The FinTech Stripe is acquiring business sales tax platform TaxJar for an undisclosed amount. The acquisition is part of an upcoming suite of tax tools Stripe is developing to help eCommerce companies and other online businesses.
“There’s a reason TaxJar has been a top choice for businesses: Their software tools make it incredibly easy to handle sales tax,” Stripe CFO Dhivya Suryadevara said on Tuesday (April 27). Suryadevara added that the addition of TaxJar extends sales tax assistance to the “millions of internet businesses” that operate on Stripe’s platform. The tool will also ease the process for digital businesses to sell worldwide.
As part of the acquisition, TaxJar’s 200-person workforce will now be part of Stripe. Headquartered in Boston, Massachusetts and founded in 2013, the startup has experienced a surge in demand for its services by companies of all sizes.
Companies selling goods online are faced with more than 11,000 different sales tax jurisdictions, just in the U.S. TaxJar provides accurate sales tax rates at checkout, tied to the customer’s exact address.
“For internet businesses, accurately tracking, calculating, reporting and filing taxes is a large and growing burden,” according to Stripe. Over the past five years, help with navigating sales tax is among the most requested services among Stripe users.
Mark Faggiano, TaxJar’s founder and CEO, said that like Stripe, TaxJar thinks “every day” about how it can better serve businesses and remove barriers to expansion. “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,” he said.
Earlier this month, Stripe — which is now valued at $95 billion — launched the Stripe Issuing service in 20 European countries. The service already exists in the U.S.
Overall tax complexity has been building for years with the acceleration of eCommerce and is poised to increase, especially in the digital software space, Kurt Smith, vice president of product and strategy at FastSpring, told PYMNTS in June 2020.