WooCommerce Sales Tax Plugins Compared: Which is Right for You?
However, the platform’s integrated tax calculation and compliance features aren’t user-friendly or straightforward and don’t support the full sales tax compliance lifecycle – from sales tax calculation to sales tax remittance.
While WooCommerce has its own WooCommerce solution called WooCommerce Tax, it doesn’t track when stores achieve economic nexus in different states based on sales volume and are required to start collecting and remitting sales taxes in that state. That could leave your store exposed to unexpected tax liabilities.
Luckily, WooCommerce continues to develop its Marketplace offering third-party companies develop and release sales tax plugins that help with all of those things to ensure your store is always sales tax compliant. In this post, we’ll look at the best WooCommerce sales tax plugins for the U.S. so you can figure out which third-party WooCommerce tax plugin is right for your business
How Does WooCommerce Calculate Sales Tax?
WooCommerce’s native sales tax features calculate sales tax for you in a few different ways. First, they allow you to create product prices that either include tax or exclude tax. However, this feature is designed primarily for businesses who sell in locations where there is a flat countrywide tax like in the UK where there’s a 20% national sales tax. Including tax isn’t practical in the U.S. where each state charges a different sales tax rate and your business might not even have economic nexus in all of the states.
That means that U.S. based businesses will be configuring their pricing excluding sales tax. In that case, WooCommerce offers a few options for calculating tax. You can use the customer’s billing address, the customer’s shipping address, or your shop’s address. WooCommerce then calculates sales tax based on what the sales tax rate is in the location chosen. One problem: In the U.S. where you only have to charge tax where your business has an economic nexus, that could lead to many customers needlessly paying tax on your items. Using WooCommerce’s native sales tax calculation tools is therefore not a workable option for most U.S. businesses.
Does WooCommerce Automatically Calculate Sales tax?
In addition to WooCommerce’s native tax features, they also have a tax plugin that you can use if you need more support and automation with sales taxes called WooCommerce Tax, which requires Jetpack.
However, while WooCommerce promises that it will automate your sales tax calculation so you don’t have to worry about it, it also claims to use only your store address to do so. However, it’s your customer’s address and whether your business has economic nexus in their state that matters regarding sales tax calculation in the U.S.
WooCommerce’s users therefore need another WooCommerce sales tax solution customized specifically to the sales tax compliance complexity of U.S. taxes if they want true WooCommerce sales tax automation.
Manually Uploading Tax Rates in WooCommerce
In order to change the rates that WooCommerce applies to your customers to take account of where you have economic nexus or to update out-of-date rates, you have to manually upload tax changes in WooCommerce with a CSV file.
This requires that you monitor your sales tax nexus yourself, manually check sales tax rates, compile them in an Excel file and then manually upload them to WooCommerce every time there’s a sales tax change. This is time consuming and presents potential compliance risks from human error or oversights.
Here are the steps once you have your tax rates:
Once you’ve downloaded your CSV file with your tax rates (and this applies to any WooCommerce tax rates CSV file), go to the WooCommerce settings in the backend of your site and head to Tax -> Standard rates.
There you will find the button to “import CSV”.
Steps to Import
- Go to WooCommerce -> Settings -> Tax -> Standard Rates
- Click on the “Import CSV” button
- Select the CSV file that you want to upload
- Click on “import”
Please note, on some hosting setups, the file may take a few minutes to fully import.
5 Most Popular WooCommerce Sales Tax Plugins
In this section, we’ll review the best sales tax plugins for WooCommerce focused on U.S. taxes so you can understand what each offers and what kinds of businesses they’re best for.
1. Simple Sales Tax Plugin (by TaxCloud)
Link: TaxCloud Simple Sales Tax
Pricing: Available only on Premium: $79/month.
Overview: TaxCloud is a WooCommerce tax plugin that easily integrates with WooCommerce to automate your sales tax calculation in all 13,000+ sales tax jurisdictions in the U.S. TaxCloud also monitors your progress towards sales tax nexus in all states and can even complete your sales tax registration in any states you achieve nexus in. TaxCloud also is able to collect the right amount of sales taxes from every customer based on their exact location, file automatic returns for you, and even help with any sales tax audits that come up. TaxCloud is a Streamline Sales Tax certified service provider and provides some free and discounted sales tax services.
Benefits: TaxCloud doesn’t just make sales tax simple by providing full WooCommerce sales tax automation, it’s also cheaper than most WooCommerce tax plugins and provides hands-on and timely U.S.-based customer support via chat, email, and phone support.
Best for: E-commerce businesses of all sizes who need sales tax support in the US.
What customers say:
“Very positive experience, it’s easy to talk to the same people any time you have an issue, and not be bounced around through different employees. As the sole developer in a small ecommerce shop, I was in charge of selecting a company to handle our sales tax compliance. I like TaxCloud because they are inexpensive and also because their API is not needlessly complex.” – Justin
2. Avalara AvaTax for WooCommerce
Pricing: Avalara doesn’t offer clear pricing, as the final cost depends on factors such as order volume, product types, selling locations, and required features. Based on our research, the cost for a relatively small eCommerce store starts at a minimum of $1,000. Check out our deep dive: How Much Does Avalara Cost?
