Note: At this time, Commerce is only available within the US. The information below is regarding US sales tax.
Just like all other ecommerce sales, you might have to collect sales tax on transactions made through Postscript's Commerce feature.
When you're adding products to your Commerce Bundle, there is a field for you to enter a Tax Category. We integrate with TaxJar to automatically calculate the correct tax rate on your products in over 14,000 taxing jurisdictions.
The Tax Category field is optional: If you leave it blank, Postscript will not charge a sales tax on your Commerce transactions.
So how do you determine if you need to fill out the Tax Category field and which is the correct category for your products?
Step 1: Determine if you're collecting tax or not
Most ecommerce brands do collect sales tax, but there are some exceptions.
Yes, we collect sales tax: You need to fill out the Tax Category field (even for products that may be exempt from sales tax in some jurisdictions). Move on to step 2.
No, we don't collect sales tax: You can leave the Tax Category field blank. Postscript will not charge a sales tax on your transactions.
I'm not sure if we collect sales tax: Consult the company owner or accounting department to confirm if you collect sales tax or not.
Step 2: Select the correct tax category for your product
Postscript uses the tax category for each product in your Commerce Bundles and the address of the buyer to calculate and charge sales tax.
The tax categories and corresponding tax rates are pulled from TaxJar. Postscript does not control these categories and we cannot update or modify them.
If you sell a product that is exempt from sales tax in certain jurisdictions, this is included in the calculation. For example, candy is taxable in most states but not in California. If you sell candy to a buyer in California, Postscript will not charge them sales tax.
You can narrow down the list of tax categories by typing "clothing", "food", or another relevant keyword.
Here are 3 ways to determine the correct tax category for your product:
- Choose the same category that you chose for your product in Shopify. If you don't remember what you used, you can find out by visiting the Settings > Taxes section in your Shopify account. Here's what you should see: [embed screenshot]
- Consult the list of all tax categories in TaxJar. This webpage gives you a description of each category that is helpful in understanding what type of products qualify. You can search by relevant keywords.
- Ask your accountant or tax professional. They should be able to advise you on the correct tax category.
Please note: It is your responsibility to verify that you are using the correct tax category, and to correctly file and remit taxes collected through Postscript Commerce. The Postscript team is not your tax advisor and cannot advise you on which tax category is correct for your product.
What if I have Sales Tax Nexus?
Tax Nexus - we don't account for this and it's important. at this time, Postscript does not support sales tax Nexus. If you need this, request it.