In A Business Platform Play, Square Adds Sales Tax Reporting Through TaxJar

Mobile payment company Square is today adding another integration that highlights its strategy to expand the kinds of services it offers to small businesses, in a bid to go beyond payments and position itself as a business platform. It will now let Square customers link up their accounts with TaxJar, which lets companies automatically count and report local and state sales taxes.

While users can integrate the two services together, this is not an offer to use TaxJar for free. Businesses doing less than 1,000 transactions per month pay $9.95 monthly, with prices increasing according to volume. Square says that the service is retroactive — meaning, if you activate it now you can set it to calculate sales tax on past transactions, not just those that are in the future.

Among the services it offers: TaxJar, which was founded by small business owners themselves and is venture backed and based in San Diego, reports each state that requires a sales tax responsibility; reports how much tax was collected for each local jurisdiction; and tracks state filing deadlines. TaxJar’s platform also enables e-filing and guidance and analysis on what sales tax should be collected versus what was collected for compliance purposes.

In the past Square has Intuit’s QuickBooks bookkeeping software in September 2013, and it also links up with Xero, another accounting package. With all of these, Square integrates by selectively allowing the partner to use is API.

The advantage of adding TaxJar is twofold for Square: on one hand it gives businesses another feature, and one that is usually a pain for businesses to sort out, which may sway more of them to using Square for front-line payments. On the other, if you are an existing business, something like this could help to keep you as a customer of Square’s and choose this route for transactions and other business services.

The integration comes at an interesting time in other ways for Square. The company is apparently raising another large round of funding, some $200 million at a $6 billion valuation, and you have to wonder whether it will figure in any way in upcoming news from Apple, whose iPhone and iPad are longtime hardware partners for Square’s dongle-based payment service and related apps: some believe that the company is gearing up for a mobile payments announcement.

Image: Flickr