Handling Tax with TaxJar on Squarespace
TL;DR:
- TaxJar works with Squarespace to automate US sales tax calculations and filing
- You need specific paid plans on both platforms to access different features
- Once connected, TaxJar replaces Squarespace's built-in tax system completely
- The integration only works for US-based sellers and US tax obligations
- You can disconnect TaxJar anytime to return to Squarespace's native tax features
TaxJar helps US-based Squarespace sellers handle sales tax calculations and filing automatically. The service integrates directly with your Squarespace store, but you'll need to understand which features you actually need before setting it up.
Choosing Your TaxJar Setup
What TaxJar Does
TaxJar offers two main features: automated tax rate calculations during checkout and detailed reporting for tax filing. You don't have to use both – pick what fits your business.
Plan Requirements
Here's what you need for each feature:
Automated Tax Calculations: Any paid TaxJar plan plus a Squarespace Commerce plan (Basic, Advanced, or Commerce Advanced)
Sales Tax Filing and Reporting: Any paid TaxJar plan plus any Squarespace Commerce plan
Both Features: TaxJar's Professional plan plus any Squarespace Commerce plan
Check your current Squarespace plan before connecting TaxJar. If you're on a lower-tier plan, you'll need to upgrade first.
Setting Up TaxJar Integration
Getting Connected
- Go to your Squarespace dashboard and find the Extensions panel
- Look for TaxJar and click to connect
- Create a TaxJar account or sign in if you already have one
- Fill in your business details in TaxJar
- Add all the states where you need to collect sales tax
Important Change
Once TaxJar connects, Squarespace's automated tax features stop working. Your tax settings become US-only and run entirely through TaxJar.
Configuring Your Tax Settings
Adding State Registrations
Go to your TaxJar dashboard and add every state where you have tax obligations. Don't forget to enable TaxJar's API for each state – this ensures accurate tax calculations.
Product Tax Categories
If your products need different tax rates, you can set specific tax categories for each product. This happens in your Squarespace product settings after TaxJar is connected.
If you're not sure which tax category fits a particular product, ask a tax advisor. Getting this wrong can cause problems later.
Handling Setup Warnings
TaxJar will show an "incomplete setup" warning if you haven't registered all necessary states. Add the missing states to clear this warning.
Disconnecting TaxJar
Going Back to Squarespace Tax
If you want to stop using TaxJar:
- Open the Taxes panel in your Squarespace dashboard
- Click "Disconnect TaxJar"
- Re-enable Squarespace's automated taxes
Potential Issues
Sometimes tax rates from TaxJar stick around for existing subscriptions. If customers have ongoing subscriptions with the old rates, you might need to cancel and recreate those subscriptions to apply new tax settings.
FAQs
Can I switch back to Squarespace's tax system after using TaxJar?
Yes. Disconnect TaxJar from your Taxes panel, then turn Squarespace's automated taxes back on.
What does the "incomplete setup" warning mean?
You haven't registered all the states where you need to collect tax. Add the missing states in your TaxJar dashboard.
Where do I get help with tax rates or calculations?
Contact TaxJar support directly. They handle all the tax rate data and calculations.
Do I need TaxJar if I only sell in one state?
Not necessarily. Squarespace's built-in tax features might be enough for simple, single-state sales.
Jargon Buster
Nexus: The legal requirement to collect sales tax in a state where you have significant business presence or sales volume.
API: Application Programming Interface – the connection that lets TaxJar and Squarespace share tax information automatically.
Tax Categories: Different product classifications that affect which tax rate applies to specific items.
Wrap-up
TaxJar simplifies US sales tax for Squarespace stores, but it's not a set-and-forget solution. You need to maintain your state registrations and keep your product categories up to date. The integration works well once configured properly, but remember that it completely replaces Squarespace's tax system.
Consider talking to a tax professional about your specific obligations before setting up any automated tax system. They can help you understand which states you need to register in and whether TaxJar's features match your business needs.
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