As an online retailer, keeping up with sales tax can be quite a hassle. BigCommerce is a popular e-commerce platform that offers sales tax features to help you navigate through the complexities of collecting and remitting sales tax within your state. In this article, we will explore the basics of sales tax and how to use the BigCommerce sales tax features to your advantage.
Table of Contents
Understanding Sales Tax
Sales tax is a tax imposed on the sale or rental of goods and services. Each state has its own sales tax rate which can range from 0% to over 10%. Sales tax is calculated as a percentage of the purchase price and is added to the total amount due by the customer when they check out.
It is the responsibility of the seller to collect and remit sales tax to the respective state(s). Failure to comply with sales tax regulations can result in hefty fines and legal action.
BigCommerce Sales Tax Options
BigCommerce offers several sales tax options to help merchants with their sales tax obligations. These options include:
Automatic Tax Calculation
BigCommerce offers automatic tax calculation based on your store’s shipping address and the customer’s shipping address. This feature is only available for stores based in the United States. The tax rates used to calculate the sales tax are updated regularly to ensure accuracy.
Product Tax Class
Product tax class allows store owners to assign a tax class to their products. This feature is useful for merchants who sell items that are taxed differently such as food, clothing, and digital products.
Destination-Based Sales Tax
Destination-based sales tax allows BigCommerce to calculate the appropriate sales tax based on where the item is shipped. This feature is useful for merchants who sell to customers in different states with different tax rates.
Enabling BigCommerce Sales Tax
To enable BigCommerce sales tax, you need to follow these steps:
Go to your BigCommerce Dashboard and click on "Store Setup".
Click on "Tax"
Choose your tax settings and click "Save".
Once the sales tax feature is enabled, your store will automatically calculate sales tax for each transaction based on your tax settings, including rates and tax rules.
Managing Sales Tax in BigCommerce
In BigCommerce, you can manage your sales tax by tracking sales tax collected and remitting them to the state. Here’s how you can do it:
Tracking Sales Tax Collected
Go to your BigCommerce Dashboard and click on "