Heads up! This article details the tax setup for shops based in the U.S. (or shops with USD set for their currency) For shops outside the U.S., you can find more on your tax setup here.
One of life’s few constants is taxes, and we’ve got you covered! 🙌 Based on new state sales tax laws, Big Cartel will automatically calculate and collect sales tax on all U.S. bound orders– this only applies to online orders, not in-person payments. Then we’ll send the tax owed to the state for sales made into all 45 states that have a sales tax (excluding Montana, Oregon, New Hampshire, Delaware and Alaska which do not).
We’ve integrated with TaxJar to create a sales tax tool that will automatically calculate and remit sales tax on purchases made in your shop, and to make sure we’re collecting sales tax correctly we need your shop location– this is where your business is based. We use that location, along with your customer’s shipping address, and tax code to automatically calculate how much to collect and remit to your state.
Then, as orders come in you’ll be able to see how much sales tax was collected and remitted in the order detail, and you can use that info when reporting sales and/or tax collected on your behalf to your state.
In some cases, depending on your state, you’ll still need to report sales and the tax paid on those sales. But you won’t have to remit any sales tax collected on your sales made through Big Cartel where we’ve already done that for you. If you’re unsure what your responsibilities may be, we encourage you to consult an accountant or other tax specialists.
Where you create and ship your products from will determine the amount of tax that is collected and remitted, but that doesn’t mean you have to have a warehouse, office space, or brick and mortar store. Just let us know where you’re based, and that’s okay if you run your business out of your garage!
Maybe you have individual products that have different tax requirements - maybe it’s a service that’s tax exempt for example? No worries! You can assign a tax code on a product by product basis. Keep in mind that changing the tax code for a product may change how much tax is collected for that particular product. Before making changes on the product level, your best bet would be to reach out to a tax pro, and they can guide you so you’re making the right changes for your products.
Heads up! You can find the list of TaxJar tax codes here. If your product type is not on the list then it’s likely there are no exemptions or different tax rates that apply. If you’re unsure, your best bet is to reach out for guidance from a tax pro.
We’ll indicate how much tax was collected and remitted on a given order in the Orders section of the admin. So if you need that info for reporting purposes you’ll definitely have it.
Keep in mind that not all orders will have sales tax collected. There are a couple of exceptions you’ll want to keep in mind when reporting your taxes:
Any orders placed in your shop before the tax update will not be taxed on your behalf by Big Cartel.