Setting up automated tax rates in Squarespace

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Setting up automated tax rates in Squarespace

Last updated July 22, 2026 20:25

Automatically calculate sales tax, VAT and GST for your orders.

Automated tax rates apply the correct local tax rates and rules at checkout based on your business' location, your customer’s address, and where you’re registered to collect tax. With Squarespace, you can use automated tax calculations for:

• US sales tax
• EU and UK Value-Added Tax (VAT), including EU One-Stop Shop
• Goods and Services Tax (GST)

Use this guide to set up automated taxes for your store.

Automated tax features are available on the Core, Plus, Advanced, Business, Commerce Basic and Commerce Advanced plans. To learn more, visit Choosing the right Squarespace plan.

Before you begin

To get started with setting up automated taxes, complete a few steps outside Squarespace first:

• We strongly recommend consulting with a tax expert about registering your business with the tax authorities in each region where you’re required to collect taxes. Squarespace can’t help with registration, so if you're unsure where to start, consult a tax expert. You'll need to add these registrations in step 3 of the setup process.
• Check your seller accounts (like PayPal) and remove any previously added tax or shipping settings. Conflicting settings can prevent automated taxes from working correctly.

Keep in mind:

• Using product-specific tax codes overrides the standard sales tax rate from your default product tax code for the following pricing plans: Content and Memberships, Downloads, Digital products, Physical products and Service products.
• You can’t create tax exemptions for specific customers.
• Subscription products renew using the tax rate from the original order. We recalculate taxes only if you reprice a subscription.

You can switch to manual taxes at any time.

Note: Every business is different, and tax laws vary by location. You're responsible for registering with your appropriate tax authorities. Squarespace can’t help with this process or offer tax advice. You’re also responsible for ensuring your business collects, files, and pays the correct taxes. We recommend working with a professional tax advisor for specific guidance about your business and to understand your tax obligations.

Set up automated tax rates

To set up automated tax rates:

1. Check any connected seller or payment processor accounts (like PayPal), and remove any previously added tax or shipping settings. Conflicting settings can prevent automated taxes from working correctly.
2. If you use TaxJar to automatically collect taxes, disconnect TaxJar. You’ll be replacing this extension with our automated setup, so you won’t need TaxJar anymore. Automated taxes won’t work if you’re also using TaxJar. If you don’t use TaxJar, skip to the next step.
3. Open the Taxes panel.
4. Click Automated (if you don’t have taxes set up yet) or Switch to automated tax (if you’re currently using manual rates).
5. If Squarespace Payments is your payment processor, skip to Step 10.
6. Follow the prompts to add your business or individual details.
7. In the Review and confirm window, click Confirm.
8. Under Tax defaults, go to Tax address, and click Add.
9. Enter your head office tax address, and click Save.
10. Under Product tax code, click Add and click Save.
11. Select a default product tax code from the dropdown menu, click Add tax code and click Save. You can only add one default product tax code at this time.
12. Next, you’ll add tax registrations for the correct addresses/postal codes. To get started, in the Taxes panel, click Add Registrations.
13. Select the locations where you’re registered.
14. Select the registration type for each location.
15. A green Collecting message will display in the Taxes panel when the setup process is complete.

Choose how you’ll display taxes to customers (tax-inclusive pricing or separate tax amount)

Depending on your required tax setup, you can decide if customers see tax calculations at checkout or if taxes are built into product prices.

To choose if taxes appear at checkout or are built into prices:

1. Go to the Taxes panel.
2. Under Applying tax, select Add at checkout, or Include in price.

Add Product Specific Tax Codes

Product tax codes (PTCs) help apply the right sales tax rates to specific types of products. For example, one jurisdiction might charge one rate for Clothing & Footwear and a different rate for School Uniforms. After enabling automated taxes, you can assign a PTC to each product in your store to improve tax accuracy. If you don’t assign a code, we’ll apply your default tax settings instead.

To add product tax codes:

1. Open the Inventory panel.
2. Click a product to open its settings.
3. Scroll to Organization.
4. Under Product Specific Tax Code, click Search.
5. Enter a product category or browse the list of official tax codes. These codes correspond to jurisdictional tax categories and can help ensure you charge the correct rate.
6. Click the code to select it, then click Save.

Verify your product tax codes

Small differences in product descriptions can change the tax rate. If a tax rate at checkout isn't what you expect, a more specific product tax code may be required.

To confirm your product tax codes are working as expected:

1. In the Taxes panel, click Global Settings to search tax code descriptions.
2. Use specific keywords that match your product (for example, search for both “Nutritional” and “Dietary” if selling supplements). You can also reference Stripe’s full list of tax codes.
3. Apply a new code to your product
4. Run a test order on your site. During checkout, confirm the tax rate is correct for your registered location, shipping address, and product type.
5. If the rate isn't what you expect, try changing the product tax code to a similar category and test again.

