Setting up manual tax rates in Squarespace
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Managing taxes might not be the most exciting part of running your online store,
but it’s definitely one of the most important.
Getting your tax rates set up correctly not only keeps you compliant with local regulations but also shows your customers that your business is professional and trustworthy.
With years of experience in website design and helping e-commerce businesses thrive on Squarespace, we’ve seen firsthand how important it is to get the details right.
That’s why we created this easy-to-follow guide to help you set up manual tax rates without the stress.
By the end, you’ll have everything configured properly, giving your customers a smooth checkout experience and boosting your credibility as a reliable online retailer.
Let’s get started!
Quick Fix
How to Set Up Manual Tax Rates in Squarespace:
- Log into your Squarespace account and go to Commerce > Taxes
- Click the + icon to add a new tax rate and select Manual Setup
- Choose the country and enter the tax name and rate.
- Add state or province tax rates and local ZIP code rates as needed.
- Save your changes and test the setup by adding products to your cart and proceeding to checkout.
Steps to Set Up Manual Tax Rates in Squarespace
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Step 1: Log into Your Squarespace Account
Go to squarespace.com and sign in to your account.
Select the website for which you want to set up manual tax rates.
Step 2: Navigate to the Taxes Panel
In the left sidebar, click on Setting Icon.
Select Selling Tab, And Then Select Taxes
Step 3: Add a New Tax Rate
In the Taxes panel, click the Add Rate To Open the Settings
Step 4: Select the Country
Choose a country from the dropdown list where you’ll be collecting sales tax.
For international sales, repeat this process for each country.
Step 5: Configure Tax Rate Details
Tax Name: Enter a clear name (e.g., "Sales Tax" or "VAT").
Tax Rate: Specify the percentage rate (e.g., enter "7" for a 7% tax).
Charge Taxes on Shipping: Toggle this on if taxes apply to shipping costs.
Charge Taxes on Services and Digital Products: Enable if applicable.
Step 6: Set State or Province Tax Rates (for the U.S. and Canada)
For the U.S., click Select State, and choose the applicable state.
For Canada, click Select Province, and choose the relevant province.
Enter the sales tax rate specific to that region.
Step 7: Add Local Tax Rates (if applicable)
Click Add ZIP Code Rate for location-based taxes:
Single ZIP Code: Enter the ZIP code and corresponding rate.
ZIP Code Range: Specify a range of ZIP codes and their tax rate.
Combine local and state/province rates if necessary.
Tip: State and local taxes combine automatically. For example, if New York State tax is 10% and New York City tax is 8%, customers in New York City will pay an 18% total tax rate.
Step 8: Save Your Tax Rate
After entering all necessary details, click Save.
Repeat these steps for additional tax rates.
Testing Your Tax Setup
Add Products to Cart: Visit your store and add items to the cart.
Proceed to Checkout: Verify that the tax rates are correctly applied based on the shipping address.
Test Multiple Scenarios: Enter various addresses to ensure accurate rates are charged for all locations.
Limitations to Keep in Mind
No Product-Specific Tax Rates:
You cannot assign unique tax rates to individual products.
Limited Regional Options:
Cities and regions outside the U.S. and Canada cannot have separate tax rates.
Customer Exemptions:
It is not possible to exempt specific customers from paying taxes.
Important Notes on Taxes
Physical Products:
Taxes are calculated based on the customer’s shipping address.
Digital/Service Products:
Taxes are determined by the customer’s billing address unless purchased with a physical product.
Membership Sites:
Taxes are based on the billing postal code tied to the payment method.
Discounts are applied before tax calculation.
Understanding U.S. Sales Tax Nexus
The 2018 South Dakota v. Wayfair, Inc. decision requires online sellers to collect taxes based on economic activity, not just physical presence.
This ruling varies by state, and you may need to comply with state-specific laws.
Recommendation: Consult a tax professional to evaluate your obligations and ensure compliance.
If you sell products or services online, it’s important to consult a tax advisor to assess your sales tax collection responsibilities under the latest laws. For more details about sales tax regulations in each state, the Internal Revenue Service offers a helpful list of state-specific websites.
Best Practices for Managing Taxes in Squarespace
Stay Updated:
Regularly review tax laws in your selling regions to maintain compliance.
Analyze Sales Data:
Use Squarespace analytics to track the impact of taxes on your pricing and sales.
Seek Professional Guidance:
If unsure, consult a tax advisor for expert assistance.
Conclusion
Setting up manual tax rates in Squarespace is simple yet vital for ensuring your online store operates smoothly and remains compliant with tax laws.
By following this guide, you’ll provide a seamless checkout experience for customers while meeting your legal obligations.
You Can Learn More About This Topic From Official Squarespace Article,
