Sales Tax Fundamentals
Get up to speed on the basics of sales tax
Jane.com is a curated, commission-based women’s boutique marketplace with 2,000+ active sellers and 400+ new products added daily.
As a marketplace facilitator, Jane.com was directly affected by the 2018 South Dakota vs Wayfair Supreme Court ruling that said states could set economic nexus thresholds. VP of Finance Anthony Bott knew that ruling would increase the complication of an already complicated process and knew immediately that Jane.com would need help.
He began the search for a sales tax solution to help them file in almost every state and process sales tax calculations on millions of transactions. They picked TaxJar for its cost effectiveness and seamless, easy-to-use API that allows automated sales tax calculations, filing, and remittance. Now, they can focus more on their booming business and less on sales tax compliance.
From nexus in 1 state to nexus in 45 states
For several years, Jane.com’s sales tax responsibilities were simple, according to Anthony. “We were based in Utah and we didn’t have any location or employees outside of Utah. So we collected sales tax in Utah and remitted it to Utah manually.”
Before partnering with TaxJar in 2018, Anthony himself downloaded rate tables and worked with engineers to calculate sales tax on transactions in the one state where they transacted. However, the business grew, their sales tax footprint grew, and then, when the Supreme Court ruled in favor of South Dakota in the South Dakota v Wayfair case, Anthony knew that their sales tax obligations were about to become really complex. “Knowing the individual tax rates in every city, county, state — it was just overwhelming,” Anthony said of the 45 states where they would likely need to file. “There’s no way we could keep the database updated.”
“I could see pretty fast that almost every state was going to require us, as the marketplace, to collect and remit. We first got a notice from Washington and Wisconsin about needing to collect in those states and we weren’t sure how to do it and where to go.”
That’s when Anthony started to research sales tax automation solutions.
Evaluating three sales tax providers, choosing a sales tax partner
Anthony narrowed down his search to three sales tax solutions: TaxJar and two other competitors. However, Anthony quickly struck one from his list of viable providers after a conversation with VP of Sales and Account Management at TaxJar, Matt Grattan. Matt helped Anthony understand why a single tool — rather than juggling multiple systems, as one of the other solutions requires — would streamline their sales tax compliance.
When it came time to make the final partner selection, Anthony created a list of pros and cons and reached out to current customers of both solutions to learn about their experience. “I talked to a lot of customers and people were OK with the competitor,” Anthony recalled, “but nobody was super excited about it. And while the competitor had solutions for state issues, TaxJar’s solution met our needs better overall.”
Ultimately, Anthony decided to become a TaxJar customer. “Cost was a major factor for me,” Anthony said. “TaxJar was better priced across the board, with filing and the monthly service of collecting and remitting all compiled into one annual fee, compared to all of the different packages you would buy with the competitor. I don’t have to worry about what the fees will be every month.”
Integrating the TaxJar API in one three-week sprint
It was essential that Jane.com’s sales tax solution have an API with near zero downtime that could integrate easily with their homegrown, custom eCommerce system. To ensure the best possible experience, Anthony worked with a Jane.com engineer to test the TaxJar API using the reference documents available online.
When it came time for full integration, the developer had a jumpstart. After all, they had already tested out the API using real, live data. That made the integration quick and easy. “One of the biggest factors for us was dev time. We integrated TaxJar in three weeks. Our dev did it in one sprint. They were really happy with how easy it was to integrate.”
Since integrating TaxJar in 2018, Jane.com has used the TaxJar API to run sales tax calculations on millions of transactions every month. At first, they were worried about whether the API would scale. Spoiler: it did! In fact, TaxJar’s sales tax API has a 99.99% uptime with an API endpoint that is, on average, 16 times faster than the closest competitors’. As a result, Jane.com reports zero downtime.
“Since TaxJar stores everything in the cloud, we haven’t had any significant downtime, and it’s scaled really well with us,” said Anthony.
Saving 20-25 hours a month with AutoFile
Before the Supreme Court’s Wayfair decision, Anthony reported that it would take 30 minutes to file a sales tax return with Utah. However, as states started enacting economic nexus laws, the team faced monthly deadlines for filing dozens of state sales tax returns. Rather than filing manually they opted to use AutoFile with TaxJar.
“We’ve taken advantage of everything TaxJar has to offer when it comes to automatic sales tax filings. We really hope to continue to grow into all the states, because we would just hand all of the information to TaxJar to handle. TaxJar has taken a lot of the day-to-day stress out of managing sales tax.”
The Jane.com team still files manually in a few states that have specific requirements for marketplace facilitators who take commissions, and for those, they report that it takes 15 to 20 hours every month. Anthony expressed that he’s confident that TaxJar will continue to grow to accommodate their needs and reported thatTaxJar’s consistent product updates continue to make AutoFile even easier for eCommerce sellers and have directly benefited his team.
“We love how TaxJar has solved the refund issue and made it possible for us to AutoFile in more states.”
Partnering with a team focused on Jane.com’s success
When asked what advice Anthony has for other large companies looking to automate sales tax, his answer was clear: “I would definitely highly recommend TaxJar without any reservation, even to companies that, like Jane.com, process over $200 million annually.”
Why? Anthony shared two reasons: the product, and the team:
We integrated TaxJar in three weeks. One dedicated dev did it in one sprint. TaxJar has taken a lot of the day-to-day stress out of managing sales tax.