# How to integrate Taxjar MCP with Vercel AI SDK v6

```json
{
  "title": "How to integrate Taxjar MCP with Vercel AI SDK v6",
  "toolkit": "Taxjar",
  "toolkit_slug": "taxjar",
  "framework": "Vercel AI SDK",
  "framework_slug": "ai-sdk",
  "url": "https://composio.dev/toolkits/taxjar/framework/ai-sdk",
  "markdown_url": "https://composio.dev/toolkits/taxjar/framework/ai-sdk.md",
  "updated_at": "2026-05-12T10:27:58.416Z"
}
```

## Introduction

This guide walks you through connecting Taxjar to Vercel AI SDK v6 using the Composio tool router. By the end, you'll have a working Taxjar agent that can calculate sales tax for a new order, list all order transactions this month, show your current nexus regions through natural language commands.
This guide will help you understand how to give your Vercel AI SDK agent real control over a Taxjar account through Composio's Taxjar MCP server.
Before we dive in, let's take a quick look at the key ideas and tools involved.

## Also integrate Taxjar with

- [OpenAI Agents SDK](https://composio.dev/toolkits/taxjar/framework/open-ai-agents-sdk)
- [Claude Agent SDK](https://composio.dev/toolkits/taxjar/framework/claude-agents-sdk)
- [Claude Code](https://composio.dev/toolkits/taxjar/framework/claude-code)
- [Claude Cowork](https://composio.dev/toolkits/taxjar/framework/claude-cowork)
- [Codex](https://composio.dev/toolkits/taxjar/framework/codex)
- [OpenClaw](https://composio.dev/toolkits/taxjar/framework/openclaw)
- [Hermes](https://composio.dev/toolkits/taxjar/framework/hermes-agent)
- [CLI](https://composio.dev/toolkits/taxjar/framework/cli)
- [Google ADK](https://composio.dev/toolkits/taxjar/framework/google-adk)
- [LangChain](https://composio.dev/toolkits/taxjar/framework/langchain)
- [Mastra AI](https://composio.dev/toolkits/taxjar/framework/mastra-ai)
- [LlamaIndex](https://composio.dev/toolkits/taxjar/framework/llama-index)
- [CrewAI](https://composio.dev/toolkits/taxjar/framework/crew-ai)

## TL;DR

Here's what you'll learn:
- How to set up and configure a Vercel AI SDK agent with Taxjar integration
- Using Composio's Tool Router to dynamically load and access Taxjar tools
- Creating an MCP client connection using HTTP transport
- Building an interactive CLI chat interface with conversation history management
- Handling tool calls and results within the Vercel AI SDK framework

## What is Vercel AI SDK?

The Vercel AI SDK is a TypeScript library for building AI-powered applications. It provides tools for creating agents that can use external services and maintain conversation state.
Key features include:
- streamText: Core function for streaming responses with real-time tool support
- MCP Client: Built-in support for Model Context Protocol via @ai-sdk/mcp
- Step Counting: Control multi-step tool execution with stopWhen: stepCountIs()
- OpenAI Provider: Native integration with OpenAI models

## What is the Taxjar MCP server, and what's possible with it?

The Taxjar MCP server is an implementation of the Model Context Protocol that connects your AI agent and assistants like Claude, Cursor, etc directly to your Taxjar account. It provides structured and secure access to your sales tax data, so your agent can perform actions like calculating sales tax, managing transactions, listing customers, and monitoring nexus regions on your behalf.
- Real-time tax calculation for orders: Instantly calculate accurate sales tax for new orders, factoring in nexus addresses, line items, shipping, and exemptions.
- Order and refund transaction management: Let your agent create, list, or delete order and refund transactions to streamline your sales and returns workflow.
- Customer database access: Effortlessly retrieve, list, or delete customer records for tax reporting and compliance purposes.
- Nexus region insights: Quickly identify and list all nexus regions where your business has sales tax obligations.
- Automated transaction reporting: Access up-to-date lists of transactions and refunds for reconciliation, filing, and audit readiness.

