Stripe, a global payments platform provider, has acquired TaxJar, which makes sales tax software for internet-based businesses.
Financial terms of the deal were not disclosed.
Local sales taxes applicable to online commerce have proliferated in recent years driven by the Wayfair decision and the effects of the COVID-19 pandemic. For internet businesses, accurately tracking, calculating, reporting and filing taxes is a large and growing burden. Stripe reports that one of its top requests from 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,” said Dhivya Suryadevara, Stripe’s CFO, in a statement. “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.”
Stripe provides what it calls an “economic infrastructure for the internet.” The addition of TaxJar will add the following automation capabilities:
- 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; and,
- Evaluating a company’s products and suggesting the right product tax code using artificial intelligence.
Stripe expects to continue acquiring businesses to help expand its platform capabilities. The company has specifically set its sights on creating a suite of tax tools that the many commerce companies that utilize Stripe can offer their customers.
“Like everyone at Stripe, we think every day about how we can help startups and multinational companies alike remove barriers to growing their business,” said Mark Faggiano, CEO of TaxJar, in a statement. “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.”
The acquisition is subject to standard closing conditions, including regulatory approvals. TaxJar users can continue to use the company’s products directly.
