Configure taxes in your Ecommerce settings.
Note: We’re transitioning to Workspaces, and are in the process of updating our content. Visit the Workspaces blog post to read more about these updates and changes, or visit our updated lesson on configuring taxes on Ecommerce orders. You can also learn how to check if your account is on Workspaces.
In this lesson:
Sales taxes and VAT can be automatically calculated for the United States, Canada, the European Union, and Australia. These taxes are powered by TaxJar's comprehensive and constantly updated tax calculation system. You can turn this option on or off for those countries if you’ve set them as shipping zones in your shipping settings.
For orders outside of these countries, you’ll need to calculate taxes manually, outside of Webflow — but we’re planning to make this process smoother by allowing you to manually set specific tax rates for regions in the future.
Note: Your VAT ID can be added to your invoices in Account Settings > Billing.
Need to know
Even though Webflow can help you calculate taxes for supported countries automatically, it is your responsibility to ensure that the calculations are correct for your business, and to file and pay these taxes to the appropriate tax authorities. We recommend that you work with a tax expert who has a complete understanding of your specific business situation, to ensure that you are compliant with all applicable tax regulations.
Some countries require that tax be included in the product price and not added as a separate line-item during checkout. If you do ship to such countries, you’d want to make sure your product prices are tax-inclusive.
If you've included taxes in your product prices, switch this option “on” in Settings → Ecommerce → Taxes settings.
We'll calculate your taxes using this formula: tax amount = (tax rate * price including tax) / (1 + tax rate). So if your tax rate is 20%, the formula for a $20 item would be: (20 * .20) / (1 + .20) = $3.33.
Here, you’ll see a list of all countries that you’ve chosen to ship to. To add more countries, update your shipping settings.
To automatically calculate taxes for orders placed in a country, click the country name in the list and switch the auto tax calculation option “on.” Conversely, you can switch this option off for any country if you do not want Webflow to automatically calculate your taxes.
Nexus is a complicated topic — it refers to a connection or relationship between your business and relevant tax jurisdictions. In many cases, nexus is established based on whether or not your business has a physical presence in a specific country, state, or region — such as a physical store, warehouse, office, etc.
However, different jurisdictions define nexus differently. In some U.S. states, for example, nexus can occur even if you only have an employee who lives and works in the state, have inventory in the state even if handled by an external fulfillment service, etc.
For accurate tax calculations, you need to add all addresses associated with your business that could determine nexus with any of the areas you accept orders from. Your primary store business address is added and used by default, but you can add [+] any additional nexus addresses as well.
If you need help understanding and determining what nexus addresses you should add for your calculations, you should work with a tax expert who knows your specific business situation well.
Accurately report what types of products you're selling by setting tax classes per product. By default, this option is set to “Standard automatic tax calculation” for all products.
While you can go in and change the class for each product, you can also select “Exempt from taxes” to not charge sales tax on that product. Currently, this option is limited to the US and certain EU countries. Visit the Taxjar categories page for more information.