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.
Based on state sales tax laws, Big Cartel automatically calculates and collects any applicable sales tax on all U.S.-bound orders. Then we send the tax collected to the appropriate taxing authority.
We’ve integrated with TaxJar to automatically calculate and remit sales tax on purchases made in your shop. To make sure we’re collecting sales tax correctly, we need to know your shop’s physical location — this is where your business is based. We use that location, along with your customer’s shipping address, the cost of all products and shipping in the order, and the products’ tax codes to automatically calculate how much to collect and remit to each state. It’s a complicated calculation, but TaxJar helps make sure all the variables are taken into account.
When an order is placed in your shop, you can see how much sales tax was collected and remitted in the order’s details, and you can use that info if you need to report sales tax collected to your state. All of this info is also listed in the CSV file you can download from the Unshipped and Shipped sections of your Orders page.
Note: Big Cartel only collects and remits sales taxes on online orders, not in-person payments. If you sell products in person using the checkout area of our iOS or Android app, you will be responsible for collecting and remitting appropriate sales taxes.
Depending on your state, you may still need to report the sales tax that’s been remitted on your Big Cartel sales. In most cases you won’t have to remit any additional sales tax collected on your sales made through Big Cartel, since that’s already been taken care of. But there are some areas that have home rule laws in place (e.g., Colorado’s home-rule tax or Illinois’ ROT), and that puts the responsibility of local sales tax on the seller. If you’re unsure what your responsibilities may be, we encourage you to consult an accountant or other tax specialists.
🤔 Did you know: Montana, Oregon, New Hampshire, Delaware, and Alaska, don’t assess sales tax on any purchases.
Lots of Big Cartel shops operate out of garages and second bedrooms — it’s ok to put your home address as your shop location. The address in this area is never visible to customers visiting your shop online. We only collect your address so that we can accurately calculate tax on orders placed in your shop.
By default, all products are assigned a general retail tax code which should work for most products. But if you have individual products with different tax requirements (like clothing, services, or digital goods), you can assign tax codes on a product-by-product basis. Changing the tax code for a product may change how much tax is collected for that particular product in some locations — tax laws vary from state-to-state. Before making changes to your tax codes, you may want to reach out to a local tax pro to help you make the right choices 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, and you can leave the tax code setting alone. If you’re unsure, your best bet is to reach out for guidance from a tax professional.
We’ll indicate how much tax was collected and remitted on a given order in the Orders page of your admin. The information is also included in your Orders’ CSV files which can be viewed in any spreadsheet program.
Note: 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 on March 9th 2020 won’t have had the sales tax collected/remitted by Big Cartel. Since we didn’t collect or remit sales tax on any orders placed before that date you’re responsible for sales tax on those orders.