Sales tax software for FreshBooks
In FreshBooks a sales tax is a rate you type in and attach to a service. Whether that service is taxable at all depends on the state, and the answer is not the same in every one. Commenda resolves it per state from your FreshBooks invoices, registers you, and files across 50 states and 70+ countries.
Trusted by global businesses
Resolve services taxability per state
FreshBooks sells a service and charges sales tax on it in 19 states, DC and the city of Denver. Services are taxable in some places and not others. Commenda resolves that per state from a tax code on each service you bill.
Calculate tax without typing rates
In FreshBooks a sales tax is a name and a percentage you enter yourself, and updating a rate means editing the invoices that already carry it. Commenda works the rate out from the client's address, down to county, city and district.
Monitor your global exposure
Nexus appears in no FreshBooks help centre article. Commenda measures your FreshBooks invoices against economic and physical thresholds in all 50 states and 70+ countries, and notifies you at 80%.
Coverage comparison
What does FreshBooks handle, and what comes back to you?
The filing row goes partly FreshBooks' way, because it does submit UK VAT to HMRC. Its figures come from its own Help Centre articles on how sales tax works, the Sales Tax Summary report, Making Tax Digital, the VAT Return report, and how Payroll pays your taxes, checked on July 30, 2026.
Whether your service is taxable in a state
- FreshBooks
- Not handled. You decide, then type in a rate and name it yourself
- Commenda
- Resolved per state from a tax code on each service, product or SaaS line
Working out the right rate
- FreshBooks
- Not handled. Rates are entered by hand, and up to two apply to a line
- Commenda
- Calculated per jurisdiction from the client's address, on every invoice
Knowing where you owe
- FreshBooks
- Not handled. Nexus appears in none of its help centre articles
- Commenda
- Economic and physical thresholds in 50 states and 70+ countries, with alerts at 80%
Registrations for collecting tax
- FreshBooks
- Not handled. It states it cannot complete registrations on a company's behalf
- Commenda
- Permits in all 50 states, EU VAT with OSS and IOSS, and GST across APAC and Canada
Filing your returns
- FreshBooks
- Partly. UK VAT goes to HMRC and payroll tax through Gusto. Sales tax does not
- Commenda
- Sales tax, VAT and GST filed across 50 states and 70+ countries
Remitting what you collected
- FreshBooks
- Not handled. The summary report tells you the number and you pay it
- Commenda
- Tracked per jurisdiction, on every filing
Exemption certificates
- FreshBooks
- Not documented. Exempting a client means leaving tax off the invoice
- Commenda
- Collected, validated, stored, and applied automatically where valid
| FreshBooks |  | |
|---|---|---|
| Whether your service is taxable in a state | Not handled. You decide, then type in a rate and name it yourself | Resolved per state from a tax code on each service, product or SaaS line |
| Working out the right rate | Not handled. Rates are entered by hand, and up to two apply to a line | Calculated per jurisdiction from the client's address, on every invoice |
| Knowing where you owe | Not handled. Nexus appears in none of its help centre articles | Economic and physical thresholds in 50 states and 70+ countries, with alerts at 80% |
| Registrations for collecting tax | Not handled. It states it cannot complete registrations on a company's behalf | Permits in all 50 states, EU VAT with OSS and IOSS, and GST across APAC and Canada |
| Filing your returns | Partly. UK VAT goes to HMRC and payroll tax through Gusto. Sales tax does not | Sales tax, VAT and GST filed across 50 states and 70+ countries |
| Remitting what you collected | Not handled. The summary report tells you the number and you pay it | Tracked per jurisdiction, on every filing |
| Exemption certificates | Not documented. Exempting a client means leaving tax off the invoice | Collected, validated, stored, and applied automatically where valid |
Calculate taxes globally on FreshBooks using Commenda
In FreshBooks you create a sales tax by typing a name and a percentage to three decimal places, then check it on the line. Up to two taxes can apply to one line, and a rate change means editing every invoice that already carries the old one. Commenda works the rate out from the client's address instead, and applies every layer that is due: state, county, city and district on the same line.
Track your global exposure from FreshBooks
A consultancy hires a developer in another state, sends someone to run a workshop, or puts a salaried employee near a client. Any of those can create an obligation in that state on its own, with no threshold involved. None of it shows up on an invoice, so no report built from invoices can see it. Commenda pairs your FreshBooks data with a short questionnaire on where your people actually are.
Automatically remit transactions around the world
The Sales Tax Summary gives you taxable amount and tax collected for sales, less the tax you paid on expenses and bills, on an accrual or cash basis, as a CSV or a print-to-PDF. Filing it is your job and so is the payment. Commenda builds the return itself from the same invoices, files across all 50 states, the EU with OSS and IOSS, and GST in Canada and APAC, and tracks remittance per jurisdiction.
