With a TaxCloud account, you’ll be able to:
- Determine, in real time, the applicable sales tax rate for all your transactions.
- Determine if items are tax exempt (including sales tax holidays).
- Automatically integrate changes to tax codes and rates.
- Track your monthly gross sales, exempt sales and taxable sales in every state
- Get detailed breakdown by jurisdiction within each state.
- Generate and automatically file your monthly sales tax returns.
- Remit sales tax proceeds to the appropriate state and local jurisdictions.
- Bypass state-issued correspondence, including notices and audit inquiries, because we handle those for you.
- Sales tax can be challenging to manage on your own. There are more than 12,000 sales tax jurisdictions in the Unites States.
- We are sales tax experts. Our team is comprised of former e-commerce retailers as well as former state revenue officials. Unlike other sales tax platforms, we know what you want (fast and reliable sales tax information, ideally for free), and we know what the states want (everyone collecting and filing sales tax correctly).
- Build your business. Let us do your taxes. Before TaxCloud, keeping up with every possible sales tax rate and product-type and use-based exemption rule in every state required your business to either hire a small army of tax attorneys and software developers, or license expensive enterprise-class sales tax software.
- And with TaxCloud, you can configure your account so the states pay for our service, making TaxCloud free for you. Our business model is different from other sales tax service providers. We believe that states should pay the cost of sales tax compliance, or at least subsidize that cost. That's why we have contracted with 24 states - with more on the way - to give you the option to have them pay for TaxCloud.
Yes, you can use TaxCloud just to calculate sales tax. It's not a requirement that we file and remit on your behalf. Of course, you or your accountant will still need to remit the collected sales tax proceeds to the appropriate state(s) and/or tax jurisdictions.
Yes. TaxCloud calculates all state and local sales taxes due and shows them as a single dollar amount at checkout.
The number of API-calls-per-transaction depends mostly on how many items your average customer places in his/her shopping cart when purchasing your products. For example, if your average customer puts 3 or 4 items in their cart, your total API count would breakdown as follows:
- Each item placed in the shopping cart will trigger a Lookup API call. This call tells TaxCloud to lookup the tax amount of each item, based on where it's being shipped to/from, how much it costs and any special taxability rules that may apply.
- If the customer subsequently purchases the items, TaxCloud will get a single "Capture" API call to tell us the official moment of taxation has occurred.
- ?You may also decide to use our Address Verification API (which we highly recommend) to ensure your customer has entered a valid destination address. This enables us to provide the most accurate sales tax information. Note: Without a valid shipping address, you may inadvertently under-collect sales tax and be liable to pay the difference.
So, most business have between 4 and 6 API calls per transaction.
What's an API
TaxCloud has several Application Programming Interfaces (APIs) to calculate sales tax when a customer buys something - but first, let's answer a common question: What's an API?
In computer programming, an API is a set of clearly defined methods of communication between various software components. A good API facilitates computer programming by providing the building blocks necessary for an application to work properly. The programmers job is to put these building blocks together in an efficient manner that provides end-users with a positive experience.
A common analogy to explain how APIs work is that of a waiter at a restaurant. For example, you tell the waiter what you want to eat and he/she writes it down (just like you complete the data fields in an API so it can get the information you want), the waiter then gives your order to a chef (like an API delivers your request to a database), the chef prepares your food (the database computes the data you entered) and then the waiter returns with your food (the API returns with the answer/ information you requested).
Below is a list of TaxCloud's most used APIs (please visit TaxCloud's main APIs for more information):
- Address Verification API - A valid shipping address must be provided at checkout to determine the most accurate sales tax. TaxCloud's Address Verification API works with your shopping cart to ensure customers enter addresses correctly, and asks customers to confirm an address if it's unrecognized by our database. Note, however that TaxCloud never stops a transaction from proceeding. It merely asks customers to confirm an address, and then provides the most accurate sales tax amount possible with the information provided.
- Lookup API Call - A “TaxCloud Lookup” is an API call sent to TaxCloud from a merchant to determine the sales tax amount of at least one product or service. A Lookup API call considers all relevant information provided by the merchant to determine the tax amount due: e.g. origin address, shipping address, item quantity, item taxability and item dollar amount.
