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The 3 Big Kahunas; Avalara, Taxjar and Taxify

“Kahuna” in Hawaiian means “a wise man, or shaman.” In the world of sales tax software there are three Big Kahunas: Avalara, TaxJar and Taxify. If you are going to be filing sales tax in any or all states, then you need to find a sales tax tool to help you out. It’s important to do your homework when doing a sales tax software comparison. You might have heard a lot about each of these sales tax programs. Each one might be right depending on who is asking. The question is, which one is the wisest option for your company?

When deciding which one will be the best fit, there are two things to pay attention to:

  1. Making sure you collect the right amount of sales tax (click here for more information)
  2. Remitting and filing your sales tax returns after you have collected your sales tax.

You can also view our YouTube video here that talks about these three sales tax apps.


To collect sales tax on Amazon, after logging in, you follow a few simple steps. You choose product tax codes and the states where you have nexus. You can even choose a custom sales tax rate. When using Shopify to calculate taxes, after logging in and choosing your country, you turn on “calculate taxes automatically.” Then you will add all the states in which you have nexus.

Then you have the option to put in a flat rate (low, medium, or high) for platforms such as PayPal. Keep in mind that the flat rate will most-likely not be the same in all the states you have sales in. It is just an estimate that allows you to collect some sales tax. Some sales tax is better than none, but it’s by no means a perfect solution. Some platforms have a table, and you can list the rates by state. However, it may not have the most recent rates.

Either way, the most helpful thing you can do is to get sales tax software. TaxJar, Taxify and Avalara all have a sales tax engine. You basically attach it to your platform (Shopify, WooCommerce, Magento) or site (WordPress, etc.), and depending on the sales tax engine, it will calculate the sales tax for you. Sometimes that calculation is based on the product you are selling, but it is always influenced by what the rules are in different states.


Each state has its own rules and laws that may vary from one another. Cities and counties may also impose sales tax and require returns as well. Unfortunately, it is up to businesses to make sure they comply. To do so, they need to know where and when to file. They must also register in each jurisdiction.  The different due dates and filing schedules can be overwhelming.  Add this to the varying payment and filing methods, and this can become a crazy process.

For more information on filing and remitting click here.

Believe it or not, some companies use two different types of software to do these tasks. For example, they may use Avalara to collect and Taxify to file and remit. It’s better and more straightforward to just rely on one if you can find one you like that does everything you need.

Ecommerce sales tax


Avalara is the biggest player here; they’ve been around a long time. So, they’ve got a lot of great information on product taxability and different rates in different states and jurisdictions. In fact, only Avalara supports international filings, including Canada and US territory islands.

Avalara connects with pretty much all other platforms. In fact, some platforms, when you sign up with them, will automatically connect you to Avalara. You can continue to use Avalara this way until you hit a certain threshold of sales volume. Once you’re selling at greater volumes you must sign up with Avalara and start paying them to use their sales tax engine. They will then charge you on a per-transaction basis. This is because every time you sell a product you are using their sales tax engine to calculate the amount of sales tax you need to collect.

Avalara has two main products: AvaTax and Avalara TrustFile.


Pros: AvaTax is really for accounting departments and big companies that are selling a lot on a variety of platforms. Big-name companies like Nike use it as the next level of sales tax calculation. AvaTax is a robust system and comes with an even more robust price tag. Although expensive, it delivers great results.

Cons: AvaTax doesn’t connect to all the big ecommerce platforms out there. That’s right, no syncing your Shopify, Amazon, or BigCommerce sales platforms to it (just to name a few). So, for an ecommerce seller it’s not only expensive, but it also requires a lot of manual work. It’s not as comparable to TaxJar, Taxify, and Avalara TrustFile in that sense.

Avalara TrustFile

Pros: Avalara TrustFile has been around about as long as TaxJar and Taxify. Unlike AvaTax, Avalara TrustFile does connect to all the top ecommerce platforms.

