TaxCloud is paid for by the states (so it's free for you!) when you use our Automated Compliance service. With Automated Compliance, you collect sales tax in the following 24 "Streamlined" states: AR, GA, IA, IN, KS, KY, MI, MN, NC, ND, NE, NJ, NV, OH, OK, RI, SD, TN, UT, VT, WA, WI, WV, WY. These are the states that participate in the Streamlined Sales and Use Tax Agreement (SSUTA).
Once you've collected sales tax in the above states for a given month, TaxCloud will debit your bank account the following month for the taxes you collected and then file the appropriate returns. Please note that you cannot "pick-and-choose" individual states among the 24 Streamlined states if you're using TaxCloud's Automated Compliance service. That is, you have to collect in all 24 states or select a different set-up option.
Please see below:
1.) As mentioned above, TaxCloud will calculate, file and remit on your behalf for free in the 24 Streamlined states since those states pay TaxCloud for the proceeds we send to them. In fact, you can use TaxCloud for free even if you also have to collect in a single non-streamlined states (e.g. CA), so long as you still collect in the 24 Streamlined states.
For example, say you have to collect sales tax in WI, TN, MI and CA. In that case, it probably makes sense to register for the Streamlined program and collect in the 24 Streamlined states since WI, TN and MI are among the 24 states that participate in that program. TaxCloud would then file and remit for you in those states and you would file and remit in CA. There would be no cost to you in this example.
2.) In the next scenario, everything is the same as above except we’ll assume you also must collect in TX and NY. In that case, TaxCloud would not be free. Your cost would depend on who files and remits for your business in the non-streamlined states.
If TaxCloud files and remits for you, the fee is between 0.125% and 0.50% of your sales in the given non-streamlined state. If you do it yourself, however, TaxCloud only charges for your API calls in that state.
3.) The last option is to not participate in the streamlined program but, instead, select the individual states where you want TaxCloud to calculate sales tax. In this case, you only pay TaxCloud for API calls. (You would be responsible for filing yourself in the given state(s).)
You can see our API fee purchasing options at the bottom of our Home Page.