Manage your customers and exemptions in one place
In FreshBooks, exempting a client means leaving the tax off their invoice. Certificates appear nowhere in its sales tax documentation, so the document itself lives in an inbox. Commenda collects certificates through a portal your clients upload to, validates each one, stores it against the client record, and applies it automatically in the states where it is valid. Expiries are chased before an auditor finds them.
Consolidation
Is the service you bill actually taxable?
Consultants and agencies often start from the assumption that services are not taxable. It holds in plenty of states and fails in others, and the failure is quiet: nobody sends an invoice back for missing tax, so the gap only surfaces at a sale, an audit, or a client's own review.
FreshBooks' own invoice proves services are sometimes taxable
FreshBooks sells a service, and it publishes where it has to charge sales tax on your subscription: 19 states, the District of Columbia and the city of Denver. Not zero, and not all 45 states that levy a sales tax. That list is the whole argument. Whether a service is taxable depends on the state and on what kind of service it is, and no consultant should be answering it invoice by invoice.
One invoice can carry two different answers
Agencies bill strategy, implementation, a software licence and a reimbursed expense on the same document, often on one line. Where a blended line combines a taxable and a non-taxable element, separating them into distinct product codes going forward usually produces the correct result. FreshBooks lets you attach up to two taxes to a line and leaves the classification to you. Commenda maps each service to a code that resolves per state automatically.
For a service business, the first trigger is usually a person
Economic thresholds are the well-known test, and most states set them at $100,000 of sales or 200 transactions in twelve months. A consultancy usually trips something else first: an employee, a contractor, or someone on site for a project in another state. Our nexus guide lists both tests state by state. Neither is visible in a report built from invoices.
Canada is not one tax, and FreshBooks is Canadian
FreshBooks' own billing page lists what it charges in each province: 5% GST in Alberta, 13% HST in Ontario, 15% HST in Nova Scotia and three other provinces, 12% in British Columbia as 5% GST plus 7% PST, 11% in Saskatchewan, and 14.975% in Quebec as 5% GST plus 9.975% QST. Six different structures on one page. Commenda registers, files and remits GST, HST and PST alongside US sales tax, from one place.
What it costs
What does FreshBooks cost, and which taxes does it cover?
FreshBooks publishes its prices in full and it genuinely files tax, which makes this table more interesting than a plain gap. The taxes it files are payroll and UK VAT. Sales tax registration, filing and remittance are not on the list at any tier.
| What you need | Where FreshBooks puts it |
|---|---|
| Invoicing, expenses and tax-time reports | Lite at $23 a month, capped at five billable clients |
| The Chart of Accounts and the accounting reports | FreshBooks states accounting features are only available on trials and the Plus, Premium and Select plans. Plus is $43 a month for 50 clients |
| Unlimited clients and project profitability | Premium at $70 a month. Select is quoted on request |
| Anyone else on your team | $11 a month per user, on every plan |
| Payroll tax filed and paid for you | FreshBooks Payroll at $40 a month plus $6 per user, powered by Gusto, covering Form 941, 944, W-2 and 1099 filings |
| UK VAT submitted to HMRC | Included. The MTD portal submits VAT returns directly once you authorise through the Government Gateway |
| Sales tax registration, filing or remittance | Not sold at any price. FreshBooks states it cannot determine tax requirements for businesses or complete registrations on their behalf |
| Sales tax FreshBooks charges you on its own subscription | 19 US states, the District of Columbia and the city of Denver, plus every Canadian province and territory, from 5% GST in Alberta to 15% HST in Nova Scotia |
Invoicing, expenses and tax-time reports
Lite at $23 a month, capped at five billable clients
The Chart of Accounts and the accounting reports
FreshBooks states accounting features are only available on trials and the Plus, Premium and Select plans. Plus is $43 a month for 50 clients
Unlimited clients and project profitability
Premium at $70 a month. Select is quoted on request
Anyone else on your team
$11 a month per user, on every plan
Payroll tax filed and paid for you
FreshBooks Payroll at $40 a month plus $6 per user, powered by Gusto, covering Form 941, 944, W-2 and 1099 filings
UK VAT submitted to HMRC
Included. The MTD portal submits VAT returns directly once you authorise through the Government Gateway
Sales tax registration, filing or remittance
Not sold at any price. FreshBooks states it cannot determine tax requirements for businesses or complete registrations on their behalf
Sales tax FreshBooks charges you on its own subscription
19 US states, the District of Columbia and the city of Denver, plus every Canadian province and territory, from 5% GST in Alberta to 15% HST in Nova Scotia
Figures verified on July 30, 2026 against FreshBooks pricing, FreshBooks Payroll taxes, Making Tax Digital and Does FreshBooks charge sales tax.
