TaxJar bottles up $600K from investors to sweeten sales tax management / Sales Tax Solution for Online Merchants Gets Angel Funding

Kia Kokalitcheva for VentureBeat writes: Sales taxes. Customers hate them, retailers hate them — or do they?  Maybe not anymore.   TaxJar, a San Diego-based provider of tax management software for online retailers, just picked up $600,000 in seed funding from several angel investors.

“We’re solving what is perhaps the biggest administrative and compliance burden for small businesses — the headaches of sales tax,” said Mark Faggiano, TaxJar’s chief executive and cofounder.

TaxJar’s opportunity lies in the high complexity of sales taxes that govern online sales. Here’s one complicated instance: Some states require sellers to collect taxes based on a customer’s address, forcing them to juggle tax calculations based on hundreds or thousands of jurisdictions. Whether a seller has a physical location, such as a fulfillment center, also affects their sales taxes.

Although services similar to TaxJar already exist, most of them are focused on large enterprise clients, leaving the door open for TaxJar to provide a product fit for smaller businesses. Its current customers range from small merchants selling less than $100,000 per year in one marketplace to bigger merchants selling tens of millions of dollars per year through multiple channels.

The company will use the funds for customer acquisition and to develop new features, namely a tax rate lookup service, sales tax return e-filing, and support for additional shopping carts and marketplaces.

However, TaxJar claims it has no plans to expand beyond the sales tax sector. “We see a ton of runway where we can help our merchants further simplify their sales tax challenges, like e-file, and also see ways to expand internationally,” Faggiano told VentureBeat via email.

Participants in this seed round include Facebook’s vice president of partnerships Dan Rose, H Barton Asset Management partner Harris Barton, Magento cofounder and chief operations officer Roy Rubin, as well as unnamed angel investors from eBay, Intuit, ShipWire, and other companies.

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Ina Steiner for EcommerceBytes.com writes: A company that provides sales tax automation for online merchants and marketplace sellers has received $600,000 in funding from angel investors. Among those participating in the seed round are Magento cofounder and COO Roy Rubin and Facebook Vice President of Partnerships Dan Rose, as well as executives from eBay, Intuit and ShipWire.

TaxJar said it would use the funds to "further develop the company's efforts in customer acquisition and product development."

TaxJar provides a cloud-based solution for online sellers who use Amazon, eBay, Etsy, Shopify, PayPal and BigCommerce. "The reaction TaxJar is getting to its services is exceeding what we expected at this stage," said Mark Faggiano, CEO and co-founder of TaxJar. "We're solving what is perhaps the biggest administrative and compliance burden for small businesses - the headaches of sales tax."

TaxJar said it will also use the funding to prioritize and implement a number of product features, all driven by customer feedback. The features are expected to include a tax rate lookup service, sales tax return e-filing, and new data sources that support additional online sellers.