- Duplicate Lookup Calls - A "Duplicate Lookup" is an original Lookup sent to TaxCloud multiple times. There is no reason to send duplicate API calls, so please talk to your developers if TaxCloud notifies you of duplicate Lookup calls.
There are various reasons why a Lookup call might be sent erroneously, but they're almost always tied to shopping cart settings/ configuration. For example, duplicate API calls sometime occur after a customer places an item in his/her shopping cart but then continues shopping, and the merchant’s website (shopping cart) is designed to send a new Lookup request each time the customer loads a new page as he/she browses the website's products.
- APIs for Order Completion - (Authorized and Captured; or AuthorizedWithCapture). These APIs let TaxCloud know when a customer has completed his/ her purchase and your store has collected the appropriate amount of sales tax. (Important: The Captured API call is required to prepare your sales tax reports and returns, regardless of who actually files your sales tax returns.)
The "Authorized" API call is sent to TaxCloud when a customer's payment instrument has been successfully processed. The "Captured" API call is sent to TaxCloud when a customer's order has been shipped. However, many merchants consider an item to be 'shipped' as soon as the customer's payment instrument is processed, so they combined the Authorized call and the Captured call into AuthorizedWithCapture.
- Returns - This step occurs when an order is cancelled or modified after it was completed (after the Captured call). Once a return is initiated through the store's cart admin panel, the store alerts TaxCloud and we modify our transaction records accordingly.
TaxCloud handles communication and correspondence between your company and the 24 Streamlined states when you use TaxCloud with Automated Compliance enabled.
TaxCloud has a dedicated "status" site (status.taxcloud.net) to communicate technical issues to merchants, partners, and states.
We also use this site to announce upgrades (including new features) before we announce them to the general public.
The best part: TaxCloud's status site supports email and text (SMS) subscriptions, so you'll be notified immediately of any issues.
Yes, offline transactions can be uploaded to your TaxCloud account.
Transactions must be uploaded between the first and tenth of the month, for the previous month's business. The information you upload will be included in your transactions history and monthly reports. Please note that offline transactions will be included in your returns if TaxCloud creates and files them for you.
The csv file needs to include the following pieces of information. Each should appear in a separate column in the following order
- Order ID Number
- Customer ID Number (Provided By Your Shopping Cart)
- Date the transaction Began (yyyymmdd)
- Date the transaction was authorized (yyyymmdd)
- Date the transaction was captured (yyyymmdd)
- Date the transaction was captured (yyyymmdd) (You can use the same date for all three fields-began, authorized, and captured)
- Code that indicates how the product was delivered by seller: 1 = seller's vehicle, 0 = other method such as UPS or FedEx
- First Line of the "ship from" address (for instance, 123 Main Street)
- Second Line of the "ship from" address (for instance, Suite 10)
- "ship from" city (for instance, Springfield)
- "ship from" 2 letter state abbreviation (for instance, MO)
Yes. At the end of each month, TaxCloud creates a report for each state that shows the sales tax collected by jurisdiction (state, city, county, etc.). Attached is a sample report for California.
Please login to your TaxCloud account and go to Settings... Contacts, and then click “Add contact.” Complete the required information and we’ll send your new contact an email so he/she can create their own login and password for your TaxCloud account.
Please note that you can set a Contact's role on the "Add Contact" screen. Contacts can be designated as: Administrators, Financial, Technical, and Audit (read-only authority).
Yes. TaxCloud calculates sales tax, and offers filing and remittance services for every tax jurisdiction in the United States. Moreover, we automatically track and update changes to state and local tax codes & rates (including sales tax holidays) to ensure the correct amount of sales tax is always charged.
Please see the related video, "Adding Locations and Licenses to Your Account".
The tax treatment for returned items depends on the return date vis-à-vis the purchase date.