Note: Assigning a product tax code overrides your store’s default product tax code for that item. Product tax codes are only available if you're using automated taxes. If you’re using manual taxes, PTCs won’t apply. If you’re unsure which code applies to your products, consult a qualified tax expert. For detailed definitions, review this documentation.

Pricing and transaction fees for automated tax rate setup

A per-transaction automated tax fee applies to orders using automated taxes. The fee is determined by your current website plan:

Each transaction fee is subject to a maximum cap based on your store's currency. For example, when your payment currency is set to USD, the maximum fee is $0.99 USD per transaction.

Use the table below to find the maximum fee in each currency:

When the transaction fee applies

The fee applies when the automated tax service calculates tax for an order. This occurs when a product has at least one PTC, and when a customer's shipping or billing address matches a location where you have an active tax registration. The fee can apply even if the calculated tax is $0.00.

This can happen for a few reasons:

• Tax holidays (US only): The transaction occurs during a state-mandated sales tax holiday.
• Thresholds: The item's value hasn't met a specific jurisdiction threshold (e.g., clothing under a certain amount in New York).
• Exempt PTCs: At least one item in the order has a PTC that's taxable in your registered location, even if other products in the cart are exempt in that jurisdiction.

When the transaction fee doesn't apply

You won’t be charged a fee for these reasons:

• No active registration: The customer's address is in a location where you don't have an active tax registration.
• Nontaxable PTCs: Every item in the cart is assigned a nontaxable product tax code.

Switch to automated tax rates

If you’re currently using manual tax rates and want to calculate taxes automatically:

1. Open the Taxes panel.
2. Under Additional tax settings, click Switch to automated tax.
3. Choose Automated.
4. Click Update.

If you prefer to enter your tax rates manually, you can switch to manual tax rates.

FAQ

Find answers to common setup questions below.

Does the automated taxes feature calculate tax exceptions for certain items?

Yes. A region may have a tax exception that prevents your store from applying tax on certain products, even when you're set up to collect it there. These tax exceptions for specific items are automatically calculated when the PTC you assign to a product tells the system that the item is exempt under specific local rules.

For example, in New York, clothing and shoes are exempt from sales tax if the item costs less than $110.00. If you tagged your product with the correct Clothing & Footwear code, we automatically apply this rule, and customers in New York won't be charged tax for that purchase.

Do changes to my store’s tax rules apply to subscription renewals?

The tax on a customer's regular renewal uses the same rate as the first order and updates only when you adjust the subscription price. If you change pricing, we recalculate taxes using your store's updated settings, and future renewals use those updated taxes. This new tax rate applies only to the current version of the updated subscription product. Keep in mind that changes to the renewal frequency or the product name won’t update the tax rate.

Do tax holidays and exemptions in the US automatically apply to my store?

Yes, automated taxes manage tax holidays and exemptions automatically, ensuring the correct rate is applied at checkout.

How does my store apply the right tax rate at checkout?

Automated taxes makes calculations in real-time using your product tax codes, pricing thresholds, business address, your customer’s shipping or billing address, and the locations where you've registered to collect taxes.

For example, if a pair of socks in your store uses Clothing & Footwear as its product tax code and a shirt uses School Uniforms, checkout applies each item’s correct rate when a customer buys both. Depending on the address they enter, customers may also see different rates for each of your registered locations.

For help understanding the rates or your tax responsibilities, consult a tax expert.

Can I charge taxes on shipping for tax-exempt products?

No. Tax on shipping follows the taxability of the items in the order. If an item is tax-exempt, tax won't apply to its portion of the shipping cost. To cover your shipping costs, you can charge a handling fee. Handling fees apply to the order total, though they won't appear as a separate tax line item at checkout.

Why didn’t my store charge sales tax?

There are a few reasons this might happen:

• You didn't complete the setup process.
• To fix this, complete the setup process again. A green Collecting message will display in the Taxes panel when the process is complete.
• The customer’s address falls outside your registered tax regions.
• To fix this, register with the proper tax authority in your area before you charge taxes. After registering with the correct tax authority, you can add registrations for that US state or country in your settings. Your store won’t charge sales tax if the customer’s address falls outside your registered tax regions. For guidance on your tax registrations, consult a tax expert.

I’m currently using TaxJar. Can I use automated taxes if I already have TaxJar connected?

No. Automated taxes and TaxJar can’t run at the same time. Switching one on switches the other off. To use automated taxes, disconnect TaxJar from your site and complete the setup process for automated taxes.

Tip: Register for our Setting up shipping and taxes for Squarespace Commerce webinar where we’ll show you how to set up tax rates and add shipping and pickup options for physical products.

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Setting up automated tax rates in Squarespace