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Taxes in Native Store

native-store.png This content is only relevant for native store.

To determine which eCommerce solution you are on, see How do I know if I am using Native eCommerce or Third Party eCommerce?

You need to set tax zones and rates for each country you ship to and are required to collect taxes for. Tax zones and rates can be set manually, or you can use Avalara to automate the process.

Manually Create, Edit, or Delete Tax Zones and Rates

You can manually create tax zones and rates in native store.

Set Up Tax Zones and Rates

To set up tax zones and rates:

  1. In the side panel, click Store, then click Store Management.

  2. Click Taxes.

  3. Click +Add tax zone.

  4. Select your country from the drop-down menu, and region if applicable.

  5. Complete the Tax Name, Tax Number, and Tax Rate fields.

    • Tax name. The name that appears on your invoice.

    • Tax number. The number that appears on your invoice.

  6. Click Save.

Edit Tax Zones and Rates

If you expand your customer base, you may need to update your tax rates or add another region to your tax zones.

To edit tax zones or rates:

  1. In the side panel, click Store, then click Store Management.

  2. Click Taxes.

  3. Click the three horizontal dots (three horizontal dot icon) icon next to the tax zone you want to edit and select Edit Tax Rate.

  4. Click Save after making your edits.

Delete Tax Zones and Rates

To delete tax zones or rates:

  1. In the side panel, click Store, then click Store Management.

  2. Click Taxes.

  3. Click the three horizontal dots (three horizontal dot icon) icon next to the tax zone you want to delete and select Delete tax rate.

  4. Click Delete in the popup.

Automate Taxes with Avalara

Taxes can be convoluted and confusing, but they don’t have to be, automate them with Avalara, our tax compliance partner. Their software, Avalara AvaTax, integrates seamlessly and offers a variety of benefits.

Here are some key benefits:

  • They stay up-to-date on tax rates so you don’t have to.

  • Tax rates are based on geolocation, item taxability, new legislation, tax regulations, and more.

  • They can calculate rates for a variety of tax types, including value-added tax (VAT), sales and use tax, consumer use tax, and more.

  • They offer global tax calculations and compliance for cross-border sales.

  • When required, taxes are calculated automatically for shipping.

  • Orders automatically sync in your Avalara account, this includes refunds (syncing can be disabled, see the Un-syncing Orders section for details).

For detailed information on Avalara and AvaTax, see Avalara Calculations.

Note

  • The automated taxes feature is available on the Advanced plan and higher.

  • Currently only available for the United States and Canada (additional countries coming soon).

  • Currently memberships will be taxed the default automated taxes based on sales tax nexus of the customer’s address.

  • Manual tax zones set up prior to switching to automated will be saved.

  • Google Pay wallets are not supported due to a restriction in Avalara.

Configure Automated Taxes

To configure automated taxes:

  1. In the side panel, click Store, then click Store Management.

  2. Click Taxes.

  3. (Optional) If you are not on the advanced plan or higher, click on the Upgrade to automate tax button. From here you will be prompted to upgrade your plan.

  4. Click Get started.

  5. Fill out the form to create an Avalara account. If you already have an Avalara account, click Log in.

  6. After logging in or creating an Avalara account, in your store, on the tax screen, click Add or Manage Taxes. This will take you to your Avalara account in a new window or tab. For detailed information on setting up taxes in Avalara, see AvaTax.

  7. Once regions are set in Avalara, they will appear on the tax screen as read only in Store Management. Any changes you would like to make to your taxes will also be done through your Avalara account.

    Note

    Changes to tax regions will be implemented on the live store upon saving in Avalara (republishing is not needed).

Syncing and Statuses of Orders in Avalara

Unless manually changed, all orders will sync with Avalara (this includes refunded orders). In Avalara there are also statuses, some of which will be specific to just Avalara. For a full list of statuses, see Avalara’s Transaction statuses page.

Unsync Orders with Avalara

To un-sync orders:

  1. In the side panel, click Store, then click Store Management.

  2. Click Taxes.

  3. Click the three horizontal dots (three horizontal dot icon) next to Add or Manage Taxes.

  4. Click Disable transactions recording in Avalara.

Switch Back to Manual Taxes

You can also switch back to manual taxes. This will disconnect your Avalara account and result in various implications.

The implications are:

  • Future purchases will not be reported in Avalara.

  • Refunds will not be reflected in Avalara, this includes refunds processed for purchases made while automated taxes were on.

  • Tax regions set up with automated taxes will no longer be available in the store when using manual taxes (you will need to set up manual taxes).

  • Taxes will no longer be auto calculated at checkout for your customers (you need to set up manual taxes).

Note

Switching to manual taxes will not affect your store plan or its included features.

