11 best sales tax software for Amazon FBA

Introduction

Tax compliance is critical in business, but it can be particularly difficult for Amazon FBA sellers due to the sprawling network of storage and shipping facilities that create a nexus for sales tax requirements. With more growing jurisdictions shifting the responsibility of collecting sales tax for Amazon through marketplace facilitator laws, sellers still have the headache of registering, filing returns, and dealing with exemption certificates in other areas. This all leads to a major problem: an overwhelming amount of paperwork keeps mounting due to unending product eligibility rules or interstate rates.

Sales tax software has stopped being a luxury for sellers that use the Fulfillment by Amazon (FBA) service, as now it has become crucial in automating tasks like managing exemptions and filing returns. Businesses are now able to free themselves from stringent compliance burdens while saving hundreds of hours and minimizing auditing risks.

Why Amazon FBA Sellers Need Specialized Sales Tax Software

Nexus in Abundance 

More than 30 states have at least 110 of Amazon’s fulfillment centers and warehouses. Each center where you keep stock can create a physical nexus, meaning you will be required to collect sales tax in that state. Even without any inventory, there is a possibility of generating economic nexus due to high-value interstate sales with a threshold of as low as $100,000 in annual sales or 200 transactions. Tracking these thresholds manually across states is impossible.  

Marketplace Facilitator Laws  

E-commerce marketplace facilitators, like Amazon, are obliged to tax third-party sellers in more than thirty states. This means they will not sell clothing on their website but will collect tax on behalf of other sellers using this platform.

In other states, sellers need to:

• Register in States where facilitated collection doesn’t take place.
• Provide detailed returns on filed reports capturing the collected tax.
• Reconcile reporting/refunds and corresponding taxes.

Collecting Taxes by Jurisdiction  

Every taxing authority sets its own  

• Distinct zip codes scoped within each jurisdiction covering boundaries charge different imposed taxes.
• Some would exclude certain types of goods, for instance, clothing, while others do include it.
• Exemption/certificate requirements, whether resale, manifesting, or non-profit status.

Such territories might lead to automating processes, making the failure of collecting less damaging (leading to penalties) while gaining Customer Trust because relations won’t be broken through loyalty conceiving collapse and attrition, damaged economies.

Key Features to Look for in Amazon FBA Sales Tax Tools

While considering tools for Amazon FBA sales tax, make sure the software provides:  

Multi-State Nexus Tracking:  

Determines and notifies you of your physical or economic nexus across all states. Alerts inform you when certain thresholds are reached.  

Amazon Seller Central Integration:  

Provides automated retrieval of orders, refunds, and taxes that are collected on the marketplace from your Amazon account into the system.  

Automated Reporting & E-Filing:  

Allows creation and electronic filing of state returns and local returns monthly, quarterly, or annually- automatically without manual work for data entry. Automated reporting streams taxes promptly during pre-defined intervals without requiring user input.  This stream helps manage multiple overtaxes simultaneously without risking underpayment.   

Exemption Certificate Management:  

The issue, validate as well and collect resale certificates and store them centrally in a secured vault for customer resale exemption documents, which simplifies management processes.

Real-Time Rate & Rule Updates:  

Automatically updates with new rate inserts as laws are passed within various regions at the state level, providing seamless regulation adherence.

Detailed Audit Trails & Compliance Dashboards:  

Logs containing calculations alongside certificate status as well as filing history are maintained, which aids in auditing and internal reviews, alongside corroborative documentation supporting scrutiny-enhanced evaluations.  

11 Best Sales Tax Software for Amazon FBA

1. Commenda:

Overview: Commenda itself has an end-to-end global sales tax platform boasting features such as exemption automation involving automatic filing of claims, together with automation of nexus detection, turning these complex actions effortless through pre-built logic module structures.

Main Benefits:

• Monitoring the nexus for over 50 U.S. regions is automated.
• Real-time ZIP-code-based rating system
• Amazon’s direct interface with daily sync of data.
• A data vault for certificates of exemption with alerts on the auto-expiry of certificates.
• E-filing services for state submissions and reports, marketplace-collected reports.

 Pros:

• Enterprise-level protection (SOC 2 compliant).
• Unlimited filing jurisdictions and nexus states.
• Tax specialists provide dedicated team support.

Ideal For: Advanced FBA businesses operating in several states and marketplaces. Mid-sized or larger.

2. Avalara AvaTax & Returns

Overview: Automates filing sales taxes as well as use tax, communications tax, VAT, etc.

Main Benefits:

• Tax rate calculation in real time using APIs
• Return preparation and filing automation for US states and Canadian provinces.
• Management of exemption certificates through CertCapture
• High-risk cases manual “expert check” option available.

Pros:

• Global coverage for taxes is extensive,
• Amazon, ERP, and POS systems have deep integrations
• Cost-saving promotional offers such as a 15-month subscription billed at the rate of 12 months,

Cons:

• Implementing these solutions can pose great difficulty to non-technical teams,
• Highly transactional volume businesses may incur significant per-transaction costs on fee structures,

Pricing: Starting plans are offered at $50/year plus applicable fees to be used.

