WooCommerce is a leading eCommerce plugin for WordPress that enables online retailers to build their own online retail store. Setting up sales tax collection in WooCommerce is a major step in setting up a store. The most crucial step before that is determining where to collect and remit sales taxes.
Some online platforms used for selling products are considered Marketplace Facilitators. This means that the platform is responsible for collecting and remitting sales tax. This removes the responsibility to collect and remit sales tax as a seller on those platforms. WooCommerce is not considered a Marketplace Facilitator, so sellers on this platform are responsible for collecting and remitting sales tax.
WooCommerce retailers are responsible for collecting and remitting sales tax on applicable orders. The platform does not handle sales tax collection or sales tax settings for sellers. Before enabling tax collection for your online store, important to evaluate where you have sales tax nexus and whether your products are taxable in those jurisdictions.
Getting Started with WooCommerce Sales Tax
- Complete a thorough sales tax nexus review for both physical nexus and economic nexus.
- Register necessary sales tax account.
- Obtain sales tax certificates.
- Enable sales tax collection on all required platforms for the registered jurisdictions.
- File sales tax returns and maintain sales tax account.
Sales Tax Collection in WooCommerce
WooCommerce provides online sellers the option to enable sales tax collection either manually or automatically using the WooCommerce Plugin or a third-party plugin. The best option for your online store depends on the products you sell, and the jurisdictions that you have a responsibility to collect and remit sales tax.
Sales Tax Reports
The Sales Tax Report can be accessed using the data analytics tool WooCommerce Analytics. Navigate to Analytics > Revenue > Taxes in WordPress to get started. The Taxes Report provides insights into taxes collected on your store.
The default report displays the All-Taxes view. All taxes that have been collected in the date range will be displayed. Customize the date range and taxes shown to display the sales tax data for a specific period.
The report table provides the following details:
- Tax Code— The tax code associated with the tax collected.
- Total Tax — Order tax + shipping tax
- Order Tax — Tax collected on orders
- Shipping Tax — Tax collected on shipping
- Orders — Count of orders
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