## Supported Tools

| Tool slug | Name | Description |
|---|---|---|
| `TAXJAR_CALCULATE_SALES_TAX_FOR_AN_ORDER` | Calculate Sales Tax For An Order | Tool to calculate sales tax for an order. Use when you need an accurate tax calculation including nexus addresses, line items, shipping, and exemptions. |
| `TAXJAR_CREATE_CUSTOMER` | Create Customer | Tool to create a new customer with exemption information. Use when you need to add a customer to your TaxJar account for tax exemption management. |
| `TAXJAR_CREATE_ORDER_TRANSACTION` | Create Order Transaction | Creates a new order transaction in TaxJar for sales tax reporting and compliance. This action records order transactions that will appear in the TaxJar dashboard for tax filing purposes. The transaction includes customer location, order amounts, shipping costs, and sales tax collected. Important: The 'amount' field must include shipping but exclude sales tax. If line_items are provided, their sum (quantity * unit_price - discount) must equal amount minus shipping. |
| `TAXJAR_CREATE_REFUND_TRANSACTION` | Create Refund Transaction | Tool to create a new refund transaction. Use after confirming refund details. |
| `TAXJAR_DELETE_CUSTOMER` | Delete Customer | Tool to delete an existing customer. Use when you need to remove a previously created customer by its ID. Example: "Delete customer cust_12345". |
| `TAXJAR_DELETE_ORDER_TRANSACTION` | Delete Order Transaction | Tool to delete an existing order transaction. Use when you need to remove a previously created order transaction by its ID. Example: "Delete transaction abc123". |
| `TAXJAR_DELETE_REFUND_TRANSACTION` | Delete Refund Transaction | Tool to delete an existing refund transaction. Use when you need to remove a previously created refund transaction by its ID. Example: "Delete refund 243345". |
| `TAXJAR_LIST_CUSTOMERS` | List Customers | Lists all customer IDs from your TaxJar account. Returns a paginated list of customer IDs (strings). To get full details for a specific customer (including name, address, exemption type, etc.), use the customer ID with the 'Show Customer' action. Use this action to: - Browse all customers in your TaxJar account - Find customer IDs for further operations - Check which customers have been created |
| `TAXJAR_LIST_NEXUS_REGIONS` | List Nexus Regions | Tool to list existing nexus regions for an account. Use after authenticating your account to discover where you have nexus for sales tax purposes. |
| `TAXJAR_LIST_ORDER_TRANSACTIONS` | List Order Transactions | List order transaction IDs within a date range. Returns an array of transaction IDs (strings) for orders created between the specified dates. Use this to discover which orders exist in a date range, then use SHOW_ORDER_TRANSACTION to get details for specific IDs. |
| `TAXJAR_LIST_REFUND_TRANSACTIONS` | List refund transactions | Lists refund transaction IDs within a specified date range. Returns an array of transaction IDs only. To get detailed information about a specific refund, use the 'Show refund transaction' action with the ID. Useful for finding refunds created through the TaxJar API within a specific time period. |
| `TAXJAR_LIST_TAX_CATEGORIES` | List Tax Categories | Tool to list all product tax categories and their codes. Use when you need to discover available tax categories before assigning them to products. |
| `TAXJAR_SHOW_CUSTOMER` | Show Customer | Tool to show an existing customer. Use when you need to retrieve details of a specific customer via TaxJar API. |
| `TAXJAR_SHOW_ORDER_TRANSACTION` | Show Order Transaction | Tool to show an existing order transaction by ID. Use when you need to retrieve full details of a specific order transaction after creation or listing. |
| `TAXJAR_SHOW_REFUND_TRANSACTION` | Show Refund Transaction | Retrieves detailed information about a specific refund transaction from TaxJar. Use this tool when you need to: - View complete details of a refund transaction including amounts, addresses, and line items - Verify refund transaction data that was previously created - Audit refund information for tax reporting purposes Requires a valid transaction_id that was previously created through TaxJar's API. |
| `TAXJAR_SHOW_TAX_RATES_FOR_A_LOCATION` | Show Tax Rates for a Location | Tool to show sales tax rates for a location. Use when you need to retrieve sales tax rates for a specific ZIP code with optional address details (city, state, country, street). |
| `TAXJAR_SUMMARIZE_TAX_RATES_FOR_ALL_REGIONS` | Summarize Tax Rates for All Regions | Tool to retrieve minimum and average sales tax rates by region. Use when you need a backup of regional tax summary rates. |
| `TAXJAR_UPDATE_CUSTOMER` | Update Customer | Tool to update an existing customer in TaxJar. Use when you need to modify customer details such as exemption type, name, or address information. |
| `TAXJAR_UPDATE_ORDER_TRANSACTION` | Update Order Transaction | Tool to update an existing order transaction. Use when adjusting order details such as amount, shipping, or line items after creation. |
| `TAXJAR_UPDATE_REFUND_TRANSACTION` | Update Refund Transaction | Tool to update an existing refund transaction. Use when adjusting refund details such as amount, shipping, or line items after creation. |
| `TAXJAR_VALIDATE_VAT_NUMBER` | Validate VAT Number | Validates EU VAT identification numbers against the VIES (VAT Information Exchange System) database. Use this tool to: - Verify VAT number format and validity - Check if a VAT number is registered and active in the EU - Retrieve associated company name and address when available - Confirm tax-exempt eligibility before processing transactions The validation queries the European VIES database when available, returning company details for valid registrations. When VIES is unavailable, it falls back to format-based validation using regex patterns. |

