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Setting up taxes in Squarespace Commerce

You can create tax rules for the countries, states, provinces, and United States Zip Codes where you ship products. This guide covers how to manually enter your store's tax rules.

For help with VAT, GST, and tax-inclusive pricing, visit Collecting VAT or GST.

Note: This guide is available as a resource, but should not be construed or relied upon in any way as legal or accounting advice. Per our Terms of Service, Squarespace doesn't provide advice or recommendations regarding laws applicable to your site or business. If you have questions about collecting taxes, you can consult with a tax advisor.

Before you begin

  • You can use this helpful resource for checking US state sales laws.
  • The customer's shipping address determines tax for physical product purchases.
  • The customer's billing address determines tax for digital and service product purchases.
  • Gift cards purchases aren't subject to tax.

Step 1 - Open the Taxes panel

In the Home Menu, click Settings, and then click Taxes.

TaxesCommerce.jpg

Step 2 - Add country tax rates

You can add tax rules for the countries/nations where you ship products. To do this:

  1. Click Add Country.

TaxesPanel2.png

  1. Select a country from the Country drop-down menu.
  2. Type the Tax Name and sales tax rate for that country.

TaxesPanel3.png

  1. If you're required to charge tax on shipping in this country, you can check Charge Tax on Shipping.
  2. If you're required to charge tax on service products, you can check Charge Tax on Services.
  3. Click Save to publish your changes. 

Step 3 - Add state or province tax rules (United States and Canada)

If you're creating tax rules for the United States or Canada, you can add state or province tax rules:

  1. Hover over the country and click add state or add province.

  1. Choose the State or Province from the drop-down menu.
  2. Enter the sales tax rate.
  3. Click Save.

Step 4 - Add local tax rules (United States)

Local tax rules can apply to a single Zip Code or a range of Zip Codes in one state. This allows you to set tax rules compliant with various tax laws within one area. To do this:

  1. Hover over the state you added and click add local.

  1. Click Single Zip Code or Range of Zip Codes, and follow the next steps. 

Single Zip Code

To add a tax rule for a single Zip Code:

  1. Click Single Zip Code.
  2. Add the Zip Code and tax tax rate.
  3. Click Save.

Range of Zip Codes

To add tax rules for a region/range of Zip Codes:

  1. Click Range of Zip Codes.
  2. Add the start and end Zip Codes and the tax rate for that region.
  3. Click Save

Edit a tax rule

You can edit or remove a tax rule by clicking the rule in the Taxes panel.

  • Removing a country tax rule removes all state and local tax rules that apply to it.
  • Removing a state tax rule removes all local tax rules for the state. 

Tax-inclusive pricing (optional)

Tax-inclusive pricing sets prices to include tax, rather than add tax at checkout.

For example, if a product costs $120 and includes tax (at a rate of 20%) customers will see the $120 price in your store. In order confirmation emails, the price is broken down into the $100 net product price and $20 tax charge.

To enable this:

  1. In the Home Menu, click Settings.
  2. Click Taxes.
  3. Click the .
  4. Check Tax is Included in Product Prices.
  5. Click Save.

How taxes are calculated and shown in an order

After setting up your rules, the tax applied to an order will display at checkout once a customer enters their address. The tax is based on:

  • The shipping address for physical product purchases
  • The billing address for digital and service product purchases

If a customer uses a discount, tax is calculated based on the discounted price. If multiple taxes apply (for example, a state and local tax) both taxes will be charged but won't compound.

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Setting up taxes in Squarespace Commerce