Posted May 24, 2016 by Matt Kuritsyn, Ecwid Team

New Automatic Tax Calculations in Ecwid

We’re thrilled to announce a partnership with TaxJar that brings a fully automated tax solution to Ecwid merchants. Automatic tax rate calculation is already available for Ecwid merchants in the U.S., Canada, EU and Australia. More tax tools including automated tax filing and multi-state sales tax will follow this summer.

Taxes are complicated. We made them easier

Every seller knows that taxes are difficult. Even when it comes to a simple question “What rate should I charge”, the answer is not easy. The tax rate might depend on the location of your store, customer location, type of product you sell, discounts you provide at checkout and even how you ship the product. Taxes are especially crazy in the U.S. — some state have county or even city level tax regulations, which can make a rate differ significantly across the state.

In the past, you would have to set up geographic zones by zip code and create tax rates table to determine when, and how much, sales tax to collect at checkout. You would also be required to keep up with new laws and regulations in every area you sell in order to stay compliant as the tax rules change.

Now we have solved it.

Tax rate calculation is easy for Ecwid sellers now

Today, we are proud to say that we fully automated the tax rates calculation in Ecwid. Merchants from the U.S., Canada, EU and Australia can set up tax rates in their store in one click, literally.

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Once enabled, the automatic tax rate will determine a precise tax rate at checkout depending on where you and your customer are located. The tool knows the tax rules in your country, state and even county and city and applies them properly to each order:

  • Whether you’re located in a region with origin-based or destination-based tax schema
  • Whether shipping cost or discounts are taxable
  • Whether you should charge tax in another state or country not

The tax rate is calculated with a zip code accuracy. If your customer provide zip+4, it will be calculated with even higher precision. In some states (and the number of such states is growing), the tax is calculated with a street address level precision!

Ecwid is up to date with the tax laws. So is your store

Tax laws are constantly changing. Your country, state or even city government may apply new tax rates that you’re expected to keep up with. Ecwid will stay up to date on the tax law so you can get back to running your business.

And you know what? No setup required! Everything is automatic.

More tax automation tools are coming

We continue working with TaxJar on extending the automated tax solution we are providing. This means more and more complicated tax routine will be automated in your store saving hours of works for you and your staff.

This summer, Ecwid and TaxJar plan to provide the following tools:

  • Multiple nexuses for US sellers. This will allow to get proper rates if your store has a nexus (operates) in several states.
  • Automated reporting & filing to fully automate sales tax management, and more.

Q/A

Is there an extra fee to get automated tax calculations?

No, it is on us. As long as you’re on one of Ecwid’s premium plans (Venture and above) you have unlimited automatic tax calculations free of charge.

How does the automated tax calculation work?

The automated tax rates calculation tool uses a super robust service SmartCalcs from TaxJar. Every time Ecwid needs to look up a tax rate for the customer location, it “speaks” with TaxJar APIs in background and gets the rate in less than a second. The rate is applied to your customer cart automatically so you will get the proper tax amount charged with every order.

How to set up automatic tax rates in my online store?

The new automatic tax rates tool is available for you if you are in the U.S., Canada, EU or Australia and you’re on one of Ecwid premium plans. So, if you are on a Free plan, it’s a good time to upgrade.

The setup itself is easier than ever:

  • Open the Taxes page in your store Control Panel
  • Enable the “Automatic” option.

And you’re done — your store is now calculating and charging the precise tax rates.

What about the old manual tax rates table setup?

They are still available. If you need a custom tax setup, you can find it under the Manual section on the tax settings page in your Control Panel.

Will it reset my manual tax rates in Ecwid if I turn on the new Automatic option?

No, please don’t worry. All your current rates are safe. Once enabled, the automatic option will inactivate the manual tax rates if you have set up any. But they will be kept intact. So please feel free to give the automatic option a try — you will be able to quickly switch back to the manually set rates table if you want.

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Have questions or comments about TaxJar and Ecwid? Start the conversation in the comments!