How To Add Taxes & FAQ

Taxes are incredibly complicated. As much as we may wish they would just magically pay for themselves, we must properly charge customers taxes. Luckily, our software makes it incredibly easy to calculate and add taxes to a store.

Calculated Taxes vs Manual Taxes

Calculated taxes are useful when selling to customers in different states or different tax jurisdictions. Whereas manual taxes allow you to charge the same percentage of tax to all customers. For calculated taxes, we use TaxJar a third-party software. TaxJar chooses the correct sales tax rate based on your company's address or locations and the customer's shipping/billing addresses.

What tax method to use if you're unsure?

If you're unsure we recommend using calculated taxes. This is because TaxJar automatically charges the correct taxes at the right time (including Tax-Free Weekends!) provided they are set up properly.

Note: Calculated taxes cannot be used on a Purchase Order store. If you need to collect taxes on a PO store, you must set up a manual tax on the store. 

Add Primary Location & Nexus:

Step 1: If this is your first time using calculated taxes, click on "Manage your tax settings" to set up your company's address and any other locations you may have.

Note: For the most accurate sales tax to be calculated, make sure to enter the full address under "Your States/Provinces with Nexus" including street address, city, county, and zip code. This is especially important for origin-based sales tax states. For more information on Origin-based and Destination-based state tax, take a look here.

Step 2: Click the "Edit" button to type in your main address location.

Step 3: Click the "Add Nexus Locations" button to add any locations you have a nexus in.

Step 4: Select all of your nexus locations states and click "Add Locations".

Step 5: To add the tax nexus address click the three vertical dots listed next to the location. 

Step 6: To remove a location click the three vertical dots next to the location and select "Remove". 

How to enable calculated taxes:

In the following section, we'll walk through how to enable calculated taxes on a store.

Step 1: Locate a store you would like to enable calculated taxes on and click "Edit Store".

Step 2: Click the "Taxes & fees" tab.

Step 3: Click the toggle next to "Calculate taxes automatically". When enabled the toggle will turn green.

The option to add a manual tax will disappear when calculated taxes are enabled.

How to add a manual tax:

In the following section, we'll walk through how to enable a manual tax on a store.

Step 1: Locate a store you would like to enable manual taxes on and click "Edit Store".

Step 2: Click the "Taxes & fees" tab.

Step 3: Click on the "Add manual tax" button.

Step 4: If you want to make a new manual tax, click on "Create a new tax". If you've already created a manual tax previously, you can select it in the dropdown menu.

Step 5: Type in a name for the tax (this will appear on the storefront). Type in a percentage for the tax. Click the "Save" button.

Frequently Asked Questions:

Q: Should I use calculated taxes or manual taxes in my store?

A: Calculated taxes are useful when you are selling to customers in different states or different tax jurisdictions. Manual taxes allow you to charge the same percentage tax rate to all customers.

Q: What’s a sales nexus?

A: A sales nexus is where you have a tax liability. Not charging tax can cost you money down the road. Read more here!

Q: How do I know where I have sales tax nexus?

A: Most states/provinces consider you to have sales tax nexus if you have a physical presence there, which can mean a number of things, including having an office, having an employee, having a warehouse, having an affiliate, storing inventory, drop shipping from a 3rd party provider. Learn more here!

Q: Can I default my tax method on every store?

A: Yes! In your Dealer Settings you can default to use a manual amount or to calculate taxes for each of your stores.

Q: Am I supposed to charge a tax rate based on where the customer is located?

A: This depends on whether you are selling in an origin-based or destination-based location. Not sure which category you fall in? Check here!

Q: Can I charge taxes on some products but not others?

A: Yes, when adding products to your store, you can choose a product tax category for an individual item.

Q: My province requires me to charge youth a different tax than adults. Can OrderMyGear support this?

A: Yes. When using calculated taxes, you can select "Youth Clothing" as the product category and the correct tax rate will be charged to the customer at checkout.

Q: Is sales tax charged on fundraising?

A: Yes, we calculate tax based on the subtotal of an order, including all price additions. 

Q: Does calculated shipping charge based on the billing address or shipping address?

A: If there is a shipping address listed on the store, then calculated taxes will charge based on this address. If there is no shipping, then calculated taxes will charge based on the billing address. If you have a pick up option, you can set up a "Default Destination Address" so that the customer will be charged based on the pick-up address.