Shopify Tax vs. Shopify Tax + TaxCloud: Should You File Alone or with a Partner?
Shopify Tax is the default tax platform included in every Shopify store and is set up to handle tax calculation, nexus tracking, and filing for Shopify merchants. However, as your business grows and compliance gets more complex, pairing it with a dedicated filing partner like TaxCloud gives you volume filing discounts, SST filing support, and registration help when you need it.
Shopify Tax
Shopify Tax + TaxCloud
Up to max of $5,000/year per region, per store
From $199 (Starter plan) to $799 (Premium plan)
First $100,000 in sales: Free. After $100,000 in sales: 0.25%-0.35% per transaction, capped at $0.99 USD.
Starter plan up to 1,200 or Premium plan up to 2,400
Feature Comparison
Shopify Tax
Shopify Tax + TaxCloud
Limited
Opt-in only
Basic, Grow, and Advanced plans: $75/filing. Plus plan: $50/filing.
$39/filing
Basic, Grow, and Advanced plans: $3,750 (est.). Plus plan: $2,500 (est.).
$599/month
Starting $99/month
AI-focused
Human-powered support
Why TaxCloud?
Consolidated nexus calculations
Shopify Tax only calculates tax on transactions made on the Shopify platform and on Shopify sales made through Shop and Meta channels (Facebook and Instagram). However, Shopify Tax won’t calculate or track sales and transactions from other platforms. That’s a problem for multi-channel sellers, because tracking nexus requires a view of all total sales transacted in a given state.
By contrast, TaxCloud consolidates your sales across all platforms at no extra cost to track economic nexus and notify you when you reach the nexus threshold for a state. Although TaxCloud still uses the calculations created by Shopify’s tax engine, built-in integrations allow users to pull data from other platforms, combine those details, and track everyone in one place.
Support for the SST program
Streamlined Sales Tax (SST) is a program that streamlines sales tax and allows free tax filing in 24 states. However, free filing is only available to companies who partner with a Certified Service Provider (CSP) like TaxCloud.
Unfortunately, Shopify isn’t a CSP with the SST program, meaning that merchants using Shopify Tax won’t be able to participate in the program or take advantage of those benefits. However, it’s possible for merchants to use Shopify Tax to calculate totals and then file with TaxCloud to take advantage of SST filing and other services.
Chat and phone support on all tiers
While Shopify offers 24/7 automated support, it can be difficult to get in touch with a real human who knows enough about taxes to help you sort out nexus and filing confusion.
TaxCloud support is human-powered, friendly, and accessible. Our experts typically answer within a couple of hours and can fully address questions about the platform, nexus, filing, and more. TaxCloud even assigns a dedicated customer success rep to Premium plan members and offers both free and paid onboarding options to guide them through their TaxCloud journey. However, even without those optional upgrades, teams can get in touch and get a helping hand from a knowledgeable support specialist.
What you get with TaxCloud
Seamless Shopify integration
TaxCloud connects directly to your Shopify store using a native, plug-and-play integration that pulls in order and tax information automatically. No development, customization, or manual export is required. Our system works alongside Shopify Tax to handle filings based on your existing checkout calculations. Integration is quick, reliable, and a perfect fit for growing Shopify brands.
Growth-friendly filing subscriptions
As brands expand into new states, filing obligations (and costs!) being to stack up quickly. In most cases — including with Shopify Tax — additional filings incur added costs. TaxCloud mitigates this by offering a filing subscription that lowers the per-filing cost when you file more. Companies selling nationwide can also file with the nationwide filing plan, which covers every state for a flat rate.
Effortless state registration
As you grow you need to keep an eye on registration, registration with state authorities must be done manually. All of that changes with TaxCloud. Our platform will alert you when you need to register due to nexus obligations and can even complete that registration for you. Using this approach, you’ll never have to worry about registering preemptively or missing a registration obligation altogether.
No more multi-channel tracking
Shopify Tax is a powerful tax engine, but it only works for Shopify. Multi-channel vendors need to manually track and calculate their nexus obligations internally, because marketplace calculators can’t see data across all channels. This can place a heavy administrative burden on finance teams who are trying to manage tax information from multiple channels and platforms. With TaxCloud, all of this is automated, and no manual adjustments are required.