To switch to manual taxes:

  1. In the side panel, click Store, then click Store Management.

  2. Click Taxes.

  3. Click the three horizontal dots (three horizontal dot icon) next to Add or Manage Taxes.

  4. Click Switch to manual taxes.

  5. Manual taxes will now be active, including any tax zones that were set up prior to switching to automated taxes.

Include Taxes in Product Price

You can enable taxes to be included in the product price in order to comply with local laws. When including tax in the product price, you can either enter prices that already include tax (gross pricing), or enter pre-tax prices and allow the platform calculate and add tax for you (net pricing). Gross pricing is helpful when the merchant wants to display rounded prices, like 50Є or 100Є instead of 41.67Є or 83.33Є. Net pricing is helpful when the merchant sells in different tax inclusive markets with different tax rates.

Whether you choose to enter net prices or gross prices, the price including taxes is displayed on the product page, Product Gallery widget, checkout page, and in order confirmation emails. On the product page, there will be a note that the total product price might change due to the buyer’s shipping location.

It is important to note that when using discounts with gross product prices, the discount is applied to the included tax as well. For example, a $100 product with a 20% tax rate is priced as $120 in the product catalog. When the shopper uses a 25% off coupon, the price of the item changes to $90 because the 25% is taken off of the gross product price of $120, which includes the tax.

Note

  • This setting is only available for manual taxes. If you enable Avalara after enabling taxes included in product price, you will receive a message that your tax settings will be changed to taxes added at checkout.

  • This setting is enabled for your store as a whole. It currently cannot be enabled per shipping zone.

  • It is important to note that merchants are solely responsible for understanding and complying with tax obligations under applicable laws. We do not provide tax advice and disclaim liability for any tax-related inaccuracy and recommend that merchants seek professional advice.

To include taxes in product price:

  1. In the side panel, click Store, then click Store Management.

  2. Click Taxes.

  3. Scroll down to the Tax Settings section and select Include Tax in Product Price.

  4. Select one of the following options:

    • Enter gross product price. If you select this option, the price of the item you enter in the product catalog needs to include both the item price and the tax. Following are important notes about using gross pricing:

      • This option can only be used for stores with one tax zone.

      • When a shopper uses a discount, the discount is applied to the tax as well since the tax is included in the gross price. For example, a $100 product with a 20% tax rate is priced as $120 in the product catalog. When the shopper uses a 25% off coupon, the price of the item changes to $90 because the 25% is taken off of the gross product price of $120, which includes the tax.

    • Enter net product price. If you select this option, the price of the item you enter in the product catalog is the base price of the item. The system will use your default tax zone to calculate and display the total price including tax in the storefront.

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  5. Depending on whether you selected net or gross product prices, adjust your product prices accordingly.

Tax Groups

Note

This feature will not be visible if you are already using Avalara, since Avalara automatically calculates the correct tax rate per tax code.

You can create tax groups to apply different tax rates for specific products. This can be helpful when there is a category of products that has specific tax rates in certain countries. For example, in Germany, books have a reduced tax rate of 7% in contrast to the standard VAT of 19%.

After enabling a tax rate for a tax zone, the tax rate will automatically override that zone’s tax settings.

Note

Products must be added to your store before you can create Tax Groups.

To enable manual taxes per product:

  1. In the side panel, click Store, then click Store Management.

  2. Click Taxes.

  3. Click + Create Tax Group.

  4. Type a name for the tax group and then use the dropdown menu to select the products from the product catalog to add to the group. Click Create Tax Group.

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  5. (Optional) If you need to edit or delete the tax group, click the three dot icon next to the desired group and select either Edit Tax Group or Delete. Note that a product can only be added to one tax group at a time. If you edit or create a new group and add a product that was previously in a different group, it will be added to the new group and removed from the old group. If you delete a group, all products in that group will have the default tax rate.

  6. Navigate back to the Taxes screen and click the tax zone this tax group is applicable to. Or, if necessary, create a new tax zone.

  7. Scroll down to the Tax groups override section and enter a tax rate in the Tax override (%) field. If you sell to specific regions in the country, you will be prompted to enter a tax rate per region.

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  8. Click Save.

Taxes on Shipping Fees

You can customize the way taxes are applied to shipping fees per tax zone. Some regions require tax on shipping, while other regions exempt tax from shipping or have different tax rate.

To customize taxes on shipping fees:

  1. In the side panel, click Store, then click Store Management.

  2. Click Taxes.

  3. Click to open the desired tax zone and scroll down to the Shipping tax override section.

  4. Enable the Shipping tax override toggle and enter a tax rate in the Tax override (%) field. If a region is exempt from shipping taxes, you can enter 0% in this field.

  5. Click Save.

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