## Supported Triggers

None listed.

## Creating MCP Server - Stand-alone vs Composio SDK

The Taxjar MCP server is an implementation of the Model Context Protocol that connects your AI agent to Taxjar. It provides structured and secure access so your agent can perform Taxjar operations on your behalf through a secure, permission-based interface.
With Composio's managed implementation, you don't have to create your own developer app. For production, if you're building an end product, we recommend using your own credentials. The managed server helps you prototype fast and go from 0-1 faster.

## Step-by-step Guide

### 1. Prerequisites

Before you begin, make sure you have:
- Node.js and npm installed
- A Composio account with API key
- An OpenAI API key

### 1. Getting API Keys for OpenAI and Composio

OpenAI API Key
- Go to the [OpenAI dashboard](https://platform.openai.com/settings/organization/api-keys) and create an API key. You'll need credits to use the models, or you can connect to another model provider.
- Keep the API key safe.
Composio API Key
- Log in to the [Composio dashboard](https://dashboard.composio.dev?utm_source=toolkits&utm_medium=framework_docs).
- Navigate to your API settings and generate a new API key.
- Store this key securely as you'll need it for authentication.

### 2. Install required dependencies

First, install the necessary packages for your project.
What you're installing:
- @ai-sdk/openai: Vercel AI SDK's OpenAI provider
- @ai-sdk/mcp: MCP client for Vercel AI SDK
- @composio/core: Composio SDK for tool integration
- ai: Core Vercel AI SDK
- dotenv: Environment variable management
```bash
npm install @ai-sdk/openai @ai-sdk/mcp @composio/core ai dotenv
```

### 3. Set up environment variables

Create a .env file in your project root.
What's needed:
- OPENAI_API_KEY: Your OpenAI API key for GPT model access
- COMPOSIO_API_KEY: Your Composio API key for tool access
- COMPOSIO_USER_ID: A unique identifier for the user session
```bash
OPENAI_API_KEY=your_openai_api_key_here
COMPOSIO_API_KEY=your_composio_api_key_here
COMPOSIO_USER_ID=your_user_id_here
```

