Let’s face it, there’s not really a fun way to talk about taxes - but hey, we’ve gotta. 💰 Here are a few details on how the tax setting in the admin functions:
Taxes are only charged on orders that are placed to your taxed location. For example, if you set up your taxes for Texas at 8.25%, only your Texan customers will be charged tax. Make sense?
European stores will be able to choose a home country, or set a rate for the entire European Union.
All other countries can set taxes for their store’s home country by default.
Not sure how much to charge? We’d recommend consulting with a tax professional. Since the laws vary and many are changing quickly, a trusted accountant can help you navigate requirements based on where you’re located and ensure you’re following the law.
About that Supreme Court Decision
U.S. folks: you may have heard that a June 2018 Supreme Court case overruled the Quill decision. Quill prevented states from requiring businesses with no “physical presence” there, like out-of-state online retailers, to collect sales taxes.
The Supreme Court did acknowledge the difference between big online retailers (think Amazon or Overstock) and the smaller businesses (like sellers using Big Cartel). Because of those significant differences in businesses and the complexities of state and local tax laws, we think that we’ll see much more litigation around enforcement in the coming weeks/months/years. It’s possible that this all ends up with Congress enacting a federal sales tax or small business exemption - we really don’t know.
For now, our built-in tax tool still only allows you to collect taxes in one location, but we’re working on rolling out an update to our tax feature for shops based in the U.S..
We suggest that everyone talk with a tax professional to determine what changes, if any, you need to make to the sales tax collection process.