You either assist your users in avoiding taxes (probably a crime), or just shrug and say “We didn’t invent taxes”
Do your users not pay sales or property taxes on their day to day lives? How is it your business’ job to figure this out for your customers?
Would a referral link to H&R Block solve this?
However, these merchants are reluctant to use this sort of service because if they used it, our platform legally has to report this in a 1099-K to the IRS. Same as any marketplace these days.
As for the referral suggestion, we actually worked with tax professionals in order to do just that. We figured if we personally vetted some tax pros for referrals vs a link to something like H&R Block, it'd help make the difference. It didn't.
(Also, we use Stripe Tax to handle sales tax for the customers who do use the monetized features. They love it!)
I would point out that avoiding paying tax is a crime, that you don’t want to go to jail because of their preferences, and invite the people that want to commit the crime of tax avoidance (with your help) to take their business elsewhere.