TaxCloud

About TaxCloud

TaxCloud, legally known as The Federal Tax Authority, LLC, is a software-as-a-service (SaaS) platform designed to simplify sales tax compliance for online businesses, particularly small to mid-sized e-commerce merchants. Founded in 2008 by David Campbell, Fred Schapelhouman, and Paul Onnen, the company is headquartered in Norwalk, Connecticut. Campbell, the former CEO, leveraged over 30 years of experience and multiple patents in software and data to shape the company, having previously founded secure data archival and online file storage firms Punch Networks and Deep9. His expertise was pivotal in the company's development and he even testified before the US Congress regarding the complexities of online sales tax.

The core of TaxCloud's business is automating the complexities of sales tax across the more than 13,000 jurisdictions in the United States. The platform provides real-time sales tax calculation at the point of transaction, ensuring accuracy based on the specific product or service and the customer's address. Beyond calculation, TaxCloud handles the collection of taxes, prepares return-ready reports, and can automatically file returns and remit payments to the appropriate state and local authorities. This service is critical for businesses navigating economic nexus laws, which mandate sales tax collection once certain revenue or transaction thresholds are met in a state. The company also offers audit support to assist clients in responding to tax authority inquiries. TaxCloud's services are particularly beneficial for companies involved in mergers and acquisitions, helping to quickly identify and resolve hidden tax liabilities post-acquisition.

TaxCloud operates on a subscription-based business model, with revenue generated through tiered pricing plans that cater to businesses of varying sizes. It offers several plans, including a free version for basic needs, a 'Starter' plan, and a 'Premium' tier for businesses requiring more advanced features like unlimited integrations and real-time calculations with address verification. Filing and remittance services are available as add-ons or within higher-tier plans. As a certified service provider for the Streamlined Sales Tax (SST) program, TaxCloud can offer free or discounted services in 24 member states. The platform integrates with major e-commerce platforms like Shopify and BigCommerce, payment processors such as Stripe, and ERP systems, or can be connected via its API for custom solutions. In April 2023, the company secured a $20 million growth equity investment led by Camber Partners, which also saw the appointment of Nate Gilmore as the new CEO to expand product offerings and drive growth.