Selling digital products often requires collecting and remitting taxes to the relevant agency. Mavenseed makes it a breeze to handle U.S Sales Tax, European VAT, and Australian GST.
Mavenseed supports tax handling for U.S. Sales Tax, European VAT, and Australian GST across all of our payment gateways. Tax calculation methods depend on which payment gateway is being used. For Stripe, tax collection is handled via Stripe Checkout and Stripe Tax. For Braintree, tax calculations are handled by TaxJar.
The process is very similar for both Orders and Subscriptions, but they do diverge just a bit in terms of looks and feel.
First, decide how you'll collect taxes.
Mavenseed provides both exclusive and inclusive tax collection methods, providing you flexibility in how taxes are collected. Choose between Exclusive or Inclusive taxes via Settings > Taxes.
Exclusive or Inclusive option for tax handling
Choosing the exclusive option will add any taxes to the product price, such that the customer is charged directly for the taxes.
For example, if a product is priced at $25 USD and a 10% tax is collected, then the customer will pay $27.50 USD.
Choosing the inclusive option will include any taxes in the product price, such that the customer is not charged any extra for the taxes.
For example, if a product is priced at $25 USD and a 10% tax is collected, then the customer will still only pay $25.00 USD.
Another way to think about this is who is responsible for the taxes at the time of purchase?
Be sure to think about this decision carefully! While it's not impossible to one day change Tax Collection Methods, it's not easy. This is because Stripe does not allow the tax behavior to be changed on existing products.
If you wanted to change the tax behavior, you would need to recreate all of your products in Stripe and ensure the Stripe Price ID's are all copied over successfully back to each of your individual products (Course, Download, or Live Stream).
The default option is exclusive, so no action is needed on your part if you wish to use this Tax Collection Method.
That completes the setup for your site. Next, we'll setup Stripe, then finally Braintree.