Navigating how to set up taxes on BigCommerce? Unsure if you’re following each state’s sales tax protocols and staying compliant to avoid an audit? Confused about exemptions, rebates, and local shipping taxes?
TaxJar’s mission is to simplify eCommerce for everyone. By creating integrations that automate sales tax compliance for online sellers, including our BigCommerce integration with instant, accurate sales tax calculations at checkout, we hope to do just that.
But we know many sellers still have questions about sales tax. Here’s a step-by-step sales tax guide for BigCommerce sellers, with details on the integration as well as how to stay compliant.
Step 1: Determine where you have sales tax nexus
Forty-six states and the District of Columbia require merchants to collect sales tax from buyers. Only merchants who have sales tax nexus in a state must collect. While all states have a slightly different definition of this term, sales tax nexus is generally defined as “presence” in a state. Presence can include — but is not limited to — an office, economic activity in a state, an employee, or a warehouse.
If you have sales tax nexus in a state, then you’re required to collect sales tax from all buyers in that state regardless of where the item is shipped from. Read about each state’s economic nexus laws here.
With TaxJar, you can track where your business is approaching nexus in a new state with the Economic Nexus Insights dashboard, so you can stay proactive when it comes to collecting sales tax.
Step 2: Register for a sales tax permit
If you have sales tax nexus in a state you are required to register for a sales tax permit in order to begin collecting sales tax in that state. In fact, some states consider it unlawful if you collect sales tax without first obtaining a permit.
To file for a sales tax permit, visit the Department of Revenue website of any states where you have sales tax nexus. For quick links and more information about sales tax in each state, check out this map. Keep in mind that some states will charge for a sales tax permit while others don’t.
When you’ve filed for a sales tax permit, the state will tell you how often and exactly when to file a sales tax return and remit sales tax. These sales tax deadlines are usually either monthly, quarterly, or annually. Don’t be surprised if, when you register for a sales tax permit in more than one state, they want you to file sales tax at different times. One state may want you to file every month while another may only want to hear from you once per year. Every state is different in how they govern sales tax.
Step 3: Collect sales tax
Next it’s time to set up your BigCommerce store to collect sales tax. With 14,000 sales tax jurisdictions and 46 states and D.C. imposing sales tax laws, it’s important that the sales tax integration you choose offers instant, accurate rates that don’t slow down the checkout experience.
To set up the TaxJar integration with BigCommerce store, log in, go to Store Setup > Tax, then select Add Tax Service.
Then, click Install next to TaxJar and simply Confirm TaxJar access. You may then need to log in to your TaxJar account.
To allow TaxJar to power real-time sales tax calculations for your BigCommerce store, go to Store Setup > Tax, then select Enable next to TaxJar. A TaxJar Professional account will be required for real-time sales calculations on most stores.
Not only can you configure BigCommerce to collect sales tax from buyers in multiple states, you can also configure your sales tax collection however you want, including:
- Control over which address the tax is based from (shipping, billing, or store location)
- Ability to create custom tax classes allowing you to have specific tax rates for groups of products
- Product, customer, and wholesale exemption management
- Setting up fallback or manual tax rates for when the sales tax API is inaccessible (which is very rare — TaxJar’s API has a 99.99% uptime and is 16 times faster than our closest competitor.)
Find out more about setting up sales tax in BigCommerce at the BigCommerce tax settings support page.
Step 4: Calculate how much sales tax you’ve collected
Now that you’ve configured your sales tax settings in BigCommerce and collected sales tax from customers, it’s time to figure out how much you’ve collected in order to prepare a sales tax return.
Often, states want to know how much sales tax you collected from buyers in each city, county, or special taxing district. With the BigCommerce and TaxJar integration, TaxJar creates sales tax reports on tax collected, and configures it in the format that states want to see.
If you sell on more channels than just BigCommerce, such as eBay, Amazon, Etsy, or Walmart, integrated sales tax reporting can be especially helpful, so you can see sales tax collected in one dashboard rather than tediously running reports one by one by one.
Step 5: Determine when to file your sales tax returns
When you register for your sales tax permit, states will put you on a filing schedule and let you know the dates your sales tax returns are due. They’ll generally put you on a monthly, quarterly or annual filing schedule.
Below is an example of filing frequency rules from the state of Massachusetts. View all state deadlines in this state-by-state guide.
Step 6: File sales tax
It’s showtime. When you registered for a sales tax permit, your state gave you sales tax filing due dates.
You have some choices here. You can file on paper and send your filing in by mail (archaic and difficult), you can file online at your state’s department of revenue (much easier, and many states even require this), or you can let TaxJar AutoFile your sales tax for you.
With AutoFile, TaxJar will file your state sales tax returns on your behalf, and remit payments to the state, so you never miss a due date. We’ll even take advantage of any state sales tax discounts that you may be eligible for, and remit them right back to you. That way, you can get back to running your BigCommerce store rather than worrying about sales tax.
Many states require you to file a zero return even if you never collected any sales tax during the taxable period. Make sure to check with your state before you ever miss a due date, or you may owe a penalty.
Step 7: Rest!
Congrats! You’ve put a lid on sales tax. Of course, we realize you may have more questions about BigCommerce sales tax.
If you do, explore this guide, Top Questions About Sales Tax on BigCommerce, Answered. We combed the BigCommerce Community forum to help answer the most frequently asked sales tax questions, about local taxes, rebates, exemptions, CBD products, and more.