TaxCloud vs Stripe Tax: Which is better in 2025?
By switching from Stripe Tax to TaxCloud, teams can enjoy an end-to-end, U.S.-based tax solution with automated filing, better support solutions, and a full picture of nexus insights in a unified dashboard. Read on to learn why TaxCloud is one of the best Stripe Tax alternatives for online marketplaces.
Stripe Tax
Pay as you go
TaxCloud
Starter
Stripe Tax
Monthly
TaxCloud
Premium
None
1,200/year
200/month
2,400/year
3rd party only
$39 per return or $599 nationwide
3rd party only
$39 per return or $599 nationwide
Feature Comparison
Stripe Tax
TaxCloud
Starter (or Premium)
3rd party
3rd party
$39/filing
3rd party
$599/month
Starting at $99/month
Why TaxCloud?
Onboard filing solutions
While Stripe Tax can help users capture tax information at checkout, it doesn’t provide a native solution for filing returns or handling registration processes to state and local tax authorities. Businesses have to manage these processes on their own or through a separate service in order to stay compliant.
With TaxCloud, the entire sales tax lifecycle is automated as part of a complete, end-to-end process. Once taxes are collected, TaxCloud prepares and submits returns directly to states where you have an outstanding tax obligation. This approach reduces the administrative burden and minimizes the risk for errors, helping brands stay compliant without the need to manually file taxes.
For companies who prefer to work with accountants or dedicated firms, it’s possible to export data collected by TaxCloud and send it to a third party. In doing so, you’ll pay less for TaxCloud, as filing fees are transacted separately from order processing.
Capture cross-platform transaction data
One of the biggest drawbacks to Stripe Tax is that the platform only tracks transactions that are processed within the Stripe ecosystem. While Stripe is a huge brand and a powerhouse for payment processing, it can’t account for every transaction in the digital marketplace. Brands who offer payment solutions outside of Stripe will need to collect tax data either manually or through a separate provider.
By contrast, TaxCloud provides cross-platform sales tax management that works flawlessly across multiple channels, including Shopify, WooCommerce, BigCommerce, and others.
The key difference: Where Stripe Tax is connected to Stripe’s payment processing, TaxCloud integrates with the platform itself. Regardless of which method or system is used to transact a payment, TaxCloud can capture that data as the e-commerce platform transacts the payment. To set this up, you’ll need to connect every platform you sell on with TaxCloud. After that, TaxCloud will track every transaction on every channel and count those totals against local nexus obligations.
Exemption certificate support
For businesses that deal with tax-exempt customers like wholesalers, nonprofits, or government entities, managing exemption certificates is a key compliance challenge.
Unfortunately, Stripe Tax doesn’t offer native exemption support. Instead, users will need to track this information manually or work with a third party provided to track and verify tax-exempt entities.
With TaxCloud, exemption certificates can be uploaded manually or via API (depending on your platform type). This can be done by customers when signed into their website profile or uploaded directly by businesses from within their TaxCloud settings. In both cases, TaxCloud generates a Certificate ID that can be used to void the sales tax for the sale.
Streamlined Sales Tax provider
TaxCloud is one of six businesses officially recognized as a Streamlined Sales Tax (SST) provider, which offers significant cost savings when filing among any of the 24 participating states.
SST filings simplify and streamline sales tax calculation, collection, and remittance across member states. As an SST-certified provider, TaxCloud can provide free tax calculations and filing services for eligible businesses.
Unfortunately, Stripe merchants using Stripe Tax (or any other Stripe-related tax product like TaxJar or Lemon Squeezy) can’t take advantage of these discounts because Stripe doesn’t support SST. As a result, companies using Stripe Tax end up paying more and can’t apply for the same discounts available through TaxCloud.
What you get with TaxCloud
End-to-end U.S. tax compliance
TaxCloud provides end-to-end sales tax compliance for businesses selling in the United States, including everything from jurisdiction-based tax rate determination to automated filing and remittance. As an all-in-one solution, TaxCloud helps businesses remain compliant even as state and local tax regulations evolve and change.
Unlike standalone tax calculation tools, TaxCloud is a fully automated service that covers every aspect of the sales tax lifecycle. The platform integrates with most major e-commerce marketplaces and determines the correct tax rate based on designated product codes and the customer’s purchasing location. As goods and services are transacted, TaxCloud logs the tax details based on location and adds the total to the cumulative nexus obligations for a given jurisdiction.
On the backend, TaxCloud consolidates all transactions from integrated platforms into one place, so that taxes can be tracked across multiple sales channels. When it’s time to file and pay, TaxCloud can do so on your behalf, allowing you to focus more on sales and growth and less on tax administration.
