U.S. Sales Tax
Sales Tax is an increasingly complicated subject that makes most business owners sweat. We're trying to make it easier for you in Mavenseed!
Mavenseed integrates with TaxJar for collecting, reporting, and remitting sales tax for U.S. businesses. The decision and requirements for you to collect sales tax on your digital products depends on wether or not you have physical or economic nexus within a given state.
Not sure if you need to collect sales tax? Is nexus gibberish to you? Start by reading TaxJar's helpful guide here: https://blog.taxjar.com/sales-tax-on-digital-goods/
Setup
First, sign up for a TaxJar account. Once that is completed all you need is your Live Token for the SmartCalcs API.
You may find your Live Token via TaxJar > Account > SmartCalcs API.
Once you have located the Live Token copy and paste it into your Mavenseed TaxJar API Key, which you can find under Settings > Taxes > TaxJar API Key
When Sales Tax is Collected
Sales Tax will be collected on your customers orders and subscription payments if the below criteria is meant:
TaxJar is configured (steps shown above)
You have designated at least one state with nexus in TaxJar
The customer is located within a state with nexus while purchasing
If those three criteria are meant then sales tax will be collected and reported to your TaxJar account such that you may then handle remittance to the applicable states by whichever method you deem best.
FAQ
Do I have to collect sales tax?
If you're a U.S. based business that is selling digital products to U.S. customers then chances are you may need to begin collecting sales tax on those sales. Due to the South Dakota vs. Wayfair decision the precedent has been set for states to begin enforcing sales tax collection and remittance on the purchase of digital goods, even if you, the business are registered outside of that state.
For example, your business may be based in Kansas but if you have an employee in South Dakota and are selling to customers in South Dakota then you need to be remitting sales tax for those transactions. Or if you have 200 customers in South Dakota then you also are required to collect sales taxes. Gulp!
Thankfully this process is becoming easier and easier through the combination of Mavenseed and TaxJar.
TaxJar has a handy Transaction Checker that enables you to monitor your sales history to determine nexus requirements: https://www.taxjar.com/sales-and-transactions-checker/
How do enable sales tax on my products?
Simply connect your TaxJar account and configure nexus in Taxjar then we'll handle the calculations and collection of sales tax for your customers. We detect the customers location and then communicate with TaxJar to calculate applicable taxes, adding them onto the customers total at checkout.
Can I view a report of sales tax collected in Mavenseed?
You may view a report of all taxes collected, including a breakdown by type, via Reports > Taxes.
Do customers see sales tax on their receipt?
Yes! All calculated sales taxes will be shown as a line item on their receipt, clearly indicating exactly what tax they paid and how much. Tax information will also be shown on the download invoice provided to the customer.
Can Mavenseed remit my sales taxes for me?
No, we are not able to remit sales taxes (or any other taxes) for you or business. What we can do, however, is make this process easy for you by enabling to connect your TaxJar account, automatically logging every transaction in TaxJar for easy reporting and remittance.
How do taxes on recurring payments work?
When your customer starts their subscription, we collect their billing address and store it into their profile. The customer can edit this information at any time by visiting their Account.
We send the Country, the State, and the Zipcode to TaxJar and they provide the calculations for how much to collect. This amount is added onto the invoice prior to the automatic payment.
Have another question that isn't answered here? Ask us via email!
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