Configure Your Square Online Store Sales Tax
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 your Online Store. You’ll need to set up taxes specifically for online purchases in Settings > Taxes.
By default, new items added to your store are not exempt from sales tax. You can enable tax exemption on multiple items quickly by batch editing. From your dashboard, go to Items > Item Library and click the checkboxes next to any items you want to exempt from sales tax. Click the “. . .” button on the upper right and select “Remove sales tax”. Make sure you have selected only items that are not subject to sales tax. For example, in some states, items considered necessities are not taxed. If in doubt, consult a tax advisor.
__How Tax is Calculated __
The amount of sales tax charged on a purchase is determined by applying the tax rate to the total price of all taxable items in an order. Optionally, you can include tax in the item price, and you can charge tax on shipping and delivery fees.
Include Tax in Item Prices
When sales tax is included with item prices, tax is treated as something that the store owner will need to pay, rather than the customer. Sales tax is displayed on order receipts but not added to the total price.
To include tax in prices, go to Settings > Taxes. In the Tax Calculations area, check the box for “Taxes are included in item prices”.
Charge Tax on Shipping or Delivery Fees
Rules for charging sales tax on shipping and delivery vary from state to state. If you’re not sure what’s required, you should consult with a professional.
To turn on sales tax for shipping or delivery, go to Settings > Taxes. In the Tax Calculations area, click the checkboxes to turn on taxes for shipping and delivery.
Add Physical Store Locations
If you are located in the US and plan to use the automatic tax calculator, you’ll need to account for all locations where your company has a presence, including any location that you ship from. Again, it’s best to consult with a tax professional if you have questions.
The tax setup page is pre-filled with locations synced from your Square account. If you need to enter a new address, go to Settings > Taxes and click the “Add Store Address” button on the upper right. Save when you’re finished, then follow the same steps to add any other locations.