If an item is purchased and then returned within the same month, the transaction offsets itself. However, if an item is purchased and then returned in a future month, the value of the items sold (along with any shipping charges) is applied to the month in which the original sale occurred – while the returned sales tax is applied in the current month, thereby creating a tax credit in the same jurisdictions in which the tax had been paid.
Your shopping cart or order management system should allow you to handle merchandise returns and other adjustments to existing orders through your cart admin panel. Once you create a return or partial return, your cart communicates with TaxCloud and TaxCloud credits your account for the sales tax originally paid on the returned or refunded amount.
You can view the details of a return on your “Transactions” page, where it will appear within the original order.
TaxCloud does not provide a list of state and local sales tax rates. Instead, TaxCloud integrates with your shopping cart or order management system to calculate sales tax on individual items, at checkout.
Yes, TaxCloud will calculate sales tax based on a shipping address with a p.o. box. As always, please use a 'verified' U.S. shipping address to include the full 9-digit zip code, if possible.
When no shipping address is supplied — for instance, when a digital product is purchased for download — TaxCloud checks for other information that is available. The exact information we seek and the order in which we look for it is different for different states, but the tax rate is usually based on the customer’s billing address if there’s no shipping address.
All this happens behind the scenes, so you don’t need to do anything differently if you’re selling digital goods.
Sorry, right now TaxCloud calculates sales tax for only US locations. However, we plan to expand internationally in the coming year.
TaxCloud established the "Getting Started" credit for new merchants in order to offset ordinarily applicable service fees. New merchants can use this credit during the first sixty days following the creation of an account. The amount of the credit is $200.
Note: New merchants will still receive TaxCloud's monthly "Advice of Charge" email just like existing merchants. This email is sent to all merchants to let them know how much TaxCloud will be charging them (if anything) in the coming days. For new merchants, however the email will also include the Getting Started credit to offset any fees that would otherwise be applicable.
Please see Exhibit A in TaxCloud's Terms of Service for additional information.
Yes! The steps to go "Live" after you create an account are listed below. Additionally, please see our videos on the subject at TaxCloud Videos to Get Set Up
You'll also note that a "Go Live Advisor" appears at the top of the screen after you initially login to your account. The "Go Live Advisor" walks you through the steps required to take your account Live. Until you Go Live, your account is in test mode. (Please note that TaxCloud will not generate reports, file returns or remit funds for test transactions.)
Here are the steps to Go Live:
- Add your business' state of incorporation by going to Settings... Profile. While you are on the Profile tab, please complete the other pieces of requested information too. (The W9 is optional, but required if you need to change your Legal Name and/or Streamlined tax ID)
- Enter you business' address(es) by going to Settings... Locations
- Enter your payment instrument - either a credit card or a bank account. Please note, you must enter a bank account and routing number if TaxCloud is remitting taxes to the state(s) for your business. This is because we have to pull the tax proceeds you've collected in the previous month to send to the appropriate states' Department of Revenue.
- Configure your account to collect sales tax in specific states by going to Settings... Manage Tax States. The first thing you'll see is a map of the United States. Note that any state where you entered an address (Step 2 above) is highlighted in orange, while the 24 blue states are participants in the Streamlined Sales and Use Tax Agreement.
By default, every new account is set up to collect sales tax in any state with a business address, as well as the 24 Streamlined states. You have the option to turn off collection in the 24 Streamlined states, however TaxCloud will no longer be free.
If you want to collect tax in another state, just click on it and answer the questions: your sales tax ID for the state, your filing frequency (monthly, quarterly, etc.) and (if TaxCloud is filing for you) your login credentials for that state's Department of Revenue website.
- Get your API credentials to connect your online store/ website to TaxCloud by going to Settings... Stores & Websites
- Decide if you want to participate in Automated Compliance by going to Settings... Automated Compliance. To learn more about Automated Compliance and the different ways you can configure your TaxCloud account, please click the links below.
