Stripe acquires sales tax software provider TaxJar
San Francisco and Dublin based Stripe, which builds payment infrastructure for the internet, has announced that it has entered into an agreement to acquire TaxJar, a leading provider of sales tax software for internet businesses.
TaxJar is a market leader in tax tools for startups, helping businesses comply with an ever-growing list of sales tax requirements. Alongside Stripe Billing and Stripe Radar, the company said that TaxJar will become a pillar of Stripe’s revenue platform – helping internet businesses sell worldwide with minimal complexity. As part of the acquisition, the entire TaxJar team of 200 employees will be joining Stripe.
The parties did not disclose the price paid by Stripe. TaxJar most recently raised $60 million in venture capital financing in early 2019, at a valuation of about $180 million.
Local sales taxes applicable to online commerce have proliferated in recent years, with more than 11,000 different sales tax jurisdictions in the United States alone. For internet businesses, accurately tracking, calculating, reporting, and filing taxes is a large and growing burden. One of the top requests from Stripe’s users over the past five years has been for assistance in navigating sales tax.
“There’s a reason TaxJar has been a top choice for businesses: their software tools make it incredibly easy to handle sales tax,” said Dhivya Suryadevara, Stripe’s CFO. “With TaxJar, we will help millions of internet businesses running on Stripe with their sales tax and make it easier for them to sell internationally. And as a CFO, I’m delighted to welcome so many new colleagues who care deeply about taxes!”
As economic infrastructure for the internet, Stripe’s products go far beyond payment acceptance. Stripe’s revenue platform helps internet businesses make more money while relieving the burden of tedious, administrative tasks. Stripe’s Adaptive Acceptance feature, for example, uses machine learning to retry network declines in real time using optimized routing and ISO 8583 messages, helping improve authorization rates and recover revenue that would otherwise be lost. (With Adaptive Acceptance, Twilio achieved a 1% uplift over a 12-month period.)
Similarly, Stripe Billing provides more than 100,000 businesses—including Atlassian, Slack, Smartsheet, and DoorDash—with a series of micro-optimizations that increase revenue and cash flow. By intelligently suggesting the right payment methods, including direct bank debits, Stripe Billing’s hosted invoices get paid three times faster than traditional invoices.
As the latest addition to Stripe’s revenue platform, TaxJar will help businesses automate tasks such as:
- Providing accurate sales tax rates at checkout, tied to the exact street address of the customer.
- Automatically submitting tax returns to local jurisdictions and remitting the sales tax collected.
- Producing local jurisdiction reports to show sales and sales tax collected—not only for each state, but for relevant counties, cities, and other special jurisdictions.
- Evaluating a company’s products and intelligently suggesting the right product tax code.
Since its launch in 2013, demand for TaxJar’s sales tax offerings has grown rapidly among internet businesses of all sizes.
Stripe said it expects to continue expanding its tools to help internet businesses with sales tax. In particular, given the number of large commerce platforms that run on Stripe—who themselves power hundreds of thousands of individual businesses—Stripe will also create a suite of tax tools that platforms can offer to their customers.
“Like everyone at Stripe, we think every day about how we can help startups and multinational companies alike remove barriers to growing their business,” said Mark Faggiano, CEO of TaxJar. “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. We couldn’t be more excited to join Stripe and help power millions of businesses around the world.”
The acquisition is subject to standard closing conditions, including regulatory approvals. TaxJar users can continue to use the company’s products directly.