Creating custom sales tax rates and sales tax holidays
Custom tax rates for products
Certain US states have lower sales tax rates or do not charge sales tax for certain products. When selling products with different sales tax rates, you can create product tax overrides. You should only create product tax overrides where ShopWired sales tax calculations, performed by TaxJar, are working incorrectly.
Overrides can be created either for a single product or category of products.
ShopWired cannot tell you:
- Which products are sales tax exempt, or
- If you should create an override for a product
You should always consult a sales tax professional before creating product tax overrides.
To create a product tax override:
- Navigate to Settings > Taxes
- Locate the Product tax overrides section
- Select
add new product tax override - Select the State to which the override should be applied
- Only a single state can be selected
- Enter a Name for the override
- The name is used for internal purposes and not displayed to your visitors
- Configure the Tax rate (up to 3 decimal places)
- Select the Target types for the override and the targets
- More than one category/product can be selected as a target by using the
+ add anotheroption
- More than one category/product can be selected as a target by using the
Where more than one override is created for the same state and product, the override created first will take precedence and be applied.
Custom tax rates for shipping
Custom tax rates for shipping
Custom tax rates can be configured for shipping prices using the shipping tax overrides feature.
To create a shipping tax override:
- Navigate to Settings > Taxes
- Locate the Shipping tax overrides section
- Select
add new shipping tax override - Select the State to which the override should be applied
- Only a single state can be selected
- Enter a Name for the override
- The name is used for internal purposes and not displayed to your visitors
- Configure the Tax rate (up to 3 decimal places)
Sales tax holidays
Sales tax holidays
Many states offer certain periods in the year where sales tax is not charged on products that it normally would be charged on.
If you offer products that are exempt from tax during the dates set by the state, you don’t need to (and shouldn’t) charge sales tax to your customers by using the sales tax holiday feature.
To create a sales tax holiday:
- Navigate to Settings > Taxes
- Locate the Sales tax holidays section
- Select
add new sales tax holiday - Select the State for which the holiday should be applied
- Only a single state can be selected
- Select an Applies from date and Applies to date for the holiday
- The tax holiday will be applied at 00:00:00 on the selected date
- The tax holiday will stop being applied at 23:59:59 on the selected date
- Select the Target types for the override and the targets
- More than one category/product can be selected as a target by using the
+ add anotheroption
- More than one category/product can be selected as a target by using the
Important information about sales tax holidays
It is your responsibility to make sure that you are utilising sales tax holidays appropriately. Improper use (such as placing sales tax holidays on products which aren’t exempt) could lead to you not collecting sales tax that you should be, which can lead to financial consequences for your business.
ShopWired cannot assist with the specifics of what sales tax holidays are taking place in different states and how that would affect your business. If you are unsure if your business or your products are eligible for a sales tax holiday, then you should consult a tax professional.