Info on the Streamlined Sales and Use Tax Agreement (SSUTA): Info on SSUTA
Info on TaxCloud configuration options: Set-up-and-Registration
- Though not mandatory prior to going Live, please remember to select the appropriate Taxability Information Code (TIC) for any items you sell that may receive special tax treatment. For example, many states apply special sales tax rates to items like food, clothing and medicine. The general default TIC for items that do not get special treatment is "00000". A list of TaxCloud's TICs can be found here: Taxability Codes
Though not mandatory prior to going Live, please remember to select the appropriate Taxability Information Code (TIC) for any items you sell that may receive special tax treatment. For example, many states apply special sales tax rates to items like food, clothing and medicine.
The general default TIC for items that do not get special treatment is "00000".
Please click the following link to explore TaxCloud's taxability codes: https://taxcloud.com/tic
Steps to connect your Amazon seller central account with TaxCloud
- Login to you Amazon Seller Central Account
- From your home page, click the ‘APPSTORE’ drop down and select ‘Discover Apps’
- From the Appstore, select ‘Accounting and Tax Remittance’ and then select the ‘TaxCloud‘ tile on the page that follows
- Next select ‘Authorize now’ to begin the authorization process
- Continue the authorization process by clicking ‘Next’
- You will be prompted to confirm you understand that this process gives TaxCloud access to your account
- Finally you will get a confirm page that you have successfully granted access. Record the ‘Seller ID’ and ‘Marketplace ID’ information as you will need to enter this data in your TaxCloud account.
- Now navigate to TaxCloud and sign in to your account
- After signing in, click the ‘Settings’ navigation button and then click the ‘Stores’ icon
- The Stores page allows you to add a new store
- After adding the new store you will see a ‘Sales Tax Reports’ button
- Sales Tax Reports can be found and generated here in your Amazon Seller Account:
- When you are ready to submit live transactions to your account make sure to select the ‘Go Live’ button. Accounts that are already live, will have a Live label instead of the button.
TaxCloud is paid for by the states (so it's free for you!) when you use our Automated Compliance service. With Automated Compliance, you collect sales tax in the following 24 "Streamlined" states: AK, GA, IA, IN, KS, KY, MI, MN, NC, ND, NE, NJ, NV, OH, OK, RI, SD, TN, UT, VT, WA, WI, WV, WY. These are the states that participate in the Streamlined Sales and Use Tax Agreement (SSUTA).
Once you've collected sales tax in the above states for a given month, TaxCloud will debit your bank account the following month for the taxes you collected and then file the appropriate returns. Please note that you cannot "pick-and-choose" individual states among the 24 Streamlined states if you're using TaxCloud's Automated Compliance service. That is, you have to collect in all 24 states or select a different set-up option.
Please see below:
- As mentioned above, TaxCloud will calculate, file and remit on your behalf for free in the 24 Streamlined states since those states pay TaxCloud for the proceeds we send to them. In fact, you can use TaxCloud for free even if you also have to collect in a single non-streamlined states (e.g. CA), so long as you still collect in the 24 Streamlined states.
For example, say you have to collect sales tax in WI, TN, MI and CA. In that case, it probably makes sense to register for the Streamlined program and collect in the 24 Streamlined states since WI, TN and MI are among the 24 states that participate in that program. TaxCloud would then file and remit for you in those states and you would file and remit in CA. There would be no cost to you in this example.
- In the next scenario, everything is the same as above except we’ll assume you also must collect in TX and NY. In that case, TaxCloud would not be free. Your cost would depend on who files and remits for your business in the non-streamlined states.
If TaxCloud files and remits for you, the fee is between 0.125% and 0.50% of your sales in the given non-streamlined state. If you do it yourself, however, TaxCloud only charges for your API calls in that state.
- The last option is to not participate in the streamlined program but, instead, select the individual states where you want TaxCloud to calculate sales tax. In this case, you only pay TaxCloud for API calls. (You would be responsible for filing yourself in the given state(s).)
You can see our API fee purchasing options at the bottom of our Home Page.
The process to obtain a sales tax licenses is very straightforward.
- The first thing you'll need to do is collect basic information for your business, such as its EIN Number, type of ownership, date the business was founded, legal name, etc.
- Use this link to lookup your business' North American Industry Classification System number. Most states ask for this number as part of their application process.
