accounting
What is Tax Automation?
Using software to automatically calculate, collect, and remit sales taxes and other business taxes based on your transactions.
In plain English
Tax compliance is a significant burden for small businesses, especially those selling across multiple states or countries with different tax rates and rules. Tax automation tools connect to your e-commerce platform and automatically apply the correct sales tax rate for each transaction, generate tax reports, and in some cases file returns automatically. Eliminating manual tax calculations reduces compliance risk and the hours spent on tax preparation at the end of each quarter.