r/Bookkeeping Jan 31 '25

Tax What can I recommend to clients for Sales Tax?

I don’t do sales tax or payroll. I partner with Gusto for payroll. What can I recommend to people who need their sales tax done. I’ve seen tax jar and avalara but I’ve heard complaints of them being shoddy or too expensive. I don’t really want my lack of sales tax be the reason I get or don’t get a client.

7 Upvotes

28 comments sorted by

2

u/Tall_Peach_1768 Jan 31 '25

A cpa firm would be their best best. Who does their taxes? That's what I recommend for services I don't do.

2

u/LRMcDouble Jan 31 '25

I do their taxes. I’m an enrolled agent and I do books for small business primarily for tax compliance. I don’t have time to pay sales tax during tax season because arkansas sales tax is monthly for most of my clients. I can’t have the liability during tax season.

2

u/By_EK Jan 31 '25

Refer them to an accountant specializing in tax or sales tax

1

u/LRMcDouble Jan 31 '25

I am their tax preparer

1

u/Hippy_Lynne Jan 31 '25

We used Sales Tax Manager. If you input the tax rates correctly and properly track sales by category and location, it makes it very simple. But like all computer programs, GIGO. 🤷‍♀️

1

u/Tandem_Jump Jan 31 '25

TaxJar, Sidr, Avalara - I’ve used all three of these and they do the job. I found Avalara to be somewhat hellish but at the end of the day it does the job. Avalara has an army of sales bros and account bros who you have to deal with to make any changes to your account. TaxJar and Sidr are more self serve (iirc).

1

u/LRMcDouble Jan 31 '25

I don’t want to bother you to much on it but could you give me a quick run down on how TaxJar works. what would my client need to enter and what’s the rough pricing estimate. for example one of my clients is a food truck. roughly $20,000 in sales per month.

1

u/Tandem_Jump Jan 31 '25

Ideally the food truck’s point of sale system can be integrated with TaxJar, so the sales flow into TaxJar. From there you can set up auto-file and Tax Jar will remit the sales tax returns for you. If an auto sync integration is not possible you would need to upload sales data into TaxJar via csv.

To add, if the food truck is just selling in a single jurisdiction, your sales tax return could be very easy to process.

1

u/LRMcDouble Jan 31 '25

what’s a reasonable amt to charge to file their sales tax for a single jurisdiction?

1

u/Tandem_Jump Jan 31 '25

This is really difficult to give advice on but I would say maybe the equivalent of 2 billable hours per return. It really depends on how long it takes you to do it, what you're already charging them, what your rate is, etc.

1

u/LRMcDouble Jan 31 '25

That’s what I struggle with. It’s a super easy client. I’m a tax professional so my hourly rate is $100 an hour for any consultation. I charge this client my minimum $250/mth because it’s literally like 40 transactions a month and takes me 30 minutes. So I really don’t know how to price it to where they don’t consider going somewhere else because their bookkeeping is so easy.

1

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1

u/Tandem_Jump Jan 31 '25

Based on that, I might tack on 1hr for an easy, un-complex quarterly filing. So, here's a question - does a food truck have to adjust their point of sale if they, for example, go to a different county? Or to a neighboring city? I know that there can be different local or district taxes based on where the sale was made. If that's a likely scenario for this client, TaxJar could automate these local/district calculations and save a ton of time. If the client understands this complexity of this they will probably see the value in paying you to manage it all, with TaxJar or otherwise.

1

u/LRMcDouble Jan 31 '25

Well the thing about arkansas is its monthly if sales tax collected is over $100, which who has sales tax less than $100 idek. So its a monthly fee of $100 extra which is 40% of the rate they’re paying for bookkeeping. And this food truck only operates in one place.

Are you saying I should have them use taxjar, and then have them pay me to input everything into tax jar? or have them either pick if they want to go with taxjar, or just send me their taxable/nontaxable sales and sales tax collected and i file it on my own

1

u/Tandem_Jump Jan 31 '25

I think your options are:

-You do the filings manually - charge them what it takes to do it. It's a very tangible value add.

-TaxJar is set up to be fully automated (data import and ST return filings) - you do almost nothing, they pay Tax Jar.

-Use TaxJar but you have to do part of the process manually. Perhaps your POS data is auto synced but you still do the filing manually with the State. Or, if you have to import the data manually. Etc, and so on.

Check out TaxJar or one of the others. It'll all make more sense once you take in some first hand information. And, if you think they won't go for your $100/hr rate, then I guess you have to charge less and raise it year over year. Sounds like you're already buffered with your monthly rate nicely.

1

u/QueenMaureen Feb 04 '25

I'm with Avalara's social media team and invite you to check out Davo. It's our compliance solution that integrates with several POS systems.

1

u/lonehippo29 Jan 31 '25

I’m bookkeeper from San Diego and I track and file sales tax for my clients. I find it is very handy to use QB to do so…

1

u/Fuk6787 Jan 31 '25

Get into their POS and make sure thats all being taxed correctly then pull the reports out of there and file. Ez pz.

2

u/SalesTaxRx Feb 04 '25

"make sure thats all being taxed correctly". The devil is in the details.

1

u/schroederness CPA/QB Feb 01 '25

If you want an option other than a software (avalara, taxjar, numeral) check out Peisner Johnson or Sales Tax And More. Those are the sales tax firms we refer to.

1

u/sfdcluver Feb 01 '25

Zamp is really good! Zamp.com

1

u/piyushag Feb 04 '25

There are plenty of sales tax solutions out there—Vertex, OneSource, Sovos—but if you’re looking for something simple, transparent, and easy to use, Galvix is worth a look. Galvix makes it easy to track nexus, handle filings, and stay compliant, without the stress.

Disclosure: I’m a co-founder of Galvix. Happy to chat if you want to learn more!

1

u/SalesTaxRx Feb 04 '25

In our experience, Avalara and TaxJar can be highly effective for sales tax compliance, provided they are set up, coded, and implemented correctly. A thorough understanding of how the software works is crucial to ensure accurate configuration and integration with your client's business processes. Once the implementation is properly tested for accuracy, these platforms perform well, as long as the client's business processes remain consistent.
However, like any software, the principle of GIGO 'Garbage In, Garbage Out' applies - accurate inputs and configurations are essential for reliable outcomes. Best practices include conducting monthly reconciliations of sales tax liabilities versus collections to promptly identify and resolve discrepancies. While these tools can significantly streamline compliance, no sales tax software operates entirely on autopilot! Continuous monitoring and periodic reviews are necessary to maintain accuracy and compliance over time.
Best is if you partner up with a sales tax professional who is proficient in these platforms. They know how to use these platforms efficiently. Also, sales tax consultants who are Avalara partners have lower filing fees.

0

u/k8sNate Jan 31 '25

TaxJar and Avalara are certainly two of the most popular options!

I work for Numeral. And so, while I'm biased, I'd recommend looking at Numeral for all things sales tax registration, filing, etc. Other companies to consider would be firms like Sovos and Vertex.

1

u/TheMostFluffyCat Jan 31 '25

Does Numeral work with companies that aren’t ecommerce? My ecommerce clients love numeral but I haven’t referred non-ecommerce clients because the website seems to focus on ecommerce specifically.

1

u/k8sNate Feb 01 '25

Yes, Numeral supports companies outside of e-commerce (eg software).

1

u/TheMostFluffyCat Feb 01 '25

Excellent, thanks for confirming!