- Once you have your paperwork together, ask you accountant or tax attorney for a list of states where you'll need to file and remit sales tax proceeds.
- Go to each state's Department of Revenue website and click on the section for "Sales and Use Tax". The state's website will walk you through the registration process..
Tip: Have a credit card handy. The state may charge a small fee to process your application.
To briefly review the discounts issue:
The term "Sales Price" is defined by state law (in every state) and is set by the Seller, not the tax processor. Once the Sales Price is set by the seller, the tax amount due can be calculated. States have no tax definition for "Discounts" or rules on how to get the sales tax amount due on a negative Sales Price.
Because each item may taxable or exempt, when a discount is applied, the methodology of exactly how that discount is applied is a relevant business decision for the Seller.
For example, does the Seller apply the discount:
- Evenly (DiscountDollars divided by AllItemsCount) [easiest]or
- Proportionally (LineItemSalesPrice divided by AllItemsSalesPrice multiplied DiscountDollars), or
- Sequentially (reducing the LineItemSalesPrice of an item down to zero, if additional DiscountDollars remain, continue through each additional line item until DiscountDollars is exhausted), or
- Preferentially (exempt items before the taxable items, or vice-versa)
Whichever methodology is employed should be documented by the Seller, and implemented by the selling platform (or if already implemented by the platforms, the methodology should be a disclosed Discount Application Policy).
Finally, after any discount has been applied, and the revised Sales Price has been determined, a new tax Lookup should be performed.
There's no need to create a separate test account with TaxCloud. Every account is in test mode until a website's API credentials associated with the account goes live (by pressing a "Go Live" button in TaxCloud).
You can associate as many websites with your TaxCloud account as you want, and each will be given a unique set of API credentials. All transactions from a Website's API credentials are test transactions until you specifically press the Go Live button for that particular Website. Once a Website is marked as Live in TaxCloud, all transactions from that point forward will be included in our automatically generated (and optionally filed) sales tax returns and reports.
All of your development and staging websites that are not marked as Live will behave exactly like your Live production websites, but those transactions will never be included in any sales tax returns or reports.
First, be sure that you have a Tax ID in each of the non-streamlined states where you want to collect sales tax.
If you want TaxCloud to file for you in any of those non-streamlined states, please do the following:
- Login to your TaxCloud account and go to Settings... Automated Compliance.
- Give the page a second to load and then click "Configure Automated Filings". It's located in blue font just below the Automated Compliance 'toggle' switch.
- From the list of states that appear, click the switch next to the state's name and enter your business' Login ID and Password for the Department of Revenue website in that state. Then click Save.
Let's say you pre-paid for 15,000 API calls per month, for the year starting in Sept, 2018 but then had 17,000 API calls in November (i.e. you went over your monthly limit).
TaxCloud's system would:
- Automatically bump you up to the next tier at the month-to-month rate, and...
- Charge the amount due against your current credit balance (i.e. your daily rate x the number of days remaining in your annual plan).
TaxCloud needs to receive a "Capture" API call so we know which items in the shopping cart have been purchased.
When items are placed in a shopping cart, TaxCloud receives a Lookup API call to determine the amount of sales tax to include with the order. Then, when the customer is ready to buy the items you must send TaxCloud an Authorize API call and a Capture API call.
The Authorize API call confirms that the customer has paid for the item(s). The Capture API call confirms that the item(s) have been shipped. Please be aware that you can combine these two API calls into one API call using "AuthorizeWithCapture".
Note: If you permit customers to apply coupons or discounts to their order once items have been placed in the shopping cart, be sure to send TaxCloud another Lookup API call after the discount has been applied.
No. You will receive one Streamlined Tax ID for all 24 SSUTA states. Additionally, please note that your business will not be registered as having nexus in a SSUTA state simply because you have Automated Compliance turned on. You will only have nexus in a SSUTA state if you already meet the state’s criteria for nexus.
Absolutely. There are no "sandbox" accounts at TaxCloud—just register for a TaxCloud account as usual and it will automatically start in test mode. It will stay in test mode until your Configuration Window expires. If you prefer to have an outside party test TaxCloud for you, the process is the same—all you need to do is give them access to your account.
