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How Do I Set Up Sales Tax in WooCommerce?

Last updated on January 22, 2023 @ 11:54 am

If you’re selling products in the United States, you’ll need to collect sales tax from your customers. Sales tax is a government-imposed tax on the purchase of goods and services.

The amount of tax you charge depends on the state in which your business is located and the type of product or service you’re selling. In most states, you’ll need to collect sales tax from your customers and remit it to the state government.

WooCommerce makes it easy to collect and remit sales tax. You can set up sales tax in WooCommerce by following these steps:

PRO TIP: When setting up sales tax in WooCommerce, it is important to be aware of the potential for errors. Incorrectly configured sales tax can lead to over- or under-charging customers, which can result in lost revenue and dissatisfied customers. WooCommerce provides a number of settings to help you configure sales tax correctly, but it is still important to double-check your work before going live.
  1. Log into your WooCommerce account.
  2. Click on Settings and then Taxes from the left-hand sidebar.
  3. Click on the Standard tab.
  4. Enable the “Enable taxes and tax calculations” checkbox.
  5. If you want to charge taxes on shipping and handling fees.
  6. Enable the “Charge taxes on shipping fees” checkbox.
  7. (If you do not want to charge taxes on shipping and handling fees:)
  8. Disable the “Charge taxes on shipping fees” checkbox.

Now that you have enabled taxes in WooCommerce, you can begin setting up your tax rates. To do this, follow these steps:

  1. Click on the “Rates”
  2. Click on the “Tax Rates” tab. Select the state or country for which you want to set a tax rate.
  3. Enter the tax rate for that state or country.
  4. Repeat this process for each state or country where you want to collect sales tax.

It’s important to note that sales tax laws can change frequently, so it’s important to stay up to date on the latest rules and regulations. Make sure to consult with a tax professional or the state government if you have any questions about sales tax.

Additionally, if you sell products in multiple states, you’ll need to register for a sales tax permit in each state where you have customers. This is known as “remote seller” tax and it’s important to stay compliant with these laws as well.

By following these steps, you can easily set up sales tax in WooCommerce and ensure that you are collecting and remitting the correct amount of tax to the appropriate state government. It is important to stay compliant with tax laws, and it is always best to consult with a tax professional if you have any questions about your business’s sales tax obligations.

Dale Leydon

Dale Leydon

Sysadmin turned Javascript developer. Owner of 20+ apps graveyard, and a couple of successful ones.