If you’re a US merchant, you’re most likely required to pay sales tax according to state and local laws. Sales tax applies to the sale of most products and some services in a number of states. The rates and rules notably differ from state to state, though. In general, if your business has a physical presence in a state (also known as "nexus"), such as a store, office, or warehouse, you must collect applicable state and local sales tax from your customers. By default, once you have automatic taxes enabled, it will calculate tax rates accordingly. If you have only one nexus, just enable automatic taxes and it's all set. However, if your business is distributed over several states, i.e. you have multi-state sales tax nexus — it’s also possible to set up your taxes so that your customers from the other nexus states will be charged proper sales tax. The TaxJar app from the Ucraft App Market will help you with that.

Setting up multi-state nexus

To enable multi-state nexus in your store:

  • Enable automatic taxes by navigating to Dashboard→eCommerce App→Settings→Taxes. Once the option is enabled, your store will automatically calculate and charge sales tax at checkout.
  • Go to your eCommerce App → Apps → App Market.
  • Find the TaxJar App and install
  • Open the App and navigate to your account. If you don’t have one, you can create it here!
  • Navigate to Account → TaxJar API
  • Enable the "Use Personalized Sales Tax Calculations in your Ecwid Store" option so that Ecwid can use your TaxJar nexus address settings in tax rate calculations.
  • The last step here will be finding the Nexus Address Configuration section and add your store nexuses

Reporting and filing sales tax returns

If you sell taxable products, you must report taxes and file tax returns with a state and locality, in which you’re collecting sales tax. The frequency of tax reports and returns depends on the volume of your sales. In most states, you must prepare tax returns monthly if you have a high volume of sales, but at least quarterly in almost every state.

The TaxJar app from the Ucraft App Market allows you to automate tax reporting. TaxJar will automatically report and file your sales tax returns to the state for you.

To report and files sales tax returns automatically:

  • Enable automatic taxes by navigating to Dashboard→eCommerce App→Settings→Taxes. Once the option is enabled, your store will automatically calculate and charge sales tax at checkout.
  • Install the TaxJar application from the Ucraft App Market.
  • Once installed, the app will automatically start synchronizing your sales and will guide you through any additional steps.
  • While it synchronizes your sales, open your TaxJar account settings, and fill in your business profile to let TaxJar automate everything for you.
  • When TaxJar finishes exporting your sales, follow the instructions they provide to generate tax reports, and enable automatic filing and reminders.

Handling non-taxable items in your store

If some products in your catalog should be tax-free, automatic taxes won't work for you as they apply to all products and you can't mark products as tax-free. In this case, you should set up taxes manually so you could waive taxes on certain items.

Once the manual taxes are set up, disable taxes for products that should be tax-free:

To disable taxes for products that should be tax-free in your store:

  • From your eCommerce App, go to Catalog → Products and open a product that taxes shouldn't apply to.
  • Open the Tax and shipping tab.
  • Disable taxes for this product.
  • Save the changes

Once saved, the taxes that you set up in your store in Settings → Taxes won't apply to this product. Repeat the steps for other products that should be tax-free.

If you have any questions or concerns, contact us directly via the Live Chatbox, located in the lower right corner. Our Support Team will provide you with top-notch quality support, 24/7.

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