Before you begin using TaxCloud, please make sure:
- You have a valid Secure Sockets Layer (SSL) certificate
- Your website is capable of initiating both client and server-side SSL connections
- Your website has server-side scripting or CGI capabilities, such as ASP Classic, ASP.NET, C#, Cold Fusion, Java, Perl, PHP, or VB.Net
- You are able to save/retain TaxCloud API credentials (TaxCloud API ID and API Key)
Please see our "Get Started" video.
Yes. However, the steps involved depend somewhat on the shopping cart or order management system you use. With some shopping carts, all you have to do is click a checkbox to activate TaxCloud. Other carts require a little cutting and pasting of code.
If you can manage an online store, you certainly have the ability to install TaxCloud.
For additional information, please see our instructional video:
Once you login to your TaxCloud account, your API ID and API Key can be found by going to Settings (on the left) and then selecting "Stores & Website".
Please see the following video for more information.
TaxCloud rounds at the 5th decimal, based upon Item and Quantity. Having said that, the states permit item-level rounding regardless of quantity, though TaxCloud does not do this (because we have quantity data).
Line item 1: Hat
Item Price: $10.00
Applicable rate: 0.07253333
TaxCloud rounded rate: 0.07253
TaxCloud resulting tax amount due: $0.73
Line item 1: Hat
Item Price: $10.00
Applicable rate: 0.07253333
TaxCloud rounded rate: 0.07253
TaxCloud resulting tax amount due: $1.46
However, with item rounding (ignoring quantity) the transaction with quantity 2 yields a slightly different result:
Line item 1: Hat
Total Price: $20.00
Applicable rate: 0.07253333
TaxCloud rounded rate: 0.07253
TaxCloud resulting tax amount due: $1.45
The states will accept either calculation methodology as valid, though (not surprisingly) they prefer item and quantity based calculations. As your analysis of SimpleSalesTax shows, they have a different methodology, but - again - it is ok as far as the states are concerned. They understand that there are different approaches and allow for rounding 'errors'.
TaxCloud's system automatically triggers this notice if/ when a merchant has several transactions (to multiple addresses) but all the data is processed through their Test site, while no transactions are processed through their Live site.
This could happen for various reason. For example, a merchant may mistakenly use their Test API credentials, instead of their Live API credentials in their production environment. If this were to happen, TaxCloud faces the risk of inadvertently filing zero returns even though the merchant did, in fact have sales.
It is critical to ensure that all bonafide sales are processed through Live API credentials.
Duplicate Lookup calls have the exact same data as a previous Lookup (essentially, a cached call). Each Lookup is 'fingerprinted', so a duplicate call is an exact replica of an API call that's already been sent to TaxCloud. The problem with duplicate calls is that they slow down the system unnecessarily.
Duplicate/ redundant calls can happen for various reasons. For example, please make sure your shopping cart is not re-sending a Lookup request each time a customer moves from one page to another, after having placed an item in his/her shopping cart.
It shouldn't be hard for your developers to figure out why the shopping cart is re-sending the same Lookup.
If you haven’t yet clicked “Go Live!”, your TaxCloud account is still in test mode and you don’t need to worry about any of the transactions you’ve uploaded. In fact, we encourage you to complete and upload test transactions to make sure TaxCloud is functioning properly with your website before you go Live.
However, if you have already gone Live and want to delete a transaction, just process the transaction as a return and TaxCloud will automatically update your sales tax records.
If you’re not sure if you uploaded a Live or Test transaction, check to see which transactions are displayed on the “Transactions” page.
To do this, Click on the the three vertical dots in the upper right corner and a window will open, as per the screenshot below. By default, the system always shows completed (Captured) Live transactions once your account is Live. To switch to the Test account view, just de-select the 'toggle switch' for "Show Live Transactions".
We usually see this question when someone has just switched their account from Test mode to Live mode. When that happens, the default setting on the Transactions page switches to “Live” transactions.
