Global payments company Stripe is adding a new tool to its solutions for online customers – tax preparation services.
Stripe will acquire TaxJar for an undisclosed sum. The transaction is expected to close pending regulatory approvals, the company said in a statement Wednesday.
TaxJar provides sales tax automation software for internet businesses.
Founded in 2013 by Mark Faggiano, Ryan Thompson and Matt Anderson, TaxJar employs approximately 200 people. Stripe said TaxJar customers can continue to use the company’s products directly.
With e-commerce and internet-based sales becoming a global business, sellers are faced with complicated tax issues, including paying varying rates across states and countries. TaxJar automates these processes, allowing businesses to easily track, calculate, report and file taxes. Stripe said one of the top requests it receives from customers is help in navigating the sales tax landscape.
“There’s a reason TaxJar has been a top choice for businesses — their software tools make it incredibly easy to handle sales tax,” said Dhivya Suryadevara, Stripe’s CFO, in a statement. “With TaxJar, we will help millions of internet businesses running on Stripe with their sales tax and make it easier for them to sell internationally.”
Stripe offers payment solutions as well as handling common administrative tasks for businesses. Its Adaptive Acceptance feature uses machine learning to retry network declines in real time, helping improve acceptance rates. In addition, Stripe Billing provides more than 100,000 businesses — including Atlassian, Slack, Smartsheet and DoorDash — with a series of micro-optimizations that help increase revenue and cash flow and, by intelligently suggesting the right payment methods including direct bank debits, ensuring hosted invoices get paid three times faster than traditional invoices.
Stripe said the addition of TaxJar will allow its customers to automate tasks such as:
- Providing accurate sales tax rates at checkout, tied to the exact street address of the customer.
- Automatically submitting tax returns to local jurisdictions and remitting the sales tax collected.
- Producing local jurisdiction reports to show sales and sales tax collected — not only for each state but for relevant counties, cities and other special jurisdictions.
- Evaluating a company’s products and intelligently suggesting the right product tax code.
Stripe added that it plans to create a suite of tax tools for business platforms that can be offered to their customers.
“Like everyone at Stripe, we think every day about how we can help startups and multinational companies alike remove barriers to growing their business,” said Mark Faggiano, CEO of TaxJar. “And what that means is making the complicated work of sales tax compliance as straightforward as possible. We know that to grow the GDP of the internet, compliance is critical. We couldn’t be more excited to join Stripe and help power millions of businesses around the world.”
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