Stripe launches Stripe Tax, makes global sales tax handling frictionless

By Pavithra R

Stripe, a provider of economic infrastructure for the internet, has announced the launch of Stripe Tax to help businesses automatically calculate and collect sales tax, value-added tax (VAT), and goods and services tax (GST) in over 30 countries and all US states.

Tax compliance has become increasingly complex, with digital and physical goods now taxed in over 130 countries, and over 11,000 different tax jurisdictions in the US alone. Tax rules in each jurisdiction are updated frequently and often vary based on subtle details. Businesses face significant opportunity costs in becoming compliant, but also maintaining a compliant setup globally.

Stripe Tax makes global sales tax handling seamless and frictionless; and automates tax calculation and collection for transactions on Stripe, tells businesses where they need to collect taxes, and creates comprehensive reports to make filing taxes easy.

“No one leaps out of bed in the morning excited to deal with taxes. For most businesses, managing tax compliance is a painful distraction. We simplify everything about calculating and collecting sales taxes, VAT, and GST, so our users can focus on building their businesses,” said John Collison, co-founder and president of Stripe.

Stripe Tax radically simplifies tax compliance for businesses. It features:

• Real time tax calculation: By determining the end customer’s precise location, and matching that to the product or service being sold, Stripe Tax calculates and collects the right amount of tax, and keeps up to date with rate and rule changes so businesses don’t have to.
• Frictionless checkout: It lets B2C businesses to reduce checkout friction by using location information to calculate and show taxes in the most familiar way to their customers.
• Tax ID management: For B2B businesses, Stripe Tax collects the tax identification number from customers, and automatically validates VAT IDs for European customers, applying a reverse charge or zero VAT rate when necessary.
• Reconciliation: It saves businesses from reconciling thousands of transactions by creating comprehensive reports for each market in which a business is registered to collect tax, speeding up filing and remittance.

Stripe Tax can be enabled automatically by adding a line of code or updating a single setting in a business’s Stripe Dashboard.

Founded in 2010, Stripe is a technology company that builds economic infrastructure for the internet. Its customer base includes Wayfair, Peloton, Zoom, Instacart, Shopify, Instacart, Twilio, Westfield, Just Eat, to name a few. Recently, the firm acquired TaxJar to build the world’s tax compliance infrastructure. Stripe Tax already integrates directly with TaxJar, enabling users to easily file their taxes.