Cons: Tech-wise they are behind Taxify and TaxJar when it comes to their ability to manipulate data. For example, if you sell on Amazon, they will keep the addresses related to baby and wedding registries in a separate database. However, when TrustFile pulls in that information, it doesn’t consider those addresses and just assigns those transactions to your company address. Because of this feature, the data you get from TrustFile isn’t the best, and you can probably understand how that is a problem. The word on the street is that TrustFile most likely won’t be around for very much longer because of these types of issues. It just never quite has information that’s as accurate and up-to-date as TaxJar and Taxify. Avalara is great as a company, but right now they aren’t the best option in a sales tax software comparison for eCommerce companies.

Even if TrustFile isn’t a fit for you, Avalara as a company is a great resource. They have been around the longest and have a lot of good educational material. Including their blog; check out their blog here.


Pros: TaxJar is probably the most standard option. If you are a simple ecommerce business selling on only a few channels, then TaxJar might be perfect for you. You can’t have anything crazy going on though. If everything is straightforward then it’s a more cost-effective way to track and file your taxes. Unlike Avalara, TaxJar can cater to ecommerce businesses as well as solve their sales tax problems. They also have some great information on their blog.

Cons: If you use TaxJar as your sales tax software, then you should be aware that TaxJar will only file information based on the sales tax that it calculates. It won’t file it based on what you collect. Therefore, if you are doing your own calculations and estimate your own sales tax, you won’t be able to remit what you collected; you’ll remit what the program calculates. This can create discrepancies, and you may have to make up the difference out of pocket.

TaxJar is good for uncomplicated cases as mentioned before. If you have tax-exempt products, then it’s probably not for you. It is more of a pre-set system. It also doesn’t allow for backfiling. For example, if you haven’t been filing for the last year and want to catch up; you can’t go back and pay all those penalties and interest. With TaxJar you can only go forward.

TaxJar also doesn’t support local jurisdiction sales tax filing. For example, Colorado is a home rule state so you might need to file separately for Colorado and the city of Denver. TaxJar won’t support the Denver filing. However, Taxify does.


Taxify is good at keeping their offerings up-to-date which helps them stay competitive and relevant. They have similar offerings as TaxJar and Avalara, (tax rate information, PDF filings, and payment confirmations to name a few). However, they usually offer things first and are somewhat of a leader in terms of ecommerce sales tax software.

Pros: Unlike TaxJar, Taxify allows for more flexibility. It is the perfect solution for companies that have a little more complexity, such as those that sell on many different channels. Or even those that have business-to-business sales that are exempt from tax. You can edit the information based on orders and edit the actual sales tax returns before they get filed. So, if there are discrepancies you can manually go in and fix those. Taxify allows for backfiling as well.

Cons: Taxify is a little more expensive than TaxJar. So, if you are a small straightforward company who sells on only a few channels, then it might not be worth the extra cost.

Sales Tax Software Comparison

Avalara, TaxJar, and Taxify are the 3 Big Kahunas when it comes to sales tax software. (FYI, QuickBooks Online now offers basic sales tax help. For more information click here). The most important thing when making this decision is knowing your company’s needs. If you sell on a lot of channels, have tax exempt products, require backfiling, or want more flexibility, then it might be good to consider Taxify. If you only sell on a few channels, are just starting off, and don’t have any of those extras to worry about, then the most cost-effective choice is TaxJar. Avalara might not be the best choice for ecommerce companies since AvaTax has limited connection capabilities, and TrustFile doesn’t capture shipping addresses. But maybe you are willing to go without the connection capabilities because of AvaTax’s high-quality performance.

We know that this is a lot to process. Sales tax compliance is time consuming and sometimes confusing. That’s why we are here to help. Making a wise “Big-Kahuna” choice when it comes to your sales tax software comparison will make all the difference. Let us help you find the best software fit for your company, so you can focus on growing your business! (For more information on outsourcing your sales tax needs click here.)