Setting Up Automatic Tax Calculation

9 min read

Important:

This tax solution is currently available for Wix Stores, Wix Bookings, and Wix Restaurants Orders (New). Using a different app? Click an option below:

Simplify tax collection by letting Avalara do the hard work for you. Wix works with a third-party software, Avalara, to provide automated tax.

Important:

Avalara is not able to calculate tax in Brazil, India, and a few other locations (see list in the FAQ below).
You are solely liable at all times for confirming that your tax calculation conforms to all applicable laws and regulations. We recommend getting advice from a professional to help you meet tax obligations.

Step 1 | Connect to Avalara

Get started by connecting your site to Avalara. Note that you cannot connect the same Avalara account to multiple sites.

Before you begin:

If you previously set up tax in a merchant account (e.g. PayPal), remove the setting.
Avalara is available for use in sites that have upgraded to a Premium plan or Studio plan that supports automated sales tax.

Go to Tax in your site's dashboard.
Click Automate Your Tax at the top right.
Select the Avalara Service Terms & Conditions checkbox and click Continue.
Enter your details to set up your Avalara account.
Notes: Enter the exact address of your main business location.
Click Create Account (this might take a minute).

Step 2 | Add tax locations

Now that you're connected, you need to add the location or locations where you're required to connect tax. Learn more about determining where you need to collect tax.

To add tax locations:

Go to Tax in your site's dashboard.
Click +Add Location.
Select a country from the Country drop-down.
(Optional) Click the Set up tax for every region individually toggle.
Notes:
- Leave the toggle disabled to collect the same tax rates for the entire country.
- The toggle doesn't appear for the US, Canada, and countries without separate regions.
If relevant, select one or more states/provinces etc. from the drop-down.
Click Add.
(Optional) Repeat steps 2-6 to add additional tax locations.

Step 3 | Set how tax is displayed in your shop

Decide whether to display items in your shop with the tax included or add tax at checkout. Learn more about setting whether tax is included in the product price.

To set how tax displays in your shop:

Go to Tax in your site's dashboard.
Select an option:
- Tax should be added at checkout: For example, if the tax rate is 10% and a customer buys a $100 product, they are charged $110 at checkout.
- Tax is already included in my prices: For example, if the tax rate is 10% and a customer buys a $100 product, they are charged $100 at checkout.

Step 4 | (Optional) Create and manage tax groups

Create a custom tax group for any items that aren't taxed at the default rate. For example, if children's car seats are tax-exempt in one of your tax locations, you can create a car seat tax group and add all your relevant products to the group.

After setup, Avalara will make sure you collect the correct tax rate for this group of items in all your tax locations.

Learn how to create tax groups.

Step 5 | Add backup rates

On rare occasions, it's not possible to connect to Avalara during checkout. To avoid taxing sales at 0%, you can enter backup rates. These rates are only applied in cases where Avalara temporarily cannot provide a rate.

To add backup rates:

Go to Tax in your site's dashboard.
Select a location.
Enter a rate for any of the following tax groups:
- Products: This should be the default tax rate for this location.
- Services: This option appears only if you use Wix Bookings.
- Menu items: This option appears only if you use Wix Restaurants Orders (New).
- Restaurant service fees: This option appears only if you use Wix Restaurants Orders (New).
- Shipping and delivery: Enter a backup rate if store or restaurant shipping is taxed in this location.
- Gift cards: This appears only if you use Wix gift cards. Enter a rate if gift cards are taxed in this location.
- Custom groups: If you created custom groups of products, they'll appear here. You can enter a backup rate for each group you created.
If you have more than 1 location, repeat steps 2 and 3 for each one.

Step 6 | Complete setup in Avalara

There are a number of reasons why you may need to take a few more steps in Avalara to get your business set up. For example, in the US, there are a number of home rule states for which Avalara requires extra information. Check each of the options below to see if any of them are relevant for your business.

To complete setup:

To connect to Avalara, select an option:
- If you've logged into Avalara before:
  1. Click here and log in to your account.
- If this is your first login:
  1. Click this link to set your Avalara password.
  2. Enter the email you used to sign up with Avalara.
  3. Click Request reset.
  4. Click the link in the email you receive.
  5. Create a new password.
  6. Click Save.
Choose what you want to do:

Complete setup for home rule states

Complete setup for Canada

Update your distance selling threshold (EU only)

(Optional) Set up tax collection for handling fees (any location)

(Optional) Override Avalara's tax on shipping settings

Avalara automatically calculates whether you need to collect tax on shipping (freight).

To override the Avalara settings and stop collecting tax on shipping or to collect at a different rate, you can create custom rules in the Avalara dashboard.

To set tax on shipping to zero

Click Settings at the top.
Select All settings.
Click Manage next to Custom rules.
Click +Add a tax rule.
Enter a name for your custom rule (e.g. France Shipping).
Select a date when this rule starts to be applied.
(Optional) Select an expiration date for the rule.
Select Taxability rule from the Rule Type drop-down.
Select the country where the rule will be applied.
(Optional) Select a region in the country.
(Optional) Select a jurisdiction.
Under Tax Type, select Input and Output tax.
Under Rate Type, select Zero.
Under Tax Code, enter FR.
Under Entity Use Code, select None.
Make sure that Non-taxable is selected in section 2 on the right.
Click Save tax rule.

To set a custom tax rate for shipping:

To set a custom shipping tax rate, you need to create two shipping tax rules for each country you collect tax from.

Step 1 | Create a rate override rule:

Enter a name for your custom rule (e.g. France Shipping).
Select the date this rule starts to be applied.
(Optional) Select an expiration date for the rule.
Select Rate override from the Rule Type drop-down.
Select the country where the rule will be applied.
(Optional) Select a region in the country.
(Optional) Select a jurisdiction.
Select Input and Output tax under Tax Type.
Note: US merchants should select Sales or Sellers Use Tax.
Select Standard from the Rate Type drop-down.
Under Tax Code, Enter FR.
Under Entity Use Code, select None.
In section 2 on the right, add the desired tax rate.
Click Save tax rule.

Step 1 | Create a taxability rule:

Click +Add a tax rule.
Enter a name for your custom rule (e.g. France Taxability).
Select a date when this rule starts to be applied.
(Optional) Select an expiration date for the rule.
Select Taxability rule from the Rule Type drop-down.
Select the same country you selected for the first rule.
(Optional) Select same region in the country.
(Optional) Select a jurisdiction.
Under Tax Type, select Input and Output tax.
Note: US merchants should select Sales or Sellers Use Tax.
Under Rate Type, select Standard.
Under Tax Code, enter FR.
Under Entity Use Code, select None.
In section 2 on the right, select Taxable.
Click Save tax rule.

FAQs

Click a question below to learn more about collecting tax with Avalara.

I already have an Avalara account. Can I connect to it?

Can I use the same Avalara account for my two Wix sites?

How can I check if Avalara is available in my region?

Can I manage some regions with automatic tax and others with manual?

How can I get information about the rate collected in a particular location?

How can I display tax estimates on the Cart Page?

Can I add new locations where I collect tax in the Avalara dashboard?

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