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Setting up automatic tax rates in the US

If you sell in the United States, you can use our TaxJar extension to calculate sales tax automatically at checkout, based on your customer’s shipping or billing address. This extension automatically calculates tax rates for states, counties, cities and zip codes, using TaxJar’s real-time sales tax data.

If you sell outside the US, you can add international tax rates by setting up manual tax rates.

TaxJar's automatic tax rates feature is free if your site is on any Website Commerce plan. If you're on the Website Business plan, you can upgrade your website subscription to a Commerce plan. If you stay on the Website Business plan, you'll need to sign up for TaxJar's Professional plan.
Note: This guide is available as a resource, but should not be construed or relied upon in any way as legal or tax 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 must be located in the United States and sell in the US to use this feature. If you sell outside the US, you can set manual tax rates for international orders.
  • It’s not possible to add product tax categories to member areas subscriptions, so these subscriptions are taxed at the standard sales tax rate.
  • It's not possible to exempt certain customers from paying sales tax.
  • Subscription products renew at the same tax rate used in the initial order, even if the standard sales tax rate changes over time.

Step 1 - Sign up for your TaxJar account

You’ll need to connect the TaxJar extension to your site and sign up for a TaxJar account before you can enable automatic tax rates. Also, ensure you add your business information to your TaxJar Business profile.

Note: If you signed up for TaxJar directly through their website and TaxJar shows you're on a trial, go to Why is my TaxJar plan on a trial? for next steps.

To connect the TaxJar extension and sign up for or log into your TaxJar account:

  1. In the Home menu, click Commerce, then click Taxes.
  2. To review details about TaxJar, click See Details.
  3. To connect the extension, click Connect.
  4. Choose the site you'd like to connect, then click Allow.
  5. In the TaxJar window, enter your information, then click Create Account to create your TaxJar account.
    • If you have an existing TaxJar account, you'll still enter your information, then click Create Account. After you click, a Try signing in link appears at the top of the page. Click the link, then log in with your TaxJar account information.
  6. After you log into your new TaxJar account, in the upper right-hand corner, click your email address. From the drop-down menu, select Business profile. Enter your business information in the fields and click Save information.

Step 2 - Add your business locations in TaxJar

After creating your TaxJar account and entering your Business profile information, add the registered states where you’ll charge sales tax. Learn more about the states where you have business locations, also called "nexus."

  1. Click Add State Registrations.
  2. Under Nexus states, select a state from the State drop-down menu and enter your information in the rest of the fields on the page.
  3. Check Enable TaxJar's API to calculate sales tax for this state.
  4. Click Save information.
  5. Click Add state if you'd like to add more states. Repeat these steps for each state where you'll charge sales tax.
  6. Go back to the Taxes panel in Squarespace.
    • If you haven’t set up manual tax rates, we enable your rates automatically.
    • If you previously set up manual tax rates, you’ll need to toggle Automatic rates on to start calculating tax automatically.

Any existing US tax rates you manually created are disabled. To use the original tax rates you set up, disable automatic rates.

After you turn on automatic rates, all orders from states you registered in TaxJar charge taxes at the standard sales tax rate. If a customer lives in a county or postal region that has a different tax rate, that rate is applied at checkout.

Step 3 - Add product tax categories (optional)

Product tax categories let you charge product-specific taxes during checkout. After you sign up for TaxJar and add business locations, you can add categories when editing your product details.

Keep in mind:

  • You can only add one tax category to each product in your store.
  • If you don’t add product tax categories, all of your products are taxed at the same sales tax rate, based on your business locations.
  • Squarespace uses categories provided by TaxJar. You may not always find tax categories that correspond exactly with the kinds of products you sell. If you're not sure which category to use for a specific product, we recommend consulting with your tax advisor to confirm the appropriate tax codes for your business.

To learn more about product tax categories, visit TaxJar.

How sales tax is calculated at checkout

When a customer checks out, the sales tax they're charged appears after entering their:

  • Shipping address - For physical products.
  • Billing address - For digital and service products. This also applies to local pickup, regardless of the product type. 

The order total updates to reflect the tax rate for their location.

Disable automatic rates

To disable automatic rates:

  1. In the Home menu, click Commerce, then click Taxes.
  2. Switch off the Use automatic rates toggle.
  3. Click Save.

All tax rates you added before switching to automatic rates are turned back on.

FAQ

Where should I collect sales tax?

You should collect sales tax in states where you have business locations, also called nexus. This includes states where you have a physical location, and possibly other states where you make sales, depending on the local laws. To learn more, contact a tax professional. You might also find TaxJar’s documentation helpful.

Where does the tax data come from?

Your store calculates sales tax automatically using TaxJar’s real-time sales tax data. If you have questions about the tax rates your store is charging, contact TaxJar.

Why didn’t my store charge sales tax?

Your store won’t charge sales tax after you enable automatic rates if an order:

I disconnected TaxJar. Why are some customers still being charged tax?

Tax rates set up through TaxJar may continue being added to orders, even after you disconnect your TaxJar extension. This happens for customers who signed up for recurring subscription products or memberships. The amount your customer pays remains the same. even after you disconnect TaxJar. Their total is based on their initial order, which includes the price of the product plus any taxes.

This doesn't happen with one-time orders. If your customer wants to continue their subscription, but doesn't want to continue paying the tax rate:

  1. You can cancel their subscription or membership fee. Your customer can also cancel their subscription or membership fee.
  2. Ask your customer to sign up again for their subscription or membership. Their new charges won't include taxes.

Where can I learn more about charging sales tax?

The best way to learn about your sales tax obligation is to consult with a tax advisor who understands your business. These TaxJar resources may also be helpful as an introduction:

Why is my TaxJar plan on a trial? My TaxJar plan should be free.

If your Squarespace website plan supports free automatic tax calculations and your TaxJar account shows your trial ending soon, this means you signed up for TaxJar directly through TaxJar's site. For help getting moved to the free TaxJar plan, contact TaxJar.

Can I connect more than one Squarespace site to my TaxJar account?

No. You can connect only one Squarespace site to your TaxJar account. To connect another Squarespace site to TaxJar, you'll need to create a second TaxJar account, using a different email address.

I'm in the United States. Why doesn't setting up automatic tax rates appear?

If you're in the US and the panel to set up automatic tax rates doesn't appear, this might be caused by VPN software on your computer. Using an IP address outside the US hides this tax feature, because it's only available in the US. If you're using a VPN, disable it, then connect to your internet service provider using their IP address.

Who do I contact for support?

For help enabling this extension or setting up your online store, contact us. You can also give feedback about the extension.

For questions about sales tax, rate calculation, or changing your TaxJar settings, contact TaxJar.

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Setting up automatic tax rates in the US