sales tax on an ongoing basis. This is where working with an all-inclusive sales tax service like TaxValet pays off. With TaxValet, you’ll get a dedicated sales tax accountant and a team of trusted advisors who’ll manage all of your sales tax each month and provide 24/7 support with a dedicated sales tax expert who understands your business.
TaxValet is a great fit for businesses that want to outsource sales tax with complete peace of mind. Here’s an overview of what’s included:
One potential drawback of TaxValet is that they don’t provide services to businesses doing less than $1M/year in revenue, and they don’t provide an online app for you to log in to. Instead, you’ll be assigned a dedicated sales tax accountant who provides you with concierge support (phone, Zoom, and email support) for all of your sales tax needs.
Cherry Bekaert is a top accounting firm that is an excellent alternative to middle-market and larger companies with complex tax needs. They provide customized solutions tailored to a wide array of industries and business types. Their team is composed of highly credentialed professionals, including those with advanced degrees in law and taxation. They provide thorough tax preparation and compliance, audit representation, and up-to-date advisory on tax law changes. One advantage of working with Cherry Bekaert is that they can provide support for more than just sales tax and offer comprehensive solutions for a variety of tax and advisory needs.
Downsides of Cherry Bekaert include that they only service mid-market and larger clients, are at a high price point, and are less suited for simple tax needs.
TaxJar is a sales tax software solution built for small businesses that are looking for a no-frills automated sales tax filing solution. TaxJar automates sales tax calculations, filings, and payments for top e-commerce platforms and is generally known for its ease of use.
However, not everyone is happy with TaxJar’s sales tax solution. Here are some common complaints about TaxJar based on online reviews:
TaxValet’s sales tax service completely takes sales tax off your plate so that you’ll never have to deal with it again. TaxValet’s comprehensive service takes the hassle, stress, and risk out of sales tax by handling everything for you from start to finish. TaxValet’s service includes everything you need for one simple all-inclusive price.
TaxValet is a great fit for businesses that are looking for comprehensive sales tax services and excellent customer service. Here’s an overview of what’s included:
One potential drawback of TaxValet is that they don’t provide services to businesses doing less than $1M/year in revenue, and they don’t provide an online app for you to log in to. Instead, you’ll be assigned a dedicated sales tax accountant who provides you with concierge support (phone, Zoom, and email support) for all of your sales tax needs.
After exploring the different TaxCloud alternatives for sales tax compliance, it’s clear there isn’t a one-size-fits-all solution. While TaxCloud can be a good fit for cost-conscious small businesses, there are better options.
At TaxValet, we offer clients an experienced and dedicated team, timely legislative alerts, comprehensive sales tax services, and full software integration so you can focus on building your business. From setting up accounts and filing for permits to cleaning up data and managing audits, we pride ourselves on addressing every single aspect of sales tax for our clients.
If you’re tired of managing sales tax on your own, schedule a free sales tax review with our team and see the difference for yourself.
The main pros of TaxCloud include:
The main cons of TaxCloud include:
TaxCloud is ideal for small to medium-sized businesses that require a cost-effective solution for managing sales tax across multiple states. The service is particularly appealing for those who can benefit from the free version, which requires filing in all 24 Streamlined Sales Tax states. TaxCloud may also not be the best fit for businesses that don’t have the time or expertise to manage sales tax in-house or businesses that do not need to file in the streamlined states.
TaxCloud can be a good option for price-sensitive ecommerce companies that only need to file in SST member states. TaxCloud provides support for ecommerce businesses that sell on popular channels like BigCommerce, Shopify, Woocommerce, Volusion, Magento, and Stripe. However, ecommerce businesses should pay special attention to TaxCloud’s poor customer reviews available online. You should also be aware of the limitations of TaxCloud’s free plan.
TaxCloud’s sales tax software was not built to handle the complexity that many Software-as-a-Service (SaaS) businesses require. SaaS companies will need a solution that can handle software companies’ unique product taxability, and that handles common SaaS invoicing platforms. Alternatives like TaxValet, Anrok, or Avalara are better options for SaaS companies.
Many online reviewers have indicated that their customer support is lacking with it taking weeks to get a response from their team, if they receive a response at all. Here’s one example of what a user has to say about TaxCloud:
“No customer support, and website has constant issues limiting functionality. Their support docs are for a previous version of site and are overall useless. We contacted them repeatedly by phone and email to resolve issue (site wouldn't let us add any states beyond the 'free' ones) and it took almost 10 days to receive a response. The same girl answers the phone and puts you on hold to 'contact' the tech department (and later, the manager), who are conveniently never available. We went with another company due to lack of support.”
TaxCloud has also indicated a lack of tact in dealing with such customer criticism. Here’s an example of how they’ve handled customer complaints:
“...The 1000's of merchants that rely on us for their sales tax compliance disagree with you. Our FREE service is based on our partnership with the SSTP member states - are you looking for an apology for us offering a FREE service? Please talk to our competitors and you can pay all you want. We have no idea what you are talking about on the 8% of revenue claim. Our pricing is transparently presented on our website and within our terms of service (which you obviously didn't read when you accepted it).”
TaxCloud provides free sales tax filing and calculation for SST member states, however, you’ll likely need to upgrade to their premium tier to take advantage of features that most businesses will find critical.
Their pricing isn’t exactly cheap, either, considering that it is not an all-inclusive managed service like TaxValet. As of writing this article, here’s what TaxCloud is charging for their premium plan:
In the event of a sales tax audit, TaxCloud can provide you with records that you can provide to the auditor. However, you’ll be responsible for managing the audit in-house which can be fraught with risk if you don’t have an in-house sales tax expert who can manage it for you. This is where working with a more comprehensive sales tax service has its advantages.