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G2 Grid® Scoring

Sales Tax and VAT Compliance Software Definition

Sales tax and VAT compliance software helps businesses utilizing customer-facing transactions apply the appropriate local and federal rules and rates so the correct taxes are collected. Staying up-to-date with changing rules and exemptions is required by law, and these tools ensure the full transaction lifecycle is aligned with any relevant jurisdictions—which can vary depending on the number of markets a business serves. Business owners, customer support teams, accounting teams, and e-commerce administrators in a variety of industries use sales tax, VAT (value added tax), GST (goods service tax), indirect tax, and other compliance products to oversee tax collection and filing for all sales transactions. This includes adjusting sales tax prices for certain products, customers, or occasions where necessary, such as sales tax holidays or after a customer’s change in circumstance, along with any update to official regulations when new legislation is passed. Proper use of these tools will greatly reduce the effort in tracking customer and rate data, as well as minimize the risk of any oversight that could result in customer dissatisfaction, missing funds, or legal ramifications. Some tax compliance tools will also send notifications for important tax filing dates or required paperwork. These systems often integrate with ERP systems and accounting software to ensure budgets, profits, and projections are accurate across the organization, as well as POS and e-commerce tools so taxes are correctly represented to customers and collected in transactions.

To qualify for inclusion in the Sales Tax and VAT Compliance category, a product must:

• Track sales tax, VAT, GST, or other rates and rules for all jurisdictions relevant to a user’s products or services
• Track and apply tax exemptions for the appropriate times, products, transactions, or accounts
• Automatically update rates and rules in response to policy revisions or new legislation
• Integrate with accounting and transaction tools so correct rates are communicated, stored, and applied where necessary
• Automate and manage returns and remittance for all jurisdictions

Mid-Market Sales Tax and VAT Compliance Grid® Scoring Description

• Products in the Leader quadrant are rated highly by G2 users and have substantial Market Presence scores. Leaders include: Avalara and Anrok
• High Performing products have high customer Satisfaction scores and low Market Presence compared to the rest of the category. High Performers include: Sphere, DualEntry, and Lappa
• Contender products have relatively low customer Satisfaction scores and high Market Presence compared to the rest of the category. While they may have positive reviews, they do not have enough reviews to validate those ratings. Contenders include: TaxJar, Vertex, Zoho Books, SAP Document and Reporting Compliance, and Sovos
• Niche products have relatively low Satisfaction scores and low Market Presence compared to the rest of the category. While they may have positive reviews, they do not have enough reviews to validate those ratings. Niche products include: Complyt