TaxJar Raises $600K as Congress Resumes Debate on Internet Sales Tax

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determine which ones apply, beginning with the 45 states that tax retail sales. Sales taxes imposed at various levels of local government also might apply, as well as taxes set by special tax jurisdictions for such things as education, mass transit, and stadiums. Payment schedules also vary, depending on the jurisdiction.

Meanwhile, TaxJar is announcing today that it has raised $600,000 in early stage funding from individual investors, including Dan Rose, vice president of partnerships at Facebook; Harris Barton of H. Barton Asset Management; and Magento co-founder and COO Roy Rubin.

TaxJar says it plans to use the funding to win new customers and to implement a number of new features, such as a tax rate lookup service, sales tax return e-filing, and data sources that can support additional online sellers.

Still, the market for sales tax software is becoming increasingly competitive.

Just last month, Bainbridge Island, WA-based Avalara, which provides business software for accurate tax compliance, said it had added another $30 million in a venture round that brings total funding to more than $100 million for the 10-year-old company. Other rivals include ADP’s Taxware and Thomson Reuters’ Sabrix.

But where TaxJar’s rivals are focused primarily on serving big retailing customers, Faggiano says TaxJar is targeting the masses who sell their stuff through Amazon, eBay, Shopify, PayPal, BigCommerce, and Etsy.

“We’re trying to be the small business provider that takes away the problem and the hassles, mostly for companies with less than 50 employees,” he says. TaxJar’s customers vary from small merchants with less than $100,000 a year in online sales to mid-market merchants selling millions of products across multiple channels and collecting millions of dollars in sales tax.

Faggiano concedes that Amazon handles the tax logistics for retailers using its platform. But he contends that doesn’t mean sellers are satisfied with Amazon’s service—or that they’re content to pay the fees Amazon charges to determine how much sales tax a seller owes in various places. Faggiano’s goal is to simplify tax filings for online businesses with TaxJar and for certified public accountants with TaxJar Pro.

“We’ve got plenty of tailwind,” Faggiano says. “There’s a huge opportunity for us.”

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Bruce V. Bigelow was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Follow @bvbigelow

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