The best sales tax software must do more than just calculate tax. At the very least, it should allow you to apply tax rates per transaction, with built-in rates ready to go or the flexibility to add them manually. However, the gold standard is automatic rate calculation based on location, removing guesswork and reducing errors.
If your business sells in multiple states, economic nexus tracking isn’t a nice-to-have — it’s essential. With ever-changing thresholds and tax laws, the right software should tell you exactly when and where you’re required to collect so that you can stay compliant without constant manual oversight.
- Avalara with AvaTax: Best overall sales tax software
- TaxJar: Best standalone software for affordability and simplicity
- QuickBooks Online: Best for businesses using TurboTax
- Xero: Best for growing teams
- Zoho Books: Best for Zoho users
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I have several years of experience in accounting software evaluation and providing small businesses with reliable, expert insights.
Leveraging my accounting and bookkeeping expertise, I rigorously assess software using a structured rubric that objectively scores key features while upholding editorial independence.
Quick comparison of the best sales tax software
Monthly pricing | Free trial | Sales tax return filings | Economic nexus tracking | |
|---|---|---|---|---|
 | Custom | ✕ | Custom | Excellent |
 | From $19 | 30 days | From $30 per return | Average (no nexus trigger alerts) |
 | $35 to $200 | 30 days | ✕ | Limited (manual sales tax tracking) |
 | $20 to $80 | 30 days | ✕ | Limited (manual sales tax tracking) |
 | $0 to $275 | 14 days | ✕ | Limited (manual sales tax tracking) |
Avalara with AvaTax: Best overall sales tax software
Pros
- Offers real-time, address-level tax rate calculation
- Supports 12,000+ US sales tax jurisdictions and international VAT
- Is easy to use, with strong automation and rule-setting features
- Integrates with 700+ platforms, including Shopify, NetSuite, and QuickBooks
- Tracks economic nexus and alerts when thresholds are exceeded
- Includes detailed, audit-ready reporting and documentation
Cons
- Is more expensive than competitors, especially for smaller businesses
- Requires add-ons (like exemption certificate management) for full functionality
- Lacks support in base plan
- Can be complex to implement for custom setups or international tax rules
Monthly pricing | Custom |
Discount | ✕ |
Free trial | ✕ |
Economic nexus tracking | Excellent; tracks revenue and transaction thresholds in all states. Alerts are automatic and easy to act on and require no manual intervention. |
Sales tax return filing | Excellent; automates filing and remittance in all states. Supports auto-withdrawal, manages deadlines, handles different filing frequencies, and stores filed returns. |
Accounting software integration | QuickBooks Online, QuickBooks Desktop, Xero, NetSuite, Sage Intacct, Microsoft Dynamics 365 BC, Microsoft Dynamics 365 F&O, Acumatica, FreshBooks, SAP |
Avalara checked nearly all my boxes when I was researching the best sales tax software for accuracy and automation. It handles real-time sales tax calculations, economic nexus tracking, and multi-state filings in one platform. I especially like how it integrates with major accounting systems like QuickBooks, NetSuite, and Microsoft Dynamics, making it a strong choice for scaling businesses.
That said, pricing isn’t published, and the cost can vary widely depending on your setup. Support and advanced features often come as add-ons. If you’re a smaller company looking for predictable pricing, TaxJar is a solid option — it is one of the better sales tax software for small business needs and works well for e-commerce. However, Avalara remains a top pick for enterprise-level sales tax compliance software.
Standout features and use cases
- Real-time tax calculation: Applies address-level accuracy using constantly updated tax rules
- E-commerce businesses: Prevents costly tax errors at checkout and helps you avoid refund or audit issues later
- Economic nexus tracking: Monitors revenue and transaction thresholds for every state and alerts you before you cross them
- ERP and accounting integrations: Connects directly with tools like QBO, NetSuite, and Dynamics to sync tax data
- Exemption certificate management: Stores and validates resale and exemption certificates in one place
TaxJar: Best standalone software for affordability and simplicity
Pros
- Is easy to use with a clean, intuitive interface
- Provides automated return filing via AutoFile in many states
- Has transparent pricing for small and medium businesses
- Features nexus tracking tools for state-by-state compliance
Cons
- Lacks native integrations with large ERP systems like NetSuite or Microsoft Dynamics
- Has economic nexus tracking, but it's more limited than Avalara’s (no transaction threshold tracking for some states)
- Is less customizable for complex or enterprise-level tax rules
Monthly pricing |
|
Discount | ✕ |
Free trial | 30 days |
Economic nexus tracking | Average; tracks state-by-state revenue thresholds, but not all transaction counts. Has fewer alerting features and no visual dashboards compared to Avalara. |
Sales tax return filing | Good; filing is easy to set up, but it is limited to certain jurisdictions and requires eligibility approval. |
Accounting software integration | No direct support with accounting software; requires third-party connectors |
I recommend TaxJar if you’re looking for the best sales tax software that’s affordable and easy to use. It offers real-time tax calculations, AutoFile for automated returns, and strong native integrations with platforms like Shopify, Amazon, and Stripe.
