TaxCloud, a free sales tax management service for online retailers, stands ready to help retailers respond to the requirements of the Marketplace Fairness Act, which would allow states to require online retailers to collect sales tax. The bill moved closer to passage today as an amendment was successfully added to a Senate budget resolution by a bipartisan group of senators.
The Marketplace Fairness Act authorizes states with simplified sales tax laws to require out-of-state retailers to collect sales tax. Some have voiced concerns about the bill, but FedTax, home of TaxCloud, says that collecting sales tax doesn’t need to be either costly or difficult.
“There can be a middle ground where states receive the sales tax they’re due and it’s easy for retailers to collect that tax,” said R. David L. Campbell, FedTax CEO. “The Marketplace Fairness Act gives states the authority to enforce sales tax collection. TaxCloud helps those on the other side of the equation, the retailers.”
“TaxCloud was built specifically for online retailers,” Campbell continued. “We designed it to easily integrate with shopping carts and order management systems. It’s easy to use and set up, and it’s free.”
Hadar Paz, CEO of Powerfront, a leading e-commerce agency that has implemented TaxCloud on its clients’ websites, agreed. “We found it incredibly easy to integrate TaxCloud on our platform. Our clients are excited about TaxCloud because they don’t have to spend their time on complicated sales tax questions, and they’re really happy that they don’t have to pay anything to use it.”
Instead of charging a fee to use TaxCloud, the company receives a commission from states based on the sales tax it helps retailers collect.
Online retailers affected by the legislation would have to calculate the sales tax due, collect it, and remit it to states. TaxCloud, Campbell says, helps with every step of the process.
“We calculate sales tax for any location in the US during checkout,” said Campbell. “All the customer sees is the total amount of sales tax due—and if the customer is tax-exempt, we handle that as well. We check whether each item is subject to sales tax in the customer’s location, and we continuously update our rates and definitions so they’re always correct.”
When it’s time to prepare sales tax returns, TaxCloud is again ready to help. The service currently offers preparation and filing for the twenty-four states that are members of the Streamlined Sales and Use Tax Agreement. Other states that want to require online sellers to collect sales tax would also be required, under the proposed legislation, to certify free software such as TaxCloud for sales tax calculation and filing.
If customers prefer to prepare their own returns, TaxCloud’s reports make it easy. “If someone is preparing a sales tax return for California, for instance, all they need to do is download or print their California report for that month—all the information they need for the return is there,” said Campbell.
“Collecting sales tax should be easy, and it should be free,” he added. “That’s what TaxCloud is all about.”
FedTax, the home of TaxCloud, was founded in Seattle in 2008 to offer online businesses a free and easy way to calculate and collect sales tax. Today over 2500 retailers use TaxCloud to manage sales tax.
FedTax is headquartered in Seattle and has offices in Connecticut and Kansas.