Automatic Taxes Overview

Automatic taxes allow you to quickly integrate sales tax calculations using either TaxJar or Avalara cloud-based tax services.

Why cloud-based tax services?

In the initial release, we have built support for two of the most popular hosted tax solutions currently available. We have chosen to use external services in our first release so that you as marketplace admins can quickly start using accurate tax rates. These rates can be defined between your vendors and customers. 

You will need to decide which of the two solutions best suits your particular needs. To help you decide, we’ve created a little overview of the two services. Our plans are to include the ability for vendors to add manual tax tables in a future release. 

TaxJar 

TaxJar provides automated sales tax calculations in more than 30 countries including the US, Canada, Australia, and the EU. We utilize the sales tax calculator SmartCalcs as the core feature. Vendors and the marketplace admin can choose to upload your marketplace orders to TaxJar to assist with your tax reporting. We have also implemented Nexus addresses allowing vendors to have multiple tax nexus configured to get accurate tax rates. Tax jar provides affordable plans that make it easy to choose the plan that’s right for you. 

Avalara 

Avalara is another popular tax service that provides various services and is focused on complex tax requirements. They provide tax services for various regions including the US, Australia, Europe, and Brazil. We are utilizing the Taxes API for automatic tax calculations between the vendors and customers. Vendors and the marketplace admin can choose to upload their orders to Avalara. To get an idea of pricing for Avalara you will need to contact them and book an appointment so that they can tailor a solution for your needs. 

Features

• Calculating sales tax automatically using cloud tax calculation services like TaxJar or Avatax.
• Uploading orders and refunds to cloud tax services for reporting and filing.
• Switching between marketplace and vendor as the seller of record.
• Support both WC Vendors Marketplace and WC Vendors Pro.
• Support TaxJar Nexus addresses.
• Cache calculation results to save API calls.

Requirements

• WordPress 5.2 or above
• WooCommerce 3.6 or above
• WC Vendors Marketplace 2.1 or above
• WooCommerce is configured as per the instructions below

WooCommerce settings

• Remove all predefined tax rules in WooCommerce > Settings > Tax.
• All product prices must be tax-excluded.

Installation

1. In WordPress, go to Plugins > Add New > Upload
2. Click Choose File and find your downloaded ZIP file
3. Activate the extension through the ‘Plugins’ menu in WordPress
4. Go to WC Vendors > Settings > Tax to configure the plugin

WordPress Admin Configuration

General

• Enable vendor tax system: Enable/disable this extension.
• Custom tax fields: Show the tax field on the WooCommerce registration form and Account setting page.
• Seller of record: Set who is responsible for sales tax on the marketplace, default to vendor.
• Active integration: this plugin requires setting up one of the available integrations before it can work for you. For now, TaxJar and Avalara are supported, and more integration will be added in the future.
• Enable logging: Log the activities of the plugin for debugging purposes. If enabled, the log can be accessed at WooCommerce > Status > Logs.

TaxJar settings

When TaxJar is active integration, a subtab for the TaxJar setting will be visible next to the General tab. Note that the tab is only visible after saving the current general setting.

• TaxJar SmartCalcs API token: the API token provided by TaxJar. This is required for the plugin to work.
• TaxJar Referral URL: You can earn commissions if vendors sign up for TaxJar through your referral link.
• Verify your Taxjar API key: Validate your TaxJar API key to ensure tax calculation works accurately.
• API verify status: Let you know your TaxJar API key is valid or not.
• Sandbox mode: Whether to use a sandbox environment for testing purposes, only available for TaxJar plus plan. More about this here.

Avalara settings

To get Avarala working, you need to set the Account ID and License key. Company Code is required if your company code is other than DEFAULT.

• Verify your Avalara API key: Validate your Avalara account information to ensure tax calculation works accurately.
• API verify status: Let you know your Avalara account information is valid or not.
• Sandbox mode: Whether to use a sandbox environment for testing purposes.

Vendor Tax Settings

Common settings

• Your tax ID: Business Tax ID to show on invoices.
• Upload order: Upload order and refund to cloud tax services for reporting.
• Disable Automatic Tax Calculation: if checked, the calculation will use the marketplace admin API credentials to calculate tax rates.

Product Settings

You can disable tax calculations for a particular product overriding the the vendor store or marketplace tax calculation settings.

With TaxJar

• TaxJar SmartCalcs API Token: This is required for uploading order and refund to TarJar.
• Nexus Address: This plugin allows vendors to list all nexus addresses right from the dashboard to calculate US Sales tax correctly.
• Verify your Taxjar API key: Validate your TaxJar API key to ensure tax calculation works accurately.
• API verify status: Let you know your TaxJar API key is valid or not.

With Avalara

• Account and License Key: Same as TaxJar, if the vendors check Upload order, we need Account ID and License Key set up to enable that feature.
• Company code: Requires if the company code is not DEFAULT.
• Verify your Avalara API key: Validate your Avalara account information to ensure tax calculation works accurately.
• API verify status: Let you know your Avalara account information is valid or not.

Get API Keys from Cloud Tax Services

Get TaxJar SmartCalc API Token

1. Login to your TaxJar Account page.
2. Click on SmartCalcs API on the left side of the screen.
3. Click the button that says “Generate API Token”.
4. Copy the token appeared.

Get Avalara Account ID and License Key

1. Go to the Avalara login page.
2. Login with your login credentials.
3. Click on the “Avalara Avatax” box when the popup appears.
4. Find your Account ID
   1. Hover on your name in the top right corner of the admin page.
   2. Copy the Account ID appears. (screenshot)
5. Find your License key
   1. Check for your license key in an email from Avalara.
   2. If you can’t find the existing license key, go to Settings > License and API Keys from the admin page in step 2.
   3. Click Generate License Key.
      A warning displays. If this is your first time setting up AvaTax Update, you can ignore the warning.
   4. Click Yes, generate a License Key.
      Avalara emails the license key and account information to account administrators. There is one license key for all systems associated with your account.
   5. Check your email to grab the license key.

Tax codes setting

To calculate tax correctly, you or your vendors need to update tax code for all existing products.

Update tax code for TaxJar

1. Go to the product edit page.
2. Scroll down and find “Product Tax category” select box.
3. Choose a product category that matches with the current product.
4. Save changes.

Update tax code for Avalara

1. Go to the product edit page.
2. Scroll down and find “Product Tax category” setting.
3. Click on the “Look up Avalara tax code” link in the description of that setting.
4. On the Tax code Look up page, search for the code that matches your product and copies it.
5. Paste the code found in step 4 to the input.
6. Save changes.

Conclusion

That’s it! You’re done configuring the WC Vendors Tax! From now, your marketplace will calculate tax automatically for you.

Troubleshooting

If you have any issues with your TaxJar or Avalara account, please contact them directly. We cannot assist you with configuring those accounts.