To see your previously uploaded Test transactions, click on the the three vertical dots in the upper right corner. A window will open, as per the screenshot below. By default, the system always shows completed (Captured) Live transactions once your account is Live. To switch to the Test account view, just de-select the 'toggle switch' for "Show Live Transactions".
If that doesn't solve the problem, please contact us at firstname.lastname@example.org.
TaxCloud uses TICs to make sure each item in your catalog is taxed at the right rate (or, for tax-exempt items, not taxed at all), so it’s important to make sure each item is assigned a TIC.
If you can’t find the right tax category for an item in your catalog, you can assign it to the “General Goods and Services” TIC, 00000. TaxCloud automatically assigns products to this TIC as a default, so unless you’ve changed an item’s TIC in the past, it should already be set to 00000.
If there is no TIC for a product or service you're certain receives special tax treatment, TaxCloud will created a new one. However, we require supporting documentation.
If you believe that the wrong sales tax rate is being applied to a transaction, first make sure the following account settings are correct:
- Are all of your physical locations entered in TaxCloud? (See the Locations tab)
- Have you selected every state where you’re collecting sales tax on the Tax States map? States where you are collecting appear in blue or orange.
- Is a complete, verified address being used? Some states require more than just a 5-digit zip code for sales tax rates; a Plus-4 zip code (XXXXX-XXXX) or even a complete address may be necessary to get the correct rate. Address verification ensures the most complete address possible is being used.
If the answer to any of these questions is "no," correct the setting and then recheck the rate. If the answer to all of these questions is "yes" and the rate is still wrong, please email us at email@example.com.
NOTE: As described in our Terms of Service, TaxCloud provides certain indemnification from liability for unintentional errors and omissions in the 24 SSUTA states when merchants use their account with Automated Compliance turned on (or “activated”). We offer this benefit because TaxCloud is certified by the 24 SSUTA states and, as such, has agreements and privileges with these states that help protect you.
TaxCloud knows where you must collect sales tax based on how you've configured your account. There are two ways to tell TaxCloud where to calculate and/or collect sales tax:
- Add a business address (or addresses) on the "Locations" page - i.e. if you have physical nexus in a state, and;
- Go to the "Tax States" page and select a state for sales tax collection by highlighting it on the map (or picking it from a list) - i.e. if you have economic nexus in a state.
Please see a list of shopping carts and order management systems in the section, "TaxCloud Partners and Plug-Ins".
No. You can use multiple carts with the same TaxCloud account. All you have to do is add each website/ cart to the “Stores & Websites” tab in Settings, and then click "Go Live" once you're done configuring your account.
For information on activating TaxCloud with a particular shopping cart, please see that cart's TaxCloud instructions.
This is a very popular question, especially given states' frequently changing tax laws. Unfortunately, TaxCloud cannot answer this question. Our lawyers tell us we can’t give tax advice. Please talk to your tax or accounting professional to find out where you’re required by law to collect sales tax.
TaxCloud uses what we refer to as Taxability Information Codes (TICs) to keep track of items (or categories of items) that are tax-exempt in certain states. When your shopping cart requests a sales tax rate from TaxCloud, the order information should automatically include a TIC with the request. TaxCloud will respond with the correct sales tax rate based upon the provided TIC.
TaxCloud's TIC merchandise classification hierarchy is based upon the standard definitions established by the Streamlined Sales and Use Tax Agreement.
For a complete description of available TICs, please review our TIC documentation at https://taxcloud.net/tic/.
Important note for developers: TICs and their associated definitions are updated regularly by the states. Do not download and retain these codes as static resources in your local, test, or deploy environment. The complete TIC current list is always available for automated inclusion through various real-time feed formats, including JQuery, JSONP, JSON, TEXT, XML, and CSV.
For additional developer resources, please visit TaxCloud's developer portal at https://dev.taxcloud.com.
The treatment of returned items depends on the return date vis-à-vis the purchase date.
If an item is purchased, and then returned, within the same month, the transaction offsets itself. If an item is purchased and then returned in a future month, however the value of the items sold (along with any shipping charges), is applied to the month in which the original sale occurred – while the returned sales tax is applied in the current month, thereby creating a tax credit in the same jurisdictions in which the tax had been paid.