Ideal For: Businesses looking for robust compliance will acquire expert revisions with additional resources provided.

3. TaxJar  

Overview: One of the easiest options for online sellers in the U.S. is TaxJar, which specializes in sales tax automation.

Key Features:

• Alerting about the automatic nexus when economic thresholds are reached
• One-click integration with Amazon Seller Central 
• State return generation and e-filing with AutoFile
• Smart suggestions on product tax codes.
• Exports non-integrated channel data into CSV files.

Pros:

• Ease of use through an intuitive dashboard tailored for non-tax specialists.  
• Transparent pricing models based on order volume without hidden fees and taxes.  
• 30-day trial period to experience the service, along with assistance to set up an account.

Cons:  

• International VAT/GST services are not offered directly as stand-alone options.  
• Limited features concerning exemption certificates.

Pricing: 

Starter: $19/month when capped at 200 orders

Professional: $99/month (up to 1000 orders) 

Ideal For: Small-to-medium American FBA sellers who primarily focus on compliance with domestic regulations. 

4. Sovos Taxify  

Overview: Indirect flexible tax platform Sovos Taxify covers US sales tax alongside international VAT, e-invoicing, and more, while also offering COVID-19 relief for impacted businesses.

Key Features:

• Calculation of sales and use tax for US transactions, along with returns submission. 
• Value-added tax (VAT) reporting, fiscal reporting, and other compliance services for more than sixty countries.
• Global compliance mandates on invoicing delivered electronically.
• Rules engine for marketplace facilitator compliance. 
• Audit defense tools and storage.

Pros:

• Manages complicated multi-region requirements.
• No-charge filing assistance supporting businesses impacted by COVID-19.
• Enterprises such as Home Depot and CVS trust the service.

Cons:

• Small sellers have higher costs. 
• Full utilization requires setup, training, and onboarding processes. 

Pricing: Starter $47/month, Standard $97/month, Premium $247/month

5. A2X Accounting 

Overview: Tax reporting modules enable A2X to sync Amazon and Shopify data into accounting platforms.

A2X Key Features

Overview: Daily summaries of Amazon settlements are mapped to ledger accounts, providing reconciliation.

Key Features:

• Reports detailing VAT, GST, and sales tax separation.
• Advanced taxes through the A2X Expert module.
• Integrations: Xero, QuickBooks Online

Pros:

• Automated accuracy in e-commerce revenue, e-recording, and taxation.
• Dynamic account mapping per client’s specifications.
• Manages multiple marketplaces at a single account level.

Cons:

• Return e-filing paired with a tax tool is required due to the absence of direct provision from the platform.  
• Focuses more on accounting rather than direct compliance features.

Pricing:  

Mini $19/month, Basic $39/month, Professional $69/month, Advanced $99/month

Ideal For: Sellers focusing on seamless integration with highly consolidated accounting systems, coupled with consolidated tax reports.

6. Quaderno

Overview: For digital commerce like FBA sellers engaging in international sales, automation tax compliance with Quaderno is a neat fit.

Key Features:

• Over 100 countries’ VAT, GST, and EU MOSS automation compliance reporting.
• Tax-compliant invoices with local tax identification numbers.
• Capture exemption certificates for non-EU clients.
• Real-time tax on checkout JavaScript or API calculation.

Pros:

• THE EU VAT/GST system is highly developed.
• API provides options to build custom workflows, which encourages innovation among developers.
• Invoice and subscription platforms charge real-time taxes.

Cons:

• Basic support on U.S. state sales taxes.
• Fees per transaction apply.

Pricing: Basic $49/month + $0.10 per transaction, Pro $249/month + $0.05 TX

Best Fit: FBA sellers focusing on significant cross-border sales or dealing in digital products that the rest of the world needs are best placed here.

7. Vertex Cloud Indirect Tax

Overview: Vertex offers enterprise-level automation solutions for indirect taxes like U.S sales and use tax, VAT, and ICMS from Brazil

Key Features:  

• Comprehensive rates database for the U.S. and other jurisdictions across the world.  
• Nexus analytics and threshold monitoring.  
• Automated returns with e-file options.  
• Exemption certificate oversight and authenticity checking.  
• Integration with ERP systems, SAP, Oracle, and even Magento e-commerce platforms.

Pros:  

• Best suited for intricate tax situations and high transaction activity. 
• Comprehensive audit logs as well as compliance documentation are available.  Round-the-clock international customer service.

Cons:

• Significant cost and time for setup.  
• Not suitable for smaller sellers or mid-market businesses.

Pricing: Customized enterprise-level pricing

Best For: Large FBA enterprises using integrated ERPs and intercompany systems crosslinked with corporate ERPs.

8. TaxCloud

Overview: TaxCloud has a freemium approach for U.S. sales tax calculation with paid options for filing returns.