Overview: Avalara AvaTax is a cloud-based sales tax plugin for WooCommerce that integrates directly with WooCommerce and helps businesses calculate sales tax accurately across all jurisdictions around the world.
Benefits: Avalara is known for supporting larger ecommerce companies in managing sales taxes in multiple countries and global jurisdictions. Avalara also supports businesses in sales tax registration in jurisdictions where they’re required to register.
Downsides: Avalara is more expensive than other WooCommerce sales tax plugins and despite having 60,000 installs it’s software has a low rating of 2.5 stars out of five. Reviews talk about repeated issues with tax data accuracy when the order status is updated, difficulties with support, and new plug-in updates causing issues for customers.The company has also been closing its products and services aimed at small ecommerce businesses to devote more time towards supporting large multinational businesses. They are also known for slow and unresponsive customer service.
Best for: International medium to large businesses.
What customers say:
“Support is difficult to interact with. 2.8.3 introduced an error in certain cart conditions where sales tax was not charged to the customer but logged in AvaTax – costing over $2,000 in one month alone.”
See how TaxCloud compares with Avalara.
3. TaxJar for WooCommerce
Pricing: Available only with TaxJar Professional: $1,069 annually. Explore a detailed review of TaxJar pricing.
Overview: TaxJar is a cloud-based WooCommerce sales tax plugin that’s run by Stripe and focused on sales tax compliance in the U.S.
Benefits: TaxJar helps small-to-medium businesses in the U.S. with many aspects of sales tax compliance including sales tax filing and calculation.
Downsides: Since TaxJar was bought by Stripe, many customers have complained about TaxJar’s customer service, specifically about it being harder to get a response and support. They also don’t support things like audits.
Best for: Small businesses.
What customers say:
“We had many issues with TaxJar like late filings which incurred penalties, incorrect tax filing resulting in $5700 more paid in taxes, complexities around state onboarding, and non-existent customer support. Numeral provided complete onboarding, prompt customer service, rapid feature additions based on customer input, and so much more.”
See how TaxCloud compares with TaxJar.
4. WooCommerce Quaderno – Tax Automation
Pricing: Varies based on features, support, and customizations but their site says that up to 250 transactions per month and 3 jurisdictions costs $49/month.
Overview: Quaderno is a global WooCommerce sales tax plugin that isn’t available in the WooCommerce marketplace but can be integrated into your WooCommerce store manually. Quaderno helps large multinational businesses comply with sales tax laws in every jurisdiction around the world.
Benefits: Quaderno is able to give companies that sell in multiple jurisdictions the peace of mind of knowing that they’re always compliant with sales taxes no matter where they’re selling. They also track economic nexus for businesses in all jurisdictions. Their services are particularly designed with SaaS companies in mind though they help companies of all kinds.
Downsides: Companies that only sell in the U.S. don’t need the scale of services that Quaderno offers just to manage U.S.-based taxes.
Best for: Global enterprises.
What customers say:
“As we started approaching thresholds for various regions around the world our SaaS needed a way to calculate the taxes for each region and track them. We looked at some other tools but many of them were only targeted to one country. Quaderno lets us calculate EU and US taxes and other regions and tells us as we’re approaching thresholds in each country which is great.”
5. Stripe Tax for WooCommerce
Pricing: Varies based on features and volume. Based on our research, it looks like it will cost $1,000 to $1,500.
Overview: Stripe Tax is an end-to-end tax solution that helps businesses calculate and collect taxes globally and then file returns automatically in every jurisdiction.
Benefits: Stripe Tax helps large multinational businesses calculate tax, GST, or VAT in countries around the world and uses a team of partners to help with global tax filing and U.S. tax registration.
Downsides: Stripe Tax’s outsourcing of some services to global partners could result in challenges getting help if something goes wrong or uneven service across jurisdictions. For businesses only selling in the U.S., it also provides more services than needed. .
Best for: Global enterprises with complex setup.
What customers say:
“Stripe Tax handles all the logistics required for accurately charging our customers. It’s as simple as inputting the customer’s info, and Stripe processes the required tax rates and details.”
Best Sales Tax Plugin for WooCommerce
TaxCloud is the best WooCommerce sales tax plugin for ecommerce companies looking to streamline their WooCommerce sales tax compliance. Rather than manually upload all your sales tax rates to WooCommerce every time there’s a change in your nexus status or sales tax laws, TaxCloud can automate your sales tax compliance from calculation to remittance.
TaxCloud’s WooCommerce tax plugin can:
- Provide full WooCommerce sales tax automation
- Calculate sales tax in WooCommerce
- Monitor your tax nexus status in every jurisdiction and flag when you pass sales tax nexus thresholds
Additional services TaxCloud can provide:
- Complete your sales tax registration in states where you achieve nexus
- Complete your tax filings
- Support you through audits