What are the Historical Developments and Current Growth Metrics of the Sales Tax Software Market?
The sales tax software market has seen considerable growth due to a variety of factors.
• The market size of sales tax software has seen a quick expansion recently. It is expected to surge from $9.61 billion in 2024 to $10.68 billion in 2025, recording a compound annual growth rate (CAGR) of 11.2%.
The exponential growth during the historical period is credited to the escalating complexity of tax laws, proliferation of e-commerce, globalisation of trade, surge in demand for automation to minimize human errors, more stringent governmental compliance rules, increased uptake of cloud-based solutions and a rise in the need for updates of tax rates in real time.
What Does Future Hold for The Sales Tax Software Market By 2029?
The sales tax software market is expected to maintain its strong growth trajectory in upcoming years.
• Expectations are high for the sales tax software market, with predictions of swift expansion in the upcoming years. By 2029, this market is projected to reach $16.18 billion, boasting a compound annual growth rate (CAGR) of 10.9%.
Several factors are contributing to this expected increase during the forecast period, including the rising popularity of e-commerce and omnichannel retail, the expansion of global trade requiring adherence to various tax laws across borders, changing tax legislations, a mounting desire for automated processes to eliminate human errors, a heightened emphasis on data security and compliance, and a preference for cloud-based software solutions. Future trends during this time frame include the incorporation of AI to ensure precise tax rates, real-time updates for compliance, seamless integrations of ERP and e-commerce, sophisticated management of exemption certificates, the implementation of blockchain for audit trails, and the development of intuitive dashboards featuring predictive analytics.
What Are The Primary Growth Drivers In The Sales Tax Software Market?
The surge in digital transactions is anticipated to propel the expansion of the sales tax software market. These transactions refer to electronic transfers of value through online or mobile platforms, guaranteeing secure and efficient payments. This surge can be attributed to internet expansion, smartphone proliferation, advanced payment technologies, and a move towards cashless and contactless payment options. Sales tax software plays a vital role in overseeing tax compliance for digital transactions, guaranteeing precision and effectiveness in tax calculations across virtual platforms. For example, in June 2024, the Australia and New Zealand Banking Group - a finance services company based in Australia noted that global non-cash transactions in 2023 amounted to 1.3 trillion and are projected to soar to 2.3 trillion by 2027. Consequently, the surge in digital transactions is fueling the expansion of the sales tax software market.
What Is The Segmentation Of The Global Sales Tax Software Market?
The sales tax software market covered in this report is segmented –
1) By Solution: Tax filings, Consumer Use Tax Management, Other Solutions
2) By Deployment: Cloud, On-Premises
3) By Application: Sales Tax Calculation And Reporting, Tax Audit And Compliance, Tax Exemption Management, Tax Return Preparation
4) By End-User: Information Technology (IT) And Telecom, Banking, Financial Services, And Insurance (BFSI), Healthcare, Transportation, Retail, Other End Users
Subsegments:
1) By Tax Filings: Automated Tax Calculation, Electronic Filing, Tax Compliance Reporting
2) By Consumer Use Tax Management: Use Tax Calculation, Exemption Certificate Management, Audit And Compliance Tracking
3) By Other Solutions: VAT And GST Compliance, Sales Tax Rate Management, Cross-Border Tax Management
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How Are New Trends Impacting The Size Of The Sales Tax Software Market?
Major companies operating in the sales tax software market are focusing on developing advanced products, such as a cloud-based tax automation platform, to enhance user experience, streamline tax compliance processes, and ensure accuracy in tax calculations across diverse industries and jurisdictions. A cloud-based tax automation platform is a software solution hosted on the cloud that helps businesses streamline and automate tax-related processes, such as tax calculation, compliance, filing, reporting, and documentation. For instance, in May 2023, CereTax Inc., a US-based software company, launched its new user interface designed to simplify the sales tax automation process for businesses of all sizes. The new portal in CereTax's cloud-based tax automation platform simplifies sales tax management by enabling users to handle tax calculations, rules, and detailed reporting easily. Designed for simplicity and efficiency, the interface enhances operational continuity for businesses. By focusing on flexibility and user experience, the portal elevates the platform's capability to deliver advanced tax solutions while maintaining a user-centric approach.
Who Are the Key Players In The Sales Tax Software Market?
Major companies operating 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
What Are The Regional Insights Into The Sales Tax Software Market?
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 the sales tax software market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
