UPDATED 23:02 EST / APRIL 27 2021

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Stripe acquires TaxJar to assist with sales tax compliance

Payment technology company Stripe Inc. today revealed it has acquired TaxJar, a startup that allows e-commerce sellers to manage sales tax, for an undisclosed price.

Founded in 2013, TaxJar pitches itself as the leading technology solution for busy e-commerce sellers to manage sales tax. Founded by e-commerce merchants, the company’s cloud platform allows e-commerce merchants to spend less time on sales tax through solutions that solve complicated sales tax issues. Sales taxes in the U.S. are charged on a state-by-state basis, making the system complicated to keep up with.

The idea for TaxJar started with its founders discussing sales tax over fish tacos in 2012. Unlike many startups that have a solution trying to find a problem, the founders actually identified a problem that required a solution and hence a year later they started TaxJar.

TaxJar allows e-commerce users to connect with sales channels, marketplace or enterprise resource planning software with pre-built integrations or the TaxJar application programming interface. The service offers both a sales tax liability calculator and supports the ability to file and remit sales tax returns with AutoFile, which as the name suggests is an automatic sales tax filing system.

Notable TaxJar clients include CBS Corp., Coca-Cola Co., Dell Inc., Microsoft Corp., Eventbrite Inc., Robert Bosch GmbH, Honda Motor Co. Ltd. and Burt’s Bees Inc.

Prior to its acquisition by Stripe, TaxJar had worked closely with the company over the last five years to provide sales tax information to Stripe’s clients, first providing Stripe integration in February 2016.

“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,” said Stripe Chief Financial Officer Dhivya Suryadevara.

Stripe was most recently in the news in March, when it announced that it had raised $600 million on a $95 billion valuation. The late-stage funding and massive valuation spurred speculation that Stripe will eventually go public in one form or another. A traditional initial public offering or direct listing are the obvious choices, but in 2021 a special-purpose acquisition company merger can’t be ruled out either.

Prior to its acquisition by Stripe, TaxJar had raised $62.6 million, according to data from Pitchbook. Investors included Insight Partners, Bonfire Ventures and Daher Capital.

Image: TaxJar

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