How Do I Tax Shipping WooCommerce?

As an online business owner, you are responsible for collecting taxes on all sales made through your website. Depending on the products you sell and the state in which your customers reside, the tax rate you charge will vary. One of the most important things to keep in mind when collecting taxes is that you must have a clear understanding of how to tax shipping on WooCommerce.

Shipping is one of the most common questions we get from new online business owners. They are unsure of how to handle shipping when it comes to calculating taxes.

The answer is actually quite simple. When you calculate shipping charges, you should include any taxes that apply to the shipping service itself. For example, if you ship via UPS and are required to pay a fuel surcharge, that amount should be included as part of your shipping charges and taxed accordingly.

In addition to taxing the shipping service itself, you will also need to collect taxes on the value of the items being shipped. The tax rate you charge will depend on the state in which your customer resides.

For example, if you ship an item to a customer in California, you will need to charge them California sales tax. It is important to note that you should only charge tax on the value of the items being shipped, and not on the shipping charges themselves.

Now that you know how to tax shipping on WooCommerce, it’s time to put it into practice. If you’re using a plugin like WooCommerce TaxJar, simply enable the “Taxes Based On” setting and select “Shipping Address.” This will ensure that all taxes are calculated correctly based on your customer’s location.

If you’re not using a plugin, you can still calculate taxes manually. Simply use the following formula:

For example, if you’re shipping an item via UPS Ground to a customer in California, your total tax would be calculated as follows:

5 + 10 * 0.075 = 0.825

In this case, your customer would be responsible for paying $0.825 in taxes on their purchase.