### 4. Import required modules and validate environment

What's happening:
- We're importing all necessary libraries including Vercel AI SDK's OpenAI provider and Composio
- The dotenv/config import automatically loads environment variables
- The MCP client import enables connection to Composio's tool server
```typescript
import "dotenv/config";
import { openai } from "@ai-sdk/openai";
import { Composio } from "@composio/core";
import * as readline from "readline";
import { streamText, type ModelMessage, stepCountIs } from "ai";
import { createMCPClient } from "@ai-sdk/mcp";

const composioAPIKey = process.env.COMPOSIO_API_KEY;
const composioUserID = process.env.COMPOSIO_USER_ID;

if (!process.env.OPENAI_API_KEY) throw new Error("OPENAI_API_KEY is not set");
if (!composioAPIKey) throw new Error("COMPOSIO_API_KEY is not set");
if (!composioUserID) throw new Error("COMPOSIO_USER_ID is not set");

const composio = new Composio({
  apiKey: composioAPIKey,
});
```

### 5. Create Tool Router session and initialize MCP client

What's happening:
- We're creating a Tool Router session that gives your agent access to Taxjar tools
- The create method takes the user ID and specifies which toolkits should be available
- The returned mcp object contains the URL and authentication headers needed to connect to the MCP server
- This session provides access to all Taxjar-related tools through the MCP protocol
```typescript
async function main() {
  // Create a tool router session for the user
  const session = await composio.create(composioUserID!, {
    toolkits: ["taxjar"],
  });

  const mcpUrl = session.mcp.url;
```

### 6. Connect to MCP server and retrieve tools

What's happening:
- We're creating an MCP client that connects to our Composio Tool Router session via HTTP
- The mcp.url provides the endpoint, and mcp.headers contains authentication credentials
- The type: "http" is important - Composio requires HTTP transport
- tools() retrieves all available Taxjar tools that the agent can use
```typescript
const mcpClient = await createMCPClient({
  transport: {
    type: "http",
    url: mcpUrl,
    headers: session.mcp.headers, // Authentication headers for the Composio MCP server
  },
});

const tools = await mcpClient.tools();
```

### 7. Initialize conversation and CLI interface

What's happening:
- We initialize an empty messages array to maintain conversation history
- A readline interface is created to accept user input from the command line
- Instructions are displayed to guide the user on how to interact with the agent
```typescript
let messages: ModelMessage[] = [];

console.log("Chat started! Type 'exit' or 'quit' to end the conversation.\n");
console.log(
  "Ask any questions related to taxjar, like summarize my last 5 emails, send an email, etc... :)))\n",
);

const rl = readline.createInterface({
  input: process.stdin,
  output: process.stdout,
  prompt: "> ",
});

rl.prompt();
```

### 8. Handle user input and stream responses with real-time tool feedback

What's happening:
- We use streamText instead of generateText to stream responses in real-time
- toolChoice: "auto" allows the model to decide when to use Taxjar tools
- stopWhen: stepCountIs(10) allows up to 10 steps for complex multi-tool operations
- onStepFinish callback displays which tools are being used in real-time
- We iterate through the text stream to create a typewriter effect as the agent responds
- The complete response is added to conversation history to maintain context
- Errors are caught and displayed with helpful retry suggestions
```typescript
rl.on("line", async (userInput: string) => {
  const trimmedInput = userInput.trim();

  if (["exit", "quit", "bye"].includes(trimmedInput.toLowerCase())) {
    console.log("\nGoodbye!");
    rl.close();
    process.exit(0);
  }

  if (!trimmedInput) {
    rl.prompt();
    return;
  }

  messages.push({ role: "user", content: trimmedInput });
  console.log("\nAgent is thinking...\n");

  try {
    const stream = streamText({
      model: openai("gpt-5"),
      messages,
      tools,
      toolChoice: "auto",
      stopWhen: stepCountIs(10),
      onStepFinish: (step) => {
        for (const toolCall of step.toolCalls) {
          console.log(`[Using tool: ${toolCall.toolName}]`);
          }
          if (step.toolCalls.length > 0) {
            console.log(""); // Add space after tool calls
          }
        },
      });

      for await (const chunk of stream.textStream) {
        process.stdout.write(chunk);
      }

      console.log("\n\n---\n");

      // Get final result for message history
      const response = await stream.response;
      if (response?.messages?.length) {
        messages.push(...response.messages);
      }
    } catch (error) {
      console.error("\nAn error occurred while talking to the agent:");
      console.error(error);
      console.log(
        "\nYou can try again or restart the app if it keeps happening.\n",
      );
    } finally {
      rl.prompt();
    }
  });

  rl.on("close", async () => {
    await mcpClient.close();
    console.log("\n👋 Session ended.");
    process.exit(0);
  });
}

main().catch((err) => {
  console.error("Fatal error:", err);
  process.exit(1);
});
```

