Using TaxJar Tax automation

TaxJar automates tax calculation and provides reporting and filing functions. It takes minutes to set up. For more information go to taxjar.com

The TaxJar solution consists of two elements:

  • Creating a TaxJar account.
  • Using the TaxJar plugin.

Nexus

Sales Tax collection is based upon a connection between your business and a tax jurisdiction. This connection is a Nexus.

From a tax perspective, if your business has a presence in one or a number of States, the Tax Authority may be allowed by law, to enforce you to collect or pay Tax. 

For more detail refer to Sales Tax Nexus Defined.

Setup TaxJar

Before you begin, you’ll need an accurate list of states where you have Nexus.

1. Using this link, sign up for a TaxJar Account at taxjar.com and Login.

2. Familiarize yourself with the TaxJar’s features by reading the Documentation i.e. Getting started.

3. Retrieve the API key (SmartCalc API).

4. Add the list of states where you have Nexus (State Nexus Settings).

5. Go to Salesorder app,  SETUP > Plugins > Plugin Store >TaxJar Auto-Tax Calculator.

Click ‘Register‘ then ‘Confirm Registration‘.

Click ‘Install now‘.

6. Go to the Plugin Configuration Page > Edit > Enter API Key

7. Uncheck Live mode. Keep this unchecked until you’re happy. TaxJar is functioning correctly.

8. Next step is to create a new Tax code in the system. To create a Tax Code, go to:

ACCOUNTING > Tax > Tax Code > +

Add new tax code ‘TaxJar’ and set the ‘Tax Rate’ as 0.

9. Preset Customers profiles with TaxJar as the default Tax Code/Group. This can be achieved in two ways –

  • By Manually setting Tax Code/Group for the Customers.
  • Updating entire Customer list via Import module.

To preset Tax on Customers manually, go to:

SALES > Customers > Select a Customer > View Customer Screen > Edit > Profile tab > go to Trading Information section > Set ‘Tax Code/Group‘.

To preset Tax on entire Customer List,  use the Customer Template in the Import module.

To update Tax Code on your entire Customer List, go to:

SETUP > Import Data > Download template to  Import Customers.

Enter details in the template and then Upload Data.

10. Do a test on a Document with a Shipping Address to a State in which you have Nexus. When you save the Document, click the ‘Add Tax Button‘ to review the tax that will be applied to the irrespective State.

11. When you’re ready to go Live, go back to Step 7 (above) and set the ‘Live Mode’ to checked.

12. Test again.


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