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Jul 28, 2022 | 9 minute read

Top 9 eCommerce Sales Tax Software in 2022

written by Hank Chang

With the expansion of eCommerce in recent years, the demand for tax software has simultaneously increased.

According to Fortune Business Insights, “the global tax management software market size was USD 5.24 billion in 2018 and is projected to reach USD 11.19 billion by 2026, exhibiting a CAGR of 10.4% during the forecast period.” This growth is primarily due to  the rising volume of financial transactional data captured by many businesses. 

Tax software helps eCommerce businesses streamline the process of calculating taxes by eliminating the need for teams to keep up with the countless sales tax laws and rates that are constantly changing. Furthermore, tax software assists businesses with filing returns, preparing for audits, managing payments, and prepping exemption certificates.

In this blog, we will take a look at some of the key benefits and challenges of using tax software, as well as a list of the top sales tax eCommerce vendors in the market.

Benefits to Using Tax Software

There are many different ways that tax software can help online businesses. 

  1. First, tax software ensures that businesses are on time when filing returns by alerting them to deadlines. By utilizing tax software, businesses can rest easy and have one less thing to keep track of. 
  2. Tax software makes businesses more efficient by automating standard processes. Companies can use the time saved in this aspect to prioritize other sectors of the business.
  3. Tax software can also make the lives of management easier as it cuts down on the number of employees needed to do sales tax-related work. Tax software not only reduces the stress on a business’s bottom line, but also helps businesses balance their workplace. 
  4. Finally, tax software minimizes the amount of errors that occur in tax-related work when done manually. The accuracy of the tax software is due to the fact that it is continually updated with the most recent rules and policies, so there is no additional time required to keep up with current knowledge. 

Challenges to Using Tax Software 

Although it may seem like tax software has many benefits, there are still a few shortcomings that can inconvenience users. 

Human error won't be fully eliminated as some tax compliance software still requires data to be input manually. The system has no way of working properly if data is incorrect. Another downfall of tax software that stems from human error is tax determinations. Tax compliance software often can not make tax determinations for clients because of the uniqueness of each situation, so users must choose from a list of tax categories manually.

Finally, tax software can be expensive when adding up subscription, implementation, and onboarding fees. Customers should make sure that the tax software they are using is cost-effective for them as contracts can last multiple years. 

There are many tax software options, so let’s take a look at nine of the top eCommerce tax compliance software vendors in the market, listed alphabetically. 

Top eCommerce Tax Software Vendors 

Headquarters: Bainbridge Island, WA

Businesses that use Avalara can manage customers globally. The platform is used by over thirty-thousand customers in 95 countries. Through AvaTax, the in-house rate calculation tool can make all the needed calculations for sales tax reporting. When utilizing Avalara, you can get reliable and accurate data from experts, have no downtime at peak times, and leverage their 1000+ signed integration partners. 

Headquarters: Westbrook, ME

DAVO separates the amount of sales tax collected daily, files it, and pays it to the state on time. Tax documents can also be stored on DAVO for future reference. Set-up of the software is frictionless through POS and DAVO alerts you when on-time filing discounts are available.

Headquarters: Riga, Latvia

LOVAT provides an all-in one solution for accurate VAT calculation, reporting, and payments accessible in 57 different countries. They have a SaaS business model that automatically files tax reports and allows users to upload sales data from different sources. LOVAT starts at $43 a month, but does offer a free trial for new users.

Headquarters: Las Palmas, Spain

Quaderno is compatible with popular eCommerce platforms such as WooCommerce, Shopify, and Amazon FBA and can be used globally. The software can integrate with content platforms, shopping carts, or payment processors and also supports multi-channel selling. Also, Quaderno is able to automate billing and provide each customer a personalized bill. 

Interested in an Integrated Tax Solution for your eCommerce Platform?

Check Out our Accelerators Page to See How We Can Make It Happen

Headquarters: Multiple offices in the US

QuickBooks is among the most commonly used tax softwares in the world with 7 million customers. Positioned for small businesses, QuickBooks automates sales tax calculation, product categorization, and sales tax liability reports. If you are looking for a tax software for calculations, QuickBooks is best suited for your needs. 

Headquarters: Norwalk, CT

TaxCloud provides sales tax calculation within the U.S. and has two payment models: free or fee based. The free model is paid for by TaxCloud’s state partners. TaxCloud has integrations with many carts, platforms, marketplaces, and payment processors to ensure a seamless experience. 

Headquarters: Boulder, CO

Taxify helps avoid late fees through automatic tax calculation and filing with accurate rates. In addition, the platform automatically complies with tax changing laws. Taxify is also equipped with online tax experts to answer questions and fulfill your needs whenever. Compared to other vendors, Taxify does have an option of a free trial, but is on the more expensive side, starting at $47 per month.

Headquarters: Woburn, MA

TaxJar is a cloud-based tax platform launched by Stripe that automates the entire sales tax lifecycle, does calculations, and even files reports. Its features include a product classification tool, which uses AI to calculate the individual sales taxes of different products in your store. With 99.99% uptime and dynamically updated laws and regulations, it is one of the best tax software vendors currently in the market. 

Headquarters: King of Prussia, PA

As a company with 40+ years of experience, Vertex focuses on providing flexible solutions to clarify tax compliance. Vertex automates the process of tax calculations that come with expanding your ecommerce business to a new country. Also, Vertex can help boost VAT accuracy, stay up to date with regulations, and centralize visibility. 


Tax software helps businesses decrease the amount of time they spend on managing sales taxes and improves the accuracy. They are able to do so by automating the process of sales tax calculations and keeping up with current rules and legislation. Punctuality of filing taxes is also aided by the use of tax software, which can lead to on-time filing discounts.

With the wide variety of tax compliance software in the market, business owners need to choose one that fits their needs and budget.