Audit support when you need it most
When flagged for an audit, teams need to respond to state inquiries, prepare documentation, and coordinate with auditors to reach a resolution. It’s a time-consuming process that can eat into labor hours and cause delays in other parts of the business. While Shopify provides tax calculations and filing options, they don’t offer support in the event of an audit. With filing with TaxCloud, you’ll have the option to add audit support and receive guidance from in-house experts. Our team can help you gather all necessary information and assist with any reconciliations.
Frequently asked questions
Shopify Tax streamlines U.S. sales tax compliance with address-based rate calculations, nexus tracking, and detailed reports — all built directly into Shopify. Since 2024, Shopify Tax has included automated sales tax filing, which might lack for some businesses advanced compliance features such as real-time API capabilities, off-platform economic nexus tracking, and audit support. Additionally, since it only works within Shopify, it may not be ideal for businesses selling across multiple platforms.
In contrast, if you add TaxCloud as sales tax compliance and filing partner to automate you will have a sales tax piece of mind. TaxCloud offers a suite of basic and premium API integrations to connect your sales tax data with your e-commerce platforms, accounting software, and payment processors, ensuring a seamless and scalable compliance experience.
Shopify Tax includes automated sales tax filing for transactions made on the Shopify platform. In some cases, it’s possible to upload transactions from other platforms and use Shopify’s automated filing to handle that.
However, roughly half of U.S. states require that the transaction be assigned to a specific marketplace during remittance. If those requirements are in place, Shopify can’t file on your behalf. When that happens, businesses need to download their sales tax data and either file manually or hire a tax professional to handle their returns. Shopify Tax also lacks audit support and advanced reporting tools for multi-state compliance.
With TaxCloud, Shopify’s tax engine still calculates tax, but the data is pulled into our systems for consolidation with tax data from other platforms. From there, TaxCloud offers fully automated filing and remittance for all states, along with comprehensive compliance support, including audit assistance and nexus tracking.
Pricing starts at $39 per state per month or $599 for nationwide filing, ensuring cost-effective, hassle-free compliance as your business grows.
It’s less a question of reliability and more a question of scope.
Shopify Tax is excellent at what it does, but it’s limited in scope because it’s part of the Shopify ecosystem. For very small businesses, single-channel merchants, or businesses only selling in their home state, Shopify Tax may be enough. However, as a company grows and tax obligations increase in complexity, Shopify Tax lacks the scope to facilitate that success.
TaxCloud integrates with Shopify Tax and other merchant platforms to bring all tax compliance and obligations under one roof. This gives merchants a realistic view of their tax situation and allows for more accurate data tracking. We also provide advanced compliance features, including economic nexus tracking and audit support, so teams have all the tools they need to keep filings accurate and compliant.
Shopify Tax does not provide training on its tax offering. Users need to set up Shopify Tax, manually register with states where they might exceed nexus obligations, and then configure Shopify Tax to handle those filing obligations.
On the other hand, TaxCloud offers a dedicated onboarding team, support materials, onboarding webinars, comprehensive documentation, and a human-powered customer success team able to provide training and answer questions.
Yes and no. Shopify Tax is an essential part of the Shopify platform. If you’re selling on Shopify, you can’t avoid it without switching to a manual configuration — and you probably shouldn’t. Even at TaxCloud, we rely on Shopify Tax’s calculation engine to configure tax for Shopify sales.
While Shopify Tax provides a solid foundation for businesses starting their e-commerce journey, it doesn’t offer a great solution for multi-channel sellers or brands with complex tax needs.
As your business scales and your compliance requirements become more complex, partnering with TaxCloud ensures access to advanced functionalities such as detailed jurisdictional reporting, economic nexus monitoring, and seamless integration across multiple e-commerce platforms.
However, it’s worth pointing out that TaxCloud integrates and partners with Shopify Tax and supplements some of the features that Shopify provides. Although we utilize our own, independent tax engine in other scenarios, we rely the calculations that Shopify Tax provides when pulling data from the Shopify platform.
