Sales Tax Software Market Report 2025

This Sales Tax Software Market report delivers an in-depth analysis of the market’s key characteristics, including size, growth potential, and segmentation. It provides a detailed breakdown of the market across major regions and leading countries, highlighting historical data and future growth projections. The report also examines the competitive landscape, market share insights, emerging trends, and strategic developments shaping the market.

The sales tax software market size has grown rapidly in recent years. It will grow from $9.61 billion in 2024 to $10.68 billion in 2025 at a compound annual growth rate (CAGR) of 11.2%. The growth during the historic period can be attributed to the increasing complexity of tax regulations, the rise of e-commerce, the globalization of trade, the growing demand for automation to reduce human errors, stricter government compliance requirements, the adoption of cloud-based solutions, and the rising need for real-time tax rate updates.

The sales tax software market size is expected to see rapid growth in the next few years. It will grow to $16.18 billion in 2029 at a compound annual growth rate (CAGR) of 10.9%. The growth during the forecast period can be attributed to the increasing adoption of e-commerce and omnichannel retail, expanding global trade driving the need for cross-border tax compliance, evolving tax regulations, rising demand for automation to reduce manual errors, a growing focus on data security and compliance, and the increasing preference for cloud-based solutions. Key trends in the forecast period include the integration of AI-powered tax rate accuracy, the adoption of real-time compliance updates, seamless ERP and e-commerce integrations, advanced exemption certificate management, the adoption of blockchain-enabled audit trails, and the development of enhanced user-friendly dashboards with predictive analytics.

The growth of digital transactions is expected to drive the expansion of the sales tax software market in the future. Digital transactions refer to electronic exchanges of value made through online or mobile platforms, providing secure and efficient payment methods. The increase in digital transactions is attributed to the growth of the internet, widespread smartphone usage, advancements in payment technologies, and a shift toward cashless and contactless payment systems. Sales tax software plays a critical role in managing tax compliance for digital transactions, ensuring accurate and efficient tax calculations across online platforms. For example, in June 2024, Australia and New Zealand Banking Group, an Australia-based financial services company, reported that global non-cash transactions amounted to 1.3 trillion in 2023 and are expected to grow to 2.3 trillion by 2027. This growth in digital transactions is fueling the demand for sales tax software.

Leading companies in the sales tax software market are concentrating on developing innovative products such as cloud-based tax automation platforms to improve user experience, streamline tax compliance processes, and ensure accuracy in tax calculations across various industries and regions. A cloud-based tax automation platform is a software solution hosted in the cloud that assists businesses in automating tax-related processes such as tax calculation, compliance, filing, reporting, and documentation. For instance, in May 2023, CereTax Inc., a US-based software company, introduced a new user interface aimed at simplifying the sales tax automation process for businesses of all sizes. The updated portal in CereTax's cloud-based tax automation platform makes it easier for users to manage tax calculations, rules, and detailed reporting. Designed for simplicity and efficiency, the interface promotes operational continuity for businesses. By focusing on flexibility and user experience, the portal enhances the platform’s ability to provide advanced tax solutions while maintaining a user-focused approach.

In September 2023, Ryan LLC, an India-based tax consultancy, acquired the sales and use tax recovery services and audit defense business line from Avalara for an undisclosed sum. This acquisition boosts Ryan's ability to support enterprise clients, including Fortune 500 companies, by improving tax recovery, savings, and audit defense services across various industries and regions. Avalara is a US-based software company that provides tax compliance automation solutions.

Major players in the sales tax software market are Oracle Corporation, SAP Inc., Intuit Inc., Vertex Pharmaceuticals, Thomson Reuters, Wolters Kluwer N.V., Infor Inc., Zoho Corporation, Stripe Inc., Sage Group plc, Epicor Software Corporation, Xero Limited, Avalara, Taxify, Vertex Inc., Sovos Compliance, Gusto Inc., MYOB, Sage Intacct Inc., Acumatica Inc., Wave Accounting, Taxually, TaxJar.

North America was the largest region in the sales tax software market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in sales tax software report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the sales tax software market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Sales tax software is a digital solution designed to automate and streamline the sales tax compliance process for businesses. This software calculates applicable taxes, manages exemption certificates, and automatically updates tax rates, ensuring accurate and efficient compliance with national and local tax laws. It simplifies tax reporting, filing, and remittance processes, reducing the risk of errors and penalties by integrating seamlessly with accounting and sales systems.

The main solutions in the sales tax software market include tax filings, consumer use tax management, and other solutions. Tax filings refer to the process of submitting required tax forms and related documentation to government tax authorities, detailing income, deductions, expenses, and other relevant financial information. These solutions can be deployed through cloud-based or on-premises models. Common applications of the software include sales tax calculation and reporting, tax audit and compliance, tax exemption management, and tax return preparation. The software is used in industries such as information technology (IT) and telecom, banking, financial services, and insurance (BFSI), healthcare, transportation, retail, and other sectors.

The sales tax software market research report is one of a series of new reports that provides sales tax software market statistics, including the sales tax software industry's global market size, regional shares, competitors with a sales tax software market share, detailed sales tax software market segments, market trends and opportunities, and any further data you may need to thrive in the sales tax software industry. This sales tax software market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The sales tax software market includes revenues earned by entities by providing services such as real-time calculation of sales tax, e-filing services, audit support, cross-border tax compliance, and analytics and insights. The market value includes the value of related goods sold by the service provider or included within the service offering. The sales tax software market consists of sales of cloud-based sales tax software, audit and risk management tools, and exemption certificate management tools. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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