No percentage-based fees
Unlike Stripe and other tax solutions that charge a percentage of each transaction, TaxCloud offers predictable, flat-rate pricing based on usage and service levels. Businesses aren’t penalized for growing sales volume. You’ll pay for the services you need, and not through a cut of your revenue.
With TaxCloud, pricing is cost-effective, transaction-based and scalable, making it an attractive option for businesses who want to maximize revenue without increasing tax compliance costs. A set number of annual orders are included in both the Starter and Premium plans, but users can purchase additional orders for higher volumes using a tier-based system.
Additional services, like returns filing, are also billed separately, so teams can pay for as many (or as few) automated returns as needed depending on where they sell and when they’re required to file.
Audit support when you need it
Sales audits are a reality for many businesses, even when everything is above board. When that time comes, having detailed, accurate tax records can make all the difference.
TaxCloud provides built-in audit support options to ensure that businesses have access to transaction-level details, historical tax filings, and compliance documentation at any time. When an audit occurs, our team can even help you gather and consolidate those reports so that the audit is handled efficiently.
Businesses using Stripe Tax will need to handle these and other inquiries on their own, as Stripe doesn’t offer audit support.
FAQ
TaxCloud and Stripe Tax have very different pricing structures. TaxCloud offers flat-rate pricing based on the number of transactions and the level of compliance services needed. Overall, it’s more predictable and cost-effective for a broader variety of brands and sales strategies.
Stripe Tax tries to offer the best of both worlds with their plans. The pay as you go plan charges 0.5% per transaction while the monthly plan is based on transactions and an annual contract. However, keep in mind that Stripe Tax’s fees are only part of the equation. Because Stripe Tax only works with Stripe, all transactions will also be subject to Stripe’s 2.9% payment processing fee and any additional surcharges from using the Stripe ecosystem!
Additionally, Stripe Tax doesn’t include tax filing or remittance, meaning that businesses will need to handle those tasks separately or via another service.
If you’re looking for a fully managed tax compliance solution, TaxCloud provides greater long-term value and cost savings when compared to Stripe’s percentage-based fees.
Yes, but TaxCloud provides better cross-platform coverage.
Because of how TaxCloud works, the service integrates with multiple e-commerce platforms, marketplaces, and payment processors, so businesses can consolidate tax data from multiple sources. This works whether you’re selling through Shopify, WooCommerce, BigCommerce, or a custom storefront.
Stripe Tax only works on transactions processed via Stripe (see the next question for more details). If you’re using a marketplace that allows transactions through Stripe and if you set up your checkout system to only allow that option, Stripe Tax can work across those platforms.
Stripe Tax only captures tax data for transactions processed through Stripe.
If you accept payments on other platforms, or through other payment processors (Square, PayPal, Authorize.net, Paddle, etc.) the tax data for those transactions won’t be visible with Stripe Tax. You’ll need to track, calculate, and report taxes for those transactions another way.
On the other hand, TaxCloud can capture and manage tax data across multiple payment methods and sales channels, which makes it a better fit if you’re processing payments outside of Stripe.
Only TaxCloud offers built-in exemption certificate management. With TaxCloud, it’s possible to collect and store exemptions, ensuring that exempt transactions are properly documented.
Stripe Tax doesn’t offer exemption certificate support directly but instead works with a third party solution to handle all exemption-related transactions.
Unfortunately, yes. Stripe Tax, Lemon Squeezy, and other products within the Stripe family can be very niche in how they function and in the services they provide.
For important steps like tax filing and exemption certificate verification, Stripe Tax’s own documentation suggests working with official, third-party partners in order to create a holistic solution.
This is notable, because many of the third party vendors that Stripe Tax relies upon are direct competitors with similar functionality to what Stripe Tax already provides!
You can also find some third-party sales tax solutions available for install directly via the Stripe Marketplace (marketplace.stripe.com). These might serve as a stopgap measure to fulfill any outstanding needs.
For comparison, TaxCloud offers a complete, end-to-end solution with no need for outside support.
TaxCloud handles both tax filing and remittance from within the platform, making it a fully managed sales tax compliance solution.
Once tax is collected, TaxCloud automatically files returns and sends payments to the appropriate state and local tax agencies. This makes it easy for businesses to remain compliant without manual effort.
Stripe Tax only calculates the correct tax amount at checkout, but it doesn’t file or remit taxes. Businesses will be responsible for filing and paying taxes themselves or using a separate service.