One key limitation is TaxJar’s lack of direct integration with major accounting platforms like QuickBooks, Xero, and NetSuite. If you need deeper ERP or accounting connectivity, Avalara is a stronger choice. It integrates directly with those systems, supports real-time syncing, and offers more robust tools for sales tax compliance software across complex operations.
Standout features and use cases
- AutoFile for sales tax returns: Automatically files returns in supported states once enabled
- Small businesses and solo sellers: Automates filing so that you can stay compliant and hit deadlines — no full-time accountant required
- Online sellers: Has native integrations that allow you to sync orders, calculate tax, and generate reports without extra plugins or manual setup
- Simple, flat-rate pricing: Offers transparent monthly plans with no surprise fees
- Budget-conscious businesses: Has flat-rate pricing that makes it easy to plan costs and avoid the complexity of usage-based or custom enterprise pricing
QuickBooks Online: Best for businesses using TurboTax
Pros
- Calculates sales tax based on customer location and product type
- Supports state and local sales tax tracking in multiple jurisdictions
- Allows you to apply custom tax rules and overrides
- Works well for other tax-related concerns using TurboTax
Cons
- Limited nexus tracking — doesn’t monitor thresholds across states
- Has no automated sales tax return filing without third-party apps
- Has reporting tools, but they are basic and aren't audit-optimized
Monthly pricing |
|
Discount | 50% for three months |
Free trial | 30 days (forfeits the discount) |
Economic nexus tracking | Limited; does not track economic nexus thresholds automatically. There are no built-in alerts or dashboards to indicate when nexus is triggered. |
Sales tax return filing | Basic; calculates and records sales tax but doesn’t file returns for you. No auto-remittance or state-specific form generation is included. |
Accounting software integration | N/A; is accounting software |
QuickBooks Online is a solid option if you want built-in sales tax features. It automatically calculates tax based on location and product type, updates rates regularly, and works well for single-state or low-complexity sellers. If you have a small team that’s already using QuickBooks Online for accounting, having sales tax built into the same dashboard simplifies workflows.
For sole proprietors or freelancers, it also pairs well with TurboTax, streamlining year-end filing by syncing business income and sales tax data in one place. Unfortunately, QuickBooks Online doesn’t track nexus or file returns, but for basic needs, it’s often enough, and you can always integrate Avalara or TaxJar for advanced sales tax compliance software capabilities.
Standout features and use cases
- Automated sales tax calculation: Calculates rates based on the customer’s address and product type using updated jurisdiction data
- Custom tax rules and overrides: Allows you to set product- or customer-specific tax rates when exceptions apply
- Sales tax reporting: Generates detailed tax liability reports to support manual filing and recordkeeping
Xero: Best for growing teams
Pros
- Supports basic sales tax setup for US and international tax (e.g., VAT, GST)
- Allows you to create multiple tax rates and rules by jurisdiction
- Automatically applies default tax rates on invoices and bills
- Syncs sales tax data with connected bank feeds and reports
- Works well for single-state businesses or those with simple tax needs
Cons
- Lacks built-in economic nexus tracking or alerts
- Doesn’t support automated sales tax filing
- Lacks real-time tax rate updates from state/local authorities
- Has limited functionality for US-based businesses with multi-state tax obligations
- Requires third-party integrations (e.g., Avalara) for advanced compliance or automation
Monthly pricing |
All plans include unlimited users. |
Discount | ✕ |
Free trial | 30 days |
Economic nexus tracking | Limited; does not track revenue or transaction thresholds. You must monitor manually across all states. |
Sales tax return filing | Limited; generates reports for reference only. No built-in filing or remittance features available. |
Accounting software integration | N/A; is accounting software |
Xero is a smart choice if your growing teams need just enough sales tax functionality without the complexity of an enterprise system. It makes it easy to set up custom rates, apply them automatically to invoices, and handle VAT/GST for international sales — all within a clean, user-friendly interface. As your team adds clients or expands into new regions, Xero scales well without adding unnecessary layers or steep learning curves.
