In this lesson, you’ll learn:
- How to calculate general tax settings
- How to calculate taxes for supported countries
- How to determine Nexus addresses
- How to set tax classes per product
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. Learn more about shipping zones.
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: For information on Webflow sales tax, visit our dedicated lesson on location-based sales tax on Webflow subscriptions.
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.
How to calculate general tax settings
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’ll want to make sure your product prices are tax-inclusive.
I’ve included all taxes in my prices
If you’ve included taxes in your product prices, switch this option “on” in Settings panel > Ecommerce > Taxes.
We’ll calculate your taxes using this formula: tax amount = (tax rate * price including tax) / (1 + tax rate). If your tax rate is 20%, the formula for a $20 item would be: (20 * .20) / (1 + .20) = $3.33.
How to calculate taxes for supported countries
You’ll find a list of all countries that you’ve chosen to ship to in Settings panel > Ecommerce > Taxes. To add more countries, update your shipping settings.
Auto tax calculation
To automatically calculate taxes for orders placed in a specific 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 don’t want Webflow to automatically calculate your taxes.
How to determine Nexus addresses
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 US 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 by visiting Settings panel > Ecommerce > Taxes > Nexus addresses and clicking Add address.
If you need help understanding and determining which nexus addresses you should add for your calculations, you should work with a tax expert who knows your specific business situation well.
How to set tax classes per product
You can set tax classes per product to accurately report what types of products you’re selling. By default, this option is set to “Standard automatic tax calculation” for all products.
While you also have the option to change the class for each product, you also have the option to select “Exempt from taxes” to not charge sales tax on a product. Currently, this option is limited to the US and certain EU countries. Visit the Taxjar categories page for more information.