Industry solutions: Software
A cloud-based tax compliance solution for software and SaaS businesses
Automate the costly, tedious process of keeping up with ever-changing rules of how, where, and when software products and services are taxed.
Industry solutions: Software
A cloud-based tax compliance solution for software and SaaS businesses
Automate the costly, tedious process of keeping up with ever-changing rules of how, where, and when software products and services are taxed.
Reduce noncompliance risk
Manage international sales
Support recurring billing and subscriptions
Create a better exemption process
Avalara helps solve common tax compliance challenges software and SaaS businesses face
Improve compliance without increasing workload
Keep up with tax rate and rule changes, state to state and internationally.
Challenge
Knowing when you’re required to collect tax in each jurisdiction is tough enough.
And once you’ve figured that out, you still have to make sure you’re using the latest rates and rules for software and IT services, which differ based on whether you sell digital goods, prepackaged software, or cloud services.
Solution
Avalara automatically updates sales tax data in existing business applications, accounting for how and where you sell your software and services.
Improve compliance without increasing workload
Keep up with tax rate and rule changes, state to state and internationally.
Challenge
Knowing when you’re required to collect tax in each jurisdiction is tough enough.
And once you’ve figured that out, you still have to make sure you’re using the latest rates and rules for software and IT services, which differ based on whether you sell digital goods, prepackaged software, or cloud services.
Solution
Avalara automatically updates sales tax data in existing business applications, accounting for how and where you sell your software and services.
Manage tax on sales outside the United States
Calculate international tax rates and get help filing returns.
Challenge
The nature of software and SaaS sales often means companies of all sizes handle international sales.
With different rates, rules, and processes for each country, staying compliant can be hard for large corporations, let alone small and midsize businesses.
Solution
Avalara determines VAT and GST rates for 190+ countries, updated automatically as policies and rates change.
In addition, Avalara returns services simplify the challenge of remitting taxes internationally.
Manage tax on sales outside the United States
Calculate international tax rates and get help filing returns.
Challenge
The nature of software and SaaS sales often means companies of all sizes handle international sales.
With different rates, rules, and processes for each country, staying compliant can be hard for large corporations, let alone small and midsize businesses.
Solution
Avalara determines VAT and GST rates for 190+ countries, updated automatically as policies and rates change.
In addition, Avalara returns services simplify the challenge of remitting taxes internationally.
Simplify online sales tax management
Apply rates to multiple billing models.
Challenge
Updating sales tax rates for subscription services and recurring billing can feel impossible.
But if you get rates wrong, you risk routinely overcharging or undercharging customers. The former can lead to lost customers, the latter to noncompliance.
Solution
Avalara integrates with major subscription and recurring billing platforms, ensuring customers are charged an updated rate when taxes change after the initial sale.
Simplify online sales tax management
Apply rates to multiple billing models.
Challenge
Updating sales tax rates for subscription services and recurring billing can feel impossible.
But if you get rates wrong, you risk routinely overcharging or undercharging customers. The former can lead to lost customers, the latter to noncompliance.
Solution
Avalara integrates with major subscription and recurring billing platforms, ensuring customers are charged an updated rate when taxes change after the initial sale.
Enhance the tax-exempt sales experience
Give your business an advantage over competitors by incorporating sales tax exemptions into the purchase process.
Challenge
Tax-exempt sales can be difficult to process online.
But in some states, software vendors are considered manufacturers, and some of their sales are exempt.
Additionally, who you sell to can affect taxability. You need an efficient exemption process for sales to nonprofit, government, and religious organizations.
Solution
Avalara collects exemption certificates as part of the transaction process, so exemptions can be applied at the point of purchase.
Certificates are maintained in a database, so tax is automatically omitted on future sales when a valid document is on file.
Enhance the tax-exempt sales experience
Give your business an advantage over competitors by incorporating sales tax exemptions into the purchase process.
Challenge
Tax-exempt sales can be difficult to process online.
But in some states, software vendors are considered manufacturers, and some of their sales are exempt.
Additionally, who you sell to can affect taxability. You need an efficient exemption process for sales to nonprofit, government, and religious organizations.
Solution
Avalara collects exemption certificates as part of the transaction process, so exemptions can be applied at the point of purchase.
Certificates are maintained in a database, so tax is automatically omitted on future sales when a valid document is on file.
Sales tax laws and software companies
Getting sales tax right for software isn’t as simple as applying the local retail rate. Different states tax software differently, and new legislation frequently changes the rules.
Even the type of software you sell can affect taxability. Seven states (and Puerto Rico) tax all forms of software, while another 38 states tax some software, but not others — and the details vary across jurisdictions.
Avalara can help you save time and reduce human error while applying tax to your sales.
Sales tax laws and software companies
Getting sales tax right for software isn’t as simple as applying the local retail rate. Different states tax software differently, and new legislation frequently changes the rules.
Even the type of software you sell can affect taxability. Seven states (and Puerto Rico) tax all forms of software, while another 38 states tax some software, but not others — and the details vary across jurisdictions.
Avalara can help you save time and reduce human error while applying tax to your sales.
The Avalara software solution includes
Document management
Manage the documents you need to stay compliant.
Avalara State Sales Tax Registration
Avalara CertCapture
Avalara VendorCapture
Tax calculation
Apply transaction taxes on sales made in the U.S. or abroad.
Returns management
Choose the level of returns management that’s right for your business.
Implementation
With a robust API and over 700 prebuilt connectors, we can integrate with simple business environments or an omnichannel tech stack. We offer an assisted implementation process with a designated GoLive Coordinator and training sessions for your entire team.
Why Avalara?
Avalara is ideal for fast-growing software and SaaS businesses. Our cloud-based tax engine is regularly updated with new tax rates and rules so you don't have to invest hours in research and application updates.
Our cloud-based, end-to-end solution automates every step of the compliance process:
Licensing and registration in multiple jurisdictions
Exemption certificate and vendor management
Sales and use tax, VAT, GST, and specialty taxes
Audit documentation
Returns filing and remittance
Managed services
“Sales tax, because it’s based on revenue, is the elephant in the room. If you’re not compliant, it can get real ugly, real fast. Avalara, in that regard, helps me sleep better at night.”
“It’s definitely saved time, a lot of headaches. I would definitely recommend using Avalara for their sales tax automation processes.”
Why Avalara?
Avalara is ideal for fast-growing software and SaaS businesses. Our cloud-based tax engine is regularly updated with new tax rates and rules so you don't have to invest hours in research and application updates.
Our cloud-based, end-to-end solution automates every step of the compliance process:
Licensing and registration in multiple jurisdictions
Exemption certificate and vendor management
Sales and use tax, international customs duties, VAT, GST, and specialty taxes
Audit documentation
Returns filing and remittance
Managed services
“Sales tax, because it’s based on revenue, is the elephant in the room. If you’re not compliant, it can get real ugly, real fast. Avalara, in that regard, helps me sleep better at night.”
“It’s definitely saved time, a lot of headaches. I would definitely recommend using Avalara for their sales tax automation processes.”
Related Resources
Get the 411 on building a strategy for tax compliance in line with your growth plans
A guide to understanding and achieving sales tax compliance
On-demand webinar that breaks down how, when, where and why software is taxed
Infographic showing how different types of software are taxed across different jurisdictions
Are you selling voice, streaming, or data services? You may need communications tax.
