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What Small Businesses Pay for Online Sales Tax Solutions

Right now, a bill making its way through Congress would allow states to require out-of-state businesses to collect sales tax even if they don't have an in-state physical presence. This means remote retailers that sell online, over the phone, or via catalog would have to collect and file sales tax just like local businesses, and many states would have the ability to activate this requirement within 90 days of the bill becoming law.

What's the cost?

This looming change has many people asking: what will it cost small businesses? In its current form, the bill exempts businesses that make less than $1 million in remote sales per year. But what will it cost those that make $1.5 million? $5 million? Opponents of the bill argue that the tax collection burden on small businesses would be too great; they might have to calculate rates for hundreds (or even thousands) of tax jurisdictions and file returns in who-knows-how-many locations.

Of course, there are sales tax software solutions that handle these requirements for businesses, including calculating tax, managing exemptions, and filing returns in any state. Yet some claim this kind of software is still too costly for smaller companies. According to a recent article in the Wall Street Journal: ". . . advisers say it still could cost affected small businesses a lot of money to integrate the new software with their billing systems."

In this case the advisers are wrong. There are software solutions that are affordable and easy for any business to implement. Many small businesses today use software solutions to automate all of their sales tax requirements. How much does it cost? Here's how pricing works for our sales tax solutions:

Subscription Service

For AvaTax, our flagship software as a service, we use transaction pricing based on volume. AvaTax integrates directly with our customers' ERP, accounting, ecommerce or Retail POS systems to automate tax calculation, exemption certificate management, and returns. Avalara’s scalable pricing is based on transaction volume and starts at a few hundred dollars per year. Depending on the size and nature of their enterprise, most customers pay pennies per transaction.

Free Service

Avalara also offers free access to a sales tax rate look-up tool, SalesTax.Avalara.com, which is based on the same industry-leading technology as AvaTax, our flagship software as a service.

Free Streamlined Sales Tax Service

If a customer qualifies under the SST initiative as a ‘voluntary collector’ Avalara offers AvaTax at no charge to the customer.
Learn more

photo credit: velo_city via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Will Frei
Avalara Author Will Frei
Will Frei directs social media and blogging for @avalara. He is on a mission to help make sales tax less taxing for businesses of all kinds.