Taxes

Quick start guide: Learn more about taxes

Important: Information on this page doesn't constitute tax, legal, or other professional advice. Don't use it as such. If you have any questions, consult your professional tax advisers. When tax settings are applied on your business account, sales tax will be assessed and calculated for each shopper’s order based on the settings, tax rates, and override rules that you've configured. You can manage tax settings from the Settings tab of the merchant console.

Note: You're responsible for identifying your tax obligations. You’re responsible for correctly configuring your tax settings in accordance with your tax obligations. We don’t audit or review your tax settings, especially not within the circumstances of increasing tax compliance. You’re responsible for preparing returns, filing, and remitting taxes to government. We don't file or remit taxes to any government on your behalf.  

Getting started: Manage taxes

Use the merchant console to activate tax settings, add locations to specify where you need to collect taxes, configure how tax should be calculated for each location, create tax categories and tax override rules.

You can manage tax settings from the Settings tab of the merchant console. In the Settings tab, you can find Taxes. In Tax settings, you will encounter General and Categories tabs. Until you toggle on ‘Apply taxes’ in General tab, you won’t be able to view rest of tax settings and you won’t be able to access Categories tab. If you need to apply and collect taxes on any of your Buy with Prime offers, choose Apply taxes in General tab. Afterwards, you can configure for which locations you need to collect taxes in Edit region > Locations. You can create tax categories in Categories tab. Lastly, you can create and manage tax override rules in Edit region > Overrides.

Apply tax settings:

Note: As of today, selecting apply taxes does not on its own start calculating and charging taxes for your shoppers' orders. You must also specify which locations need tax calculation and collection.

Step 1Open the merchant console.

Step 2Choose Settings, and then Taxes.

Step 3Choose Apply taxes.

Step 4When prompted to apply taxes at checkout, choose Apply taxes.

Step 5Choose Edit region to begin adding locations where you want sales tax applied. 
 

Add location:

Note: You'll need to add locations for every state where you need to charge sales tax on your store's website. You can select more than one location.

Step 1Open the merchant console.

Step 2Choose Settings, and then Taxes.

Step 3Choose Edit region.

Step 4Choose Select location.

Step 5Select locations where you want to apply taxes. You can choose up to as many as necessary. Confirm selection in the dialog box. Tip: You can use the search box to quickly find the location that you need to select.

Step 6Choose Save changes.

Note: After you Confirm selection in the dialog box, your selected locations will be added to the Locations table.
 

Configure tax calculation method:

Note: For each location you add, you can configure settings for how tax should be calculated.

Step 1Open the merchant console.

Step 2Choose Settings, and then Taxes.

Step 3Choose Edit region.

Step 4Select Auto for a Location if you want Buy with Prime to automatically apply the sales tax rate that’s calculated from a third-party service provider based on each order’s information. The tax rates that are calculated include state and local jurisdiction taxes.

Step 5Enter a tax rate in the provided tax box and don’t select Auto if you want to apply a manual custom tax rate for the orders that are being shipped to addresses in that given state. The tax rate that you can manually enter can have up to 4 digits after decimal point.

Step 6Choose Save Changes.
 

Add tax category:

Note: Tax category allows you to group products that you would like to configure to follow the same unique tax rule. It’s your responsibility to understand how your products are taxed in the jurisdictions that you are responsible for collecting, filing, and remitting taxes.

Step 1Open the merchant console.

Step 2Choose Settings, and then Taxes.

Step 3After applying Taxes, choose Categories.

Step 4Choose Add tax category.

Step 5Enter the General Information details, then choose Select products.

Step 6Select products for the tax category then choose Save.

Step 7Choose Add.

Note: The tax category you've set for a product will apply to all of its variations (such as size or color).
 

Add tax category override:

Note: After you create a tax category, you need to create an override rule so that the sales tax rate that you set for the override is used for the product(s) in the tax category.

Step 1Open the merchant console.

Step 2Choose Settings, and then Taxes.

Step 3After activating Taxes, choose Edit Region.

Step 4Choose Overrides, and then Add Override. 

Step 5Enter the Override information details, then choose Add.

Step 6Choose Save changes.