How they work together to make your sales tax life easier
If you’re getting serious about your Amazon e-commerce business, you’ll have already got yourself dedicated cloud-based accounting software, like Xero or QuickBooks. Hopefully you’ll also have integrated A2X so you have timely, useable sales data and reporting at your fingertips. The next thing you need? Sales-tax software. The cold hard truth is that if you’re selling via Amazon FBA, at some point you’re going to be paying sales tax – and that’s when your life can get complicated, especially if you’re selling in the US.
Sales tax is a US tax, where a small percentage of a sale is added by the online retailer and passed on to the state. As an e-commerce retailer, it’s your responsibility to charge buyers, and pass on the correct amount of sales tax. Since the United States has multiple sales-tax authorities, that can be tricky, to say the least. Sales tax is primarily determined by something called ‘nexus’ – in other words, a connection to the state – which to Amazon FBA sellers may look like Amazon having a fulfilment centre in the state where your product has been purchased.
It can be a lot to keep track of – when to charge sales tax, how much to charge in each state, when sales tax is due – hours of work which, let’s be honest, can be better spent elsewhere. Like most things these days, a bit of clever software can make all the difference.
How TaxJar works
TaxJar is a simple, automated sales tax app that helps you make sure you know how much you owe. No more manual spreadsheets required – TaxJar takes care of all the tricky admin involved with sales tax, so you can get back to business.
When linked with Xero, it works by importing your order history, pulling out the sales tax collected and calculating how much sales tax you owe to each state, when and how often.
When you have TaxJar hooked up you’ll:
- Know exactly what you’ll probably be paying in each state based on whether it has an Amazon warehouse (aka sales-tax nexus)
- Work out if what you’ve been paying is correct
- Get a rough idea of what you might owe, if you’re not collecting at all
- Say goodbye to manually breaking down sales tax for each state – TaxJar will do it for you.
- Have your sales tax reports updated every day so you can stay on top of things, and file on time
How TaxJar and A2X work together
Together, A2X and TaxJar (along with Xero) are a triplet powerhouse of automation. When combined, these tools will help you to grow your e-commerce business effectively and efficiently, with data you can rely on. It’s the ideal back-office set-up for any e-commerce seller looking to take their business to the next level.
A2X has helped thousands of Amazon FBA sellers to better understand where their business is headed, with useable sales data and reporting. It works by arranging the data from Amazon and sending it straight into Xero or QuickBooks, where you can start using it. No more manual entry or guesswork. This data is then used by TaxJar to produce your sales-tax reporting. That also includes creating ‘bills’ in your Xero account, so you know when your sales tax is due and how much you owe.
Automation frees you up
Automation is the key to reducing stress around business finances, and keeping good records will help you better grow your business. A2X updates your accounting software with useable data from Amazon, and TaxJar updates Xero with the most up-to-date sales-tax totals. That means you’ll get peace of mind knowing you have a powerful and automated administration trio like A2X, Xero and TaxJar working together to keep your finances in check, while you get on with making dreams happen.