Please click the link below to access documentation on implementing TaxCloud's API for exemption certificates. The information is located in TaxCloud's Developer portal, which includes several resources for developers.
Yes. Shipping charges are subject to sales tax in many states. If the order is being shipped to a state that taxes shipping, TaxCloud calculates and applies the appropriate sales tax.
Please be aware that TaxCloud provides two Taxability Information Codes (TICs) related to transportation, shipping, postage and similar charges.
Please select Postage/Shipping TIC 11010 if you are charging your customer your actual shipping cost as can be demonstrated by your invoice from your shipping provider.
If you offer "Flat Rate Shipping" (regardless of your actual shipping costs), or if you markup your shipping charges (charging your customers more than your actual shipping cost), you should use Shipping & Handling TIC 11000, available in the Administrative TIC category.
For a complete list of TaxCloud's taxability codes, please visit https://taxcloud.com/tic
Questions to Consider
- What is a drop-shipper?
Drop-shipping is a retail fulfillment method where a store doesn't keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer.
The biggest difference between drop-shipping and standard retail is that with drop-shipping the selling merchant doesn't stock or own inventory. Instead, the merchant purchases inventory as needed from a third party (usually a wholesaler or manufacturer) to fulfill orders.
- Do I have nexus in the state(s) where my drop-shipper is located?
Unfortunately, there is not a single correct answer to this question. It depends on too many variables specific to your business - e.g. where you're based, where your drop-shippers are based, where your employees live, the dollar-value of your sales in a given state, the number of transactions you have in a state, etc. Please ask your tax attorney or accountant to provide guidance on where you have nexus, and whether you have to collect sales tax in a given state.
- All the drop-shippers I use are based in Streamlined states. Can I collect and file in only those states, or do I have to participate in the Streamlined program?
TaxCloud will file and remit your sales tax returns for free in all 24 Streamlined states (including the ones where your drop-shippers are located) if you decide to participate in the Streamlined program. TaxCloud can offer its service for free because the 24 Streamlined states pay TaxCloud for the funds it remits on merchants' behalf.
Alternatively, you can select individual states where you want TaxCloud to calculate tax, but then our service is not free. The cost depends on the number of states and whether TaxCloud is file/ remitting for you, or merely providing the sales tax amount to collect at the moment of sale (in which case you'd file yourself).
The Streamlined Sales and Use tax Agreement (SSUTA) is an agreement among 24 states to simplify and standardize sales tax calculation, collection and remittance. As stated on the website of the governing board that oversees the program SSUTA Governing Board Website:
The purpose of the Agreement is to simplify and modernize sales and use tax administration in order to substantially reduce the burden of tax compliance. The Agreement focuses on improving sales and use tax administration systems for all sellers and for all types of commerce through all of the following:
- State level administration of sales and use tax collections.
- Uniformity in the state and local tax bases.
- Uniformity of major tax base definitions.
- Central, electronic registration system for all member states.
- Simplification of state and local tax rates.
- Uniform sourcing rules for all taxable transactions.
- Simplified administration of exemptions.
- Simplified tax returns.
- Simplification of tax remittances.
- Protection of consumer privacy.
NOTE: TaxCloud has an agreement with SSUTA whereby member states will pay merchants' costs for TaxCloud's sales tax compliance services if the merchant agrees to collect and remit the states' sales tax.
Please follow the steps below to un-enroll in the Streamlined Sales and Use Tax Agreement (SSUTA). Please remember, TaxCloud is not free if you turn off Automated Compliance and thereby opt out of SSUTA.
Steps to Opt Out of SSUTA:
- Login to your TaxCloud account
- Go to Settings... and then, "Automated Compliance".
- Click the 'toggle' switch in the middle of the screen where it says, "Automated Compliance".
- The system will then ask you to select an API plan, depending on the number of monthly calls you expect to make. You can pay month-to-month or save 50% by paying for a year upfront. Plans start a $9 for 1,000 API calls.