Key Features:

• Free real-time rate verification and computation of taxes through API integration.
• E-filing for all states at $25 per return.
• Management dashboard for Nexus tracking.
• Storage for reseller and exemption certifications.

Pros:

• Startups will benefit from no-cost tax calculations.
• The pay-per-file payment structure is flexible.
• Discounts are provided to non-profit organizations. 

Cons:

• Basic user interface with a few advanced features.
• No support outside the United States.

Pricing: Free calculation; $25 per filing

Ideal For: Startups and non-profit organizations in the U.S., specifically nonprofits with low budgets.

9. Taxamo 

Overview: For sellers of digital goods or products shipped from the EU, Taxamo takes care of various compliance issues such as EU VAT MOSS, digital service taxes, and cross-border relief. 

Key Features:

• Compliance with EU VAT MOSS for digital services
• Multi-country reporting and invoicing in the EU. 
• Generation of invoices featuring local VAT numbers.
• Custom e-commerce integration APIs.

Pros:

• Thorough understanding of taxation on digital services in Europe
• Transaction-based tax collection systems
• Acceptance of customer VAT number authentication

Cons:

• Limited functionality for U.S. sales tax
• Geared towards digital services providers without a focus on physical goods

Pricing: Custom/transaction volume  

Ideal For: FBA sellers concentrating on international cross-border trade from the EU, often selling digital products or services alongside physical products

10. Exactor

Exactor is a cloud-based US sales tax automation solution created for e-commerce businesses and online marketplaces. 

Key Features: 

• Rate engine with ZIP-level accuracy
• Economic nexus monitoring
• Automated returns generation and e-filing
• Exemption certificate capture and auto-validation

Pros:

• Quick deployment for compliance within the U.S.
• Straightforward pricing model
• Audit-ready reporting

Cons:

• Does not cover international VAT or GST taxation
• Limited vendor options

Pricing: From $99/month

Ideal For: Exactor is designed for burgeoning FBA sellers who require automated, robust solutions for sales tax issues in the US.

11. ONESOURCE Indirect Tax (Thomson Reuters)

ONESOURCE Indirect Tax is aimed at large corporations offering direct compliance and governance functionalities on indirect tax determination.

Key Features:

• Comprehensive U.S. and global rate database 
• Real-time tax determination API Automated
• Seamless ERP integrations (SAP, Oracle, Infor) 
• Exemption certificate lifecycle management

Pros:

• Enterprise-grade functionality comes with ONESOURCE support unmatched by many.
• Global coverage, including Brazilian ICMS and Indian GST, makes it ideal for multinationals.
• Extensive customization makes it useful even for companies with very complex tax needs.

Cons:

• Significant licensing cost coupled with implementation investment poses a challenge to SMBs.
• These taxes are designed primarily for larger employers, meaning smaller businesses are overlooked completely. 

Pricing: Tailored quotes offered to suit enterprise clients

Ideal For: Served by aggregators with lower turnover rates, subsidiary-focused franchised brands selling internationally gain expansion leverage through global indirect taxation coverage, marketed towards larger parent companies.

Comparison Table

Commenda – Best for Automated Multi-State Compliance

An exceptional option for Amazon FBA sellers requiring fully automated, hands-off multi-state sales tax processes is Commenda. This platform continuously monitors the inventory locations and sales against economic or physical nexus thresholds in every U.S. jurisdiction and notifies you the minute a registration trigger is crossed.

With daily downloads of sales and inventory data from Seller Central, Commenda automates the ZIP-level tax rate application and product taxability rules and then creates ready-to-file returns for all required states and localities. Meanwhile, an exemption certificate vault built into the system supports you in capturing, validating, and renewing resale and other certificates, so you never miss tax-free sales because of missing documentation.

Designed with SOC 2 security and backed by tax experts, Commenda reduces manual work by 90+ percent and diminishes audit risks so you can spend more time growing your Amazon business rather than dealing with spreadsheets and state tax codes.

FAQs: Sales Tax for Amazon Sellers

Q. Should I register for the states where Amazon collects tax?  

Yes. Even though in many states Amazon collects marketplace-remote tax on your behalf, you still need to register, file informational returns, and reconcile Amazon’s collections with your sales data.  

Q. What if I sell on other channels as well?  

Select a multichannel integrated software (Commenda, TaxJar) or one that offers robust CSV import functionality to capture all consolidated sales, refunds, and marketplace tax transactions in one system.  

Q. Can these systems assist with backdated filing?  

Most platforms (Commenda, Avalara, Sovos) have the ability to generate delinquent returns for prior periods filed and provide late-filing calculations.  

Q. Which states require FBA seller registration?  

Any state where you maintain an inventory location or meet economic nexus thresholds, most of this software will notify you when the thresholds that mandate registration are met.   

Q. Can I eliminate manual review entirely?  

Automation takes care of rate calculation, certificate management, and preparation of returns. Manual review from expert check services on high-risk transactions may be required for exempted transactions.