However, it doesn’t offer nexus tracking or automated filing, which may make it hard to detect if you have already met sales tax thresholds. But for smaller teams or international businesses, it covers the essentials, and if you ever need more advanced features, you can integrate Avalara to handle multi-state or US-specific sales tax compliance software tasks.
Standout features and use cases
- Custom tax rate setup: Allows you to build location- or product-specific tax rules tailored to your business
- Single-state US businesses: Helps you stay compliant without needing third-party software or manual workarounds
- Automatic tax application: Applies default tax rules to every invoice, bill, and purchase entry
Zoho Books: Best for Zoho users
Pros
- Handles US sales tax calculations automatically during invoicing
- Adjusts tax rates dynamically based on customer's shipping address
- Supports multiple tax regions; is suitable for businesses operating in several states
- Offers customizable tax rules to handle special exemptions or product-specific rates
Cons
- Doesn’t track economic nexus thresholds
- Lacks built-in option for filing returns; requires integration or manual submission
- Has functional tax reports, but they may not be detailed enough for complex audits
- Lets you manage tax across several states, but can get clunky without third-party tools
Monthly pricing |
Additional users can be added to any plan for $3 per seat, per month. |
Discount | Annual plans are priced lower |
Free trial | 14 days |
Economic nexus tracking | Limited; does not monitor revenue or transaction thresholds across states. You must track nexus manually or rely on an external integration like Avalara for proactive alerts and compliance. |
Sales tax return filing | Limited; can calculate and report collected taxes, but doesn’t support direct e-filing |
Accounting software integration | N/A; is accounting software |
Zoho Books is one of the best sales tax software options if your small business already uses the Zoho ecosystem. It offers built-in automation by calculating tax based on location, supporting custom rules, and handling multi-jurisdiction rates with ease. For teams managing everything from CRM to invoicing in Zoho, having sales tax built into the same platform keeps workflows seamless. You can also integrate Avalara for more advanced compliance.
However, Zoho Books doesn’t offer built-in nexus tracking or automated filing — but if your team just needs reliable sales tax compliance software to handle calculations and reporting, it gets the job done. It’s a strong choice if your business manages its own returns but still needs accuracy and flexibility.
Standout features and use cases
- Location-based tax calculation: Automatically determines the correct rate based on customer’s shipping address and jurisdiction
- Multi-jurisdiction support: Handles city, county, and state-level taxes without manual tracking
- Custom tax rate setup: Lets you create rules for specific products, services, or exemption scenarios
- Automatic tax application: Applies sales tax to invoices, bills, and expenses without needing extra input
How I evaluated the best sales tax software
I focused on the features that matter most for businesses trying to stay compliant and wanting to avoid spending hours on manual tax work. The best tools automate the complexity, reduce risk, and scale with your business.
- Ability to set sales tax rates: I looked for tools that let you configure tax rules manually. However, I awarded extra points to those that automatically apply the correct rate based on customer location. This reduces setup time and eliminates rate errors.
- Economic nexus tracking: Because many states now enforce sales tax based on revenue or transaction thresholds, I prioritized platforms that alert users when they’re approaching those limits. It’s a critical feature for remote sellers and growing businesses.
- Automatic sales tax application in transactions: Good software should apply the right tax to invoices, sales, and purchases without user intervention. This ensures accuracy and speeds up daily workflows.
- Sales tax return filing: I considered whether the platform supports automated filing and remittance. Tools that handle deadlines, payments, and jurisdiction-specific forms stand out for reducing compliance risk.
- Accounting or e-commerce integration: I gave extra weight to tools that plug directly into systems like QuickBooks Online, NetSuite, Shopify, or Stripe, which ensures smooth data flow and less manual entry.
Frequently asked questions (FAQs)
Look for automatic tax rate calculation, multi-state and local jurisdiction support, custom rule setup, nexus tracking, return filing, and integration with accounting or e-commerce platforms.
Yes, you can calculate, collect, and file sales tax on your own, especially if you sell in one state and have simple tax rules. However, doing so takes time and careful recordkeeping.
Hire a professional if you sell in multiple states, deal with complex product taxability, or want audit-ready filings. DIY works best for small, single-state businesses with straightforward tax needs.