## Complete Code

```typescript
import "dotenv/config";
import { openai } from "@ai-sdk/openai";
import { Composio } from "@composio/core";
import * as readline from "readline";
import { streamText, type ModelMessage, stepCountIs } from "ai";
import { createMCPClient } from "@ai-sdk/mcp";

const composioAPIKey = process.env.COMPOSIO_API_KEY;
const composioUserID = process.env.COMPOSIO_USER_ID;

if (!process.env.OPENAI_API_KEY) throw new Error("OPENAI_API_KEY is not set");
if (!composioAPIKey) throw new Error("COMPOSIO_API_KEY is not set");
if (!composioUserID) throw new Error("COMPOSIO_USER_ID is not set");

const composio = new Composio({
  apiKey: composioAPIKey,
});

async function main() {
  // Create a tool router session for the user
  const session = await composio.create(composioUserID!, {
    toolkits: ["taxjar"],
  });

  const mcpUrl = session.mcp.url;

  const mcpClient = await createMCPClient({
    transport: {
      type: "http",
      url: mcpUrl,
      headers: session.mcp.headers, // Authentication headers for the Composio MCP server
    },
  });

  const tools = await mcpClient.tools();

  let messages: ModelMessage[] = [];

  console.log("Chat started! Type 'exit' or 'quit' to end the conversation.\n");
  console.log(
    "Ask any questions related to taxjar, like summarize my last 5 emails, send an email, etc... :)))\n",
  );

  const rl = readline.createInterface({
    input: process.stdin,
    output: process.stdout,
    prompt: "> ",
  });

  rl.prompt();

  rl.on("line", async (userInput: string) => {
    const trimmedInput = userInput.trim();

    if (["exit", "quit", "bye"].includes(trimmedInput.toLowerCase())) {
      console.log("\nGoodbye!");
      rl.close();
      process.exit(0);
    }

    if (!trimmedInput) {
      rl.prompt();
      return;
    }

    messages.push({ role: "user", content: trimmedInput });
    console.log("\nAgent is thinking...\n");

    try {
      const stream = streamText({
        model: openai("gpt-5"),
        messages,
        tools,
        toolChoice: "auto",
        stopWhen: stepCountIs(10),
        onStepFinish: (step) => {
          for (const toolCall of step.toolCalls) {
            console.log(`[Using tool: ${toolCall.toolName}]`);
          }
          if (step.toolCalls.length > 0) {
            console.log(""); // Add space after tool calls
          }
        },
      });

      for await (const chunk of stream.textStream) {
        process.stdout.write(chunk);
      }

      console.log("\n\n---\n");

      // Get final result for message history
      const response = await stream.response;
      if (response?.messages?.length) {
        messages.push(...response.messages);
      }
    } catch (error) {
      console.error("\nAn error occurred while talking to the agent:");
      console.error(error);
      console.log(
        "\nYou can try again or restart the app if it keeps happening.\n",
      );
    } finally {
      rl.prompt();
    }
  });

  rl.on("close", async () => {
    await mcpClient.close();
    console.log("\n👋 Session ended.");
    process.exit(0);
  });
}

main().catch((err) => {
  console.error("Fatal error:", err);
  process.exit(1);
});
```

