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Stripe wants to help internet businesses with tax compliance

Stripe is set to acquire TaxJar in a bid to help internet businesses with tax compliance

In recent times, local sales taxes applicable to online commerce have increased. The United States alone have more than 11,000 different sales tax jurisdictions. For internet businesses, accurately tracking, calculating, reporting, and filing taxes is a significant and growing burden.

Stripe, a global technology company that creates economic infrastructure for the internet, has a solution to this problem. On Tuesday, the company announced that it has agreed to acquire TaxJar, a leading provider of sales tax software for internet businesses. According to Stripe, one of the top requests from Stripe’s users over the past five years has been for assistance in navigating sales tax

“There’s a reason TaxJar has been a top choice for businesses: their software tools make it incredibly easy to handle sales tax. 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. And as a CFO, I’m delighted to welcome so many new colleagues who care deeply about taxes.” Dhivya Suryadevara, Stripe’s CFO
Dhivya Suryadevara - Stripe's CFO|Source: CNBC

TaxJar was launched in 2013, and the demand for its sales tax offerings has proliferated among internet businesses of all sizes.

“Like everyone at Stripe, we think every day about how we can help startups and multinational companies alike remove barriers to growing their business. 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.” Mark Faggiano, CEO of TaxJar

As the latest addition to Stripe’s revenue platform, TaxJar will help businesses 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.

The acquisition is subject to standard closing conditions, including regulatory approvals. TaxJar users can continue to use the company’s products directly.