Squarespace commerce and sales tax 101
Online retailers doing business in multiple states know that keeping track of sales tax laws is a bit of nightmare without some online help. Before choosing any ecommerce platform, take a close look at how it handles sales tax.
If you’re currently using Squarespace and plan to add an ecommerce element, or you’re considering setting up shop, here’s how the platform includes taxes on customer orders.
Step by step
Instead of giving you an overview, we’ll illustrate how the system works with a step-by-step guide for implementing sales tax.
Before you start, figure out in which states you have nexus; you'll have to collect tax from buyers in those states. For example, if you have a warehouse in a certain state, you have to charge sales tax. There are plenty of other rules regarding nexus you need to know. Check out our articles here.
Then get started inputting your sales tax data.
- From the Home menu, click “settings” and then, “taxes.”
- Add a country where your customers are purchasing from you. For the purposes of this examples, I'm going to assume that is the United States.
- Click “add state” and choose a state in which you have nexus.
- Enter the state’s sales tax rate. If the state requires tax on shipping, click on, "Charge Tax on Shipping" below the tax rate. Now any customer from that state is charged that tax rate.
- If you need to enter local taxes, click “add local” next to the state. You can add a single zip code or a range of zip codes to charge a local tax. Create as many zip code rules as you need. As you can imagine, figuring out each locality and whether or not they require the collection of taxes is a monumental task. Unfortunately, Squarespace doesn't have an automated process like some other platforms.
If you want to see these instructions as screenshots, check out Squarespace’s support forum.
As many Squarespace customers have commented, this process will take a long time to complete if you do business in all 50 states and multiple countries. Before you can enter the information, you have to first find it all.
There are other tricky problems; for example, some states, like Georgia, charge sales tax by county, but the Squarespace platform doesn’t have an option for that.
What about sales tax holidays? You will have to manually change the rules for each holiday -- and there are 27 holidays happening at different times throughout the year.
Is Squarespace for you?
Some ecommerce platforms connect with other services that automatically update sales tax information, but Squarespace isn't one of them. If your business is primarily ecommerce across most states, Squarespace might not be the best platform for your business. If your business is mostly local or regional, filling in a few tax laws probably won’t be a problem, but as you grow, you might end up looking for an alternate ecommerce solution.
Squarespace sales tax filing made easy
When it comes to filing sales tax collected through your Squarespace store, look no further than Avalara. Our Returns for Small Business product can help your ecommerce store be sales tax compliant in any state.
Designed for smaller businesses without a dedicated tax team who want a quick way to get started with automation and a better way to file in multiple tax jurisdictions. The turn-key solution lets you easily upload your sales data, add registration details, and file in just a few simple steps.
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