From the field
Trusted by businesses across the globe
“The platform works exactly the way I need it to. I have one team member who manages all of our exemption certificates, and that functionality has been particularly efficient for us. It allows him to handle everything seamlessly, making the handoff significantly easier.”
VP of Finance, TRX
Which sales tax software fits a service business?
Service businesses have a narrower shortlist than product sellers, because most sales tax tools are built around SKUs and shipping. We compare the options on coverage, ratings and real pricing, and we say where each one wins.
More sales tax resources
Guides from the Commenda team on physical presence, taxability by state, and Canadian tax registration numbers.
Frequently asked questions
No. Nexus is not discussed anywhere in the FreshBooks help centre, and a full-text search of its articles returns nothing for the word. FreshBooks reports on the taxes you created and applied, so a state you invoiced into without setting up a tax is counted nowhere. Most states start an obligation at $100,000 of sales or 200 transactions in a twelve-month window, with California and New York at $500,000, and physical presence can trigger one with no threshold at all. Commenda measures your FreshBooks invoices against each state's own rule, adds a questionnaire for physical presence, and notifies you at 80%.
Yes, two kinds, and neither is sales tax. Its Making Tax Digital portal submits VAT returns to HMRC directly once you authorise it through the Government Gateway, and it also shows past submissions, VAT liabilities and payment history. FreshBooks Payroll, powered by Gusto, calculates payroll taxes and submits payments and filings to the agencies, covering Form 941 or 944, W-2 and 1099. On registration it is explicit: FreshBooks Payroll cannot determine tax requirements for businesses or complete registrations on behalf of companies. For sales tax you get the Sales Tax Summary report, and filing and paying are yours. Commenda registers, files and remits the sales tax, VAT and GST returns themselves.
Often yes, and for a service business it is usually the first thing that matters. Physical presence creates an obligation in a state independently of how much you sold there, and it is not limited to an office. A remote employee, a contractor working on your behalf, someone attending an event, or inventory stored in the state can each be enough, and the exact rule differs by state. None of it appears on an invoice, which is why a report built from invoices cannot surface it. Commenda pairs your FreshBooks transaction data with a short questionnaire covering where your people and property actually are, and flags the states that answer creates.
It can, if the two parts have different taxability. Where a blended line combines a taxable element and a non-taxable one, splitting them into distinct product codes going forward usually produces the correct result, and you do not need to reissue historical invoices to fix the setup. FreshBooks lets you attach up to two taxes to a line and leaves the classification decision entirely to you. Commenda assigns a tax code per service and per SKU, so a licence and the consulting around it can be treated differently in the states that treat them differently.
You leave the tax off their invoice. Certificates are not part of FreshBooks' sales tax documentation, so the document that justifies the exemption ends up in an inbox or a shared drive, which is the part an auditor asks for. Commenda collects certificates through a portal your clients upload to, validates each one on upload, stores it against the client record, and applies it automatically in the states where it is valid. Where many clients probably qualify but have never sent anything, we run a batch request with reminders. Multi-state SST and MTC forms are accepted alongside single-state ones.
The same way it handles every other tax: as one you create, name and give a rate to. Its own subscription billing page shows why that is more work than it sounds, listing 5% GST in Alberta, 13% HST in Ontario, 15% HST in Nova Scotia and three other provinces, 12% in British Columbia as 5% GST plus 7% PST, 11% in Saskatchewan, and 14.975% in Quebec as 5% GST plus 9.975% QST. Because FreshBooks caps a line at two taxes, a province that stacks two is already at the limit. Commenda registers, files and remits GST, HST and PST alongside US sales tax from one place.
The UK part is handled and the rest is not. FreshBooks' VAT Return report is available to businesses that select United Kingdom in their settings, and its MTD portal submits to HMRC once you authorise through the Government Gateway. MTD has applied to VAT-registered businesses above £90,000 of taxable turnover since April 2019. What it does not cover is anywhere else: a US client, an EU consumer, or an Australian customer each sit outside it. Commenda handles those registrations and returns, and reclaims UK VAT input credits on eligible expenses pulled from your accounting integration as part of the same UK service.
Custom integration support for your business
A service business bills in shapes a product tool was never designed for: retainers, milestones, pass-through expenses and licences on the same invoice. We map how yours works, classify what you sell, and connect the sources that carry your revenue.
Indirect Tax
Monitor nexus exposure, register, file, and remit sales tax and VAT in one platform. Commenda keeps you compliant across 100+ jurisdictions.
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