Sales Tax, VAT & Tax Compliance

If you sell to customers in more than one tax jurisdiction (basically: anyone in the US selling more than ~$10k–100k in any state, or anyone selling to the EU / UK / Australia), you need real tax software within your first year.

Tax calculation APIs

• ★ Stripe Tax — built into Stripe Checkout / Billing; reasonable per-transaction fee; calculates + reports + (with Stripe Tax Filing) files. The default if you're already on Stripe.
• ★ TaxJar (Stripe-owned) — broader product; standalone API; also handles filing in the US.
• ★ Avalara AvaTax — enterprise; the heavyweight; covers VAT / sales tax / GST globally; expensive but unmatched coverage.
• Quaderno — friendly indie alternative; great for SaaS; affordable.
• Anrok — modern, US- and SaaS-focused.
• Vertex — enterprise.
• Sphere — competitor; modern.

Merchant of Record (they handle tax for you)

• ★ Lemon Squeezy — MoR; calculates / collects / remits VAT, sales tax, GST. Default for indie SaaS / digital products.
• ★ Polar.sh — MoR; developer-focused.
• Paddle — MoR; mature; good for global SaaS.
• FastSpring — MoR; older.
• Gumroad — MoR; for digital products.

When you use an MoR, you don't think about tax — they file. Trade-off: fees ~5–8% vs. ~3% direct + paying for tax software.

US sales tax specifics

• Nexus — economic (revenue / transaction thresholds) or physical (offices, employees, inventory). When you cross a state's threshold, you're obligated.
• Marketplace facilitator laws — if you sell on Amazon / Shopify / Etsy, the platform often files. Your direct sales still don't.
• TaxJar / Avalara / Anrok all handle the filing in the US.

EU / UK VAT

• ★ VAT registration in each country if you cross thresholds (or use OSS / IOSS schemes for simplicity).
• OSS (One Stop Shop) — single EU registration for selling to EU consumers.
• IOSS (Import One Stop Shop) — for goods ≤ €150 from outside the EU.
• UK has its own scheme post-Brexit.
• Most calculation APIs above handle EU VAT correctly with VIES (VAT number validation) for B2B reverse charge.

Other regions

• Canada GST/HST/PST — Quaderno, Avalara handle it.
• Australia GST — same.
• Brazil, India, Mexico — wildly complex; if you sell there meaningfully, use Avalara or an MoR.

Compliance tools (sales-tax-adjacent)

• See Compliance / SOC2 for SOC 2 / ISO / GDPR.

VAT / GST input validation

• VIES API — free EU VAT number validation; rate-limited.
• vat-checker / @checktype/vat — npm wrappers.
• Quaderno / Stripe Tax include VAT validation in their APIs.

Invoicing / receipts

• Stripe Customer Portal — auto-generates receipts.
• Quaderno — great for compliant invoices in 100+ countries.
• Sufio, Bookipi, Invoiced — alternative invoice generators.
• DIY with PDF generation — fine until your accountant complains.

Patterns to know

• Track tax by line item, not by total — for refunds and partial returns.
• Store the tax rate at time of sale — don't recompute on refund.
• B2B reverse charge — collect a valid VAT number; charge 0% VAT; show on invoice.
• Tax-exclusive vs tax-inclusive pricing — different defaults per region (US: exclusive; EU: inclusive). Configure per market.
• Audit log — every calculation, source rate, jurisdiction, decision. You will be audited eventually.

Pick this if…

• You're indie / small SaaS: Lemon Squeezy or Polar (MoR) — let someone else handle tax entirely.
• You're already on Stripe: Stripe Tax + Stripe Tax Filing.
• Mid-market SaaS, US + EU: TaxJar or Anrok.
• Enterprise, global, "we sell everywhere": Avalara.
• Indie-friendly direct (not MoR): Quaderno.