Square Online Tax Settings
DISCLAIMER: Tax compliance is your responsibility. We do not guarantee the applicability or accuracy of our tax tools. If you have any questions about your tax obligations, you should consult a professional tax advisor.
Note: Tax settings from your Square account do not sync to Square Online. You’ll need to set up taxes specifically for online purchases in Settings > Taxes.
Taxes for online sales can be tricky since you may receive orders from many locations.
The tax settings for your online store make it easy to set up and manage sales tax. And if you’re located in the United States, we provide an automatic tax calculator to make it even easier.
The automatic tax calculator will charge U.S. sales tax based on all store addresses you’ve entered and where you ship an order to. For example, let’s say your physical store is in California, but you ship orders from a location in Arizona. The automatic tax calculator will add rates for both Arizona and California. If you sell and ship from the same location, then you’ll only charge tax for orders going to that state. The most important thing to remember about U.S. taxes is that you only need to collect them if you have a presence in the state that you are shipping an order to. If you don’t, you don’t collect taxes.
How the Automatic Tax Calculator Works
When you receive an order, the automatic tax calculator first checks to see if your store has a presence in the state you’ll be shipping to. This is determined based on the store addresses you’ve added:
Store address: configured on the Shared Settings > General page
Shipping address: configured on the Fulfilment > Shipping page
Tax locations: configured on the Shared Settings > Sales Taxes page
The calculator checks each location and if you don’t have a presence in the province you’re shipping to, no taxes are charged.
Note: When a customer has different billing and shipping addresses, only the shipping address matters in terms of charging tax. For orders that will be picked up in-store or delivered to the customer, local sales tax will be added accordingly.
You can use the item-level tax rates in your online Square Dashboard for pickup, delivery and self-serve orders. Shipping orders use the tax rates set in the Square Online Overview page settings. To turn on item-level taxes:
Open the Square Online Overview page.
Select Shared Settings > Sales Taxes.
Under Order-level taxes, toggle on item-level taxes for pickup, delivery, self-serve or all three.
Click the Go To Item Taxes button to view item-level taxes in the online Square Dashboard.
Customers who received an item-level tax rate on an order can view a calculation of their taxes during checkout, displayed by tax name. If a customer selects pickup or delivery for an item that does not have an item-level tax rate, no tax will be applied to the purchase. Tax exempt items in Square only apply to Square Online pickup, delivery or self-serve orders. Shipped orders will use the tax rates set in the Square Online Overview pagesettings
Sales Tax for Canada
If you’re located in and ship to Canada, the Canadian country tax rate is pre-filled along with any additional, compound or replacement tax charged by the destination province or territory. For example, if an order is shipping to British Columbia, an extra 7% is added to the country’s 5% tax rate. You can edit and override any of the pre-set Canadian tax rates, but they cannot be deleted.
Sales Tax for Other Countries
For locations outside the United States and Canada, you’ll need to add the tax rates manually.
Square Online now supports charging price inclusive taxes in the United Kingdom, United States and Canada. When taxes are set to be inclusive, the price of each item sold on your site will already include the tax.
Above is an example of what your customers will see when they purchase from a site with price inclusive taxes enabled. In this case, the customer is purchasing an item for $1 from a seller with an 8% price inclusive value-added tax (VAT) enabled.
Subtotal: This line item represents the sum price of all items in the order, and it includes any price inclusive taxes
Tax: This line item breaks out the taxes from the subtotal so that the customer can see the exact tax amount paid
Total: This line item is the total cost of the order, including the subtotal and any additional fees (such as shipping) that are applied.
Note: the separate “Tax” line item is not summed as taxes are already included in the subtotal.