## Conclusion

You've successfully built a Taxjar agent using the Vercel AI SDK with streaming capabilities! This implementation provides a powerful foundation for building AI applications with natural language interfaces and real-time feedback.
Key features of this implementation:
- Real-time streaming responses for a better user experience with typewriter effect
- Live tool execution feedback showing which tools are being used as the agent works
- Dynamic tool loading through Composio's Tool Router with secure authentication
- Multi-step tool execution with configurable step limits (up to 10 steps)
- Comprehensive error handling for robust agent execution
- Conversation history maintenance for context-aware responses
You can extend this further by adding custom error handling, implementing specific business logic, or integrating additional Composio toolkits to create multi-app workflows.

## How to build Taxjar MCP Agent with another framework

- [OpenAI Agents SDK](https://composio.dev/toolkits/taxjar/framework/open-ai-agents-sdk)
- [Claude Agent SDK](https://composio.dev/toolkits/taxjar/framework/claude-agents-sdk)
- [Claude Code](https://composio.dev/toolkits/taxjar/framework/claude-code)
- [Claude Cowork](https://composio.dev/toolkits/taxjar/framework/claude-cowork)
- [Codex](https://composio.dev/toolkits/taxjar/framework/codex)
- [OpenClaw](https://composio.dev/toolkits/taxjar/framework/openclaw)
- [Hermes](https://composio.dev/toolkits/taxjar/framework/hermes-agent)
- [CLI](https://composio.dev/toolkits/taxjar/framework/cli)
- [Google ADK](https://composio.dev/toolkits/taxjar/framework/google-adk)
- [LangChain](https://composio.dev/toolkits/taxjar/framework/langchain)
- [Mastra AI](https://composio.dev/toolkits/taxjar/framework/mastra-ai)
- [LlamaIndex](https://composio.dev/toolkits/taxjar/framework/llama-index)
- [CrewAI](https://composio.dev/toolkits/taxjar/framework/crew-ai)

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- [Eagle doc](https://composio.dev/toolkits/eagle_doc) - Eagle doc is an AI-powered OCR API for invoices and receipts. It delivers fast, reliable, and accurate document data extraction for seamless automation.
- [Elorus](https://composio.dev/toolkits/elorus) - Elorus is an online invoicing and time-tracking software for freelancers and small businesses. Easily manage finances, bill clients, and track work in one place.
- [Eodhd apis](https://composio.dev/toolkits/eodhd_apis) - Eodhd apis delivers comprehensive financial data, including live and historical stock prices, via robust APIs. Easily access reliable, up-to-date market insights to power your apps, dashboards, and analytics.
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## Frequently Asked Questions

### What are the differences in Tool Router MCP and Taxjar MCP?

With a standalone Taxjar MCP server, the agents and LLMs can only access a fixed set of Taxjar tools tied to that server. However, with the Composio Tool Router, agents can dynamically load tools from Taxjar and many other apps based on the task at hand, all through a single MCP endpoint.

### Can I use Tool Router MCP with Vercel AI SDK v6?

Yes, you can. Vercel AI SDK v6 fully supports MCP integration. You get structured tool calling, message history handling, and model orchestration while Tool Router takes care of discovering and serving the right Taxjar tools.

### Can I manage the permissions and scopes for Taxjar while using Tool Router?

Yes, absolutely. You can configure which Taxjar scopes and actions are allowed when connecting your account to Composio. You can also bring your own OAuth credentials or API configuration so you keep full control over what the agent can do.

### How safe is my data with Composio Tool Router?

All sensitive data such as tokens, keys, and configuration is fully encrypted at rest and in transit. Composio is SOC 2 Type 2 compliant and follows strict security practices so your Taxjar data and credentials are handled as safely as possible.

---
[See all toolkits](https://composio.dev/toolkits) · [Composio docs](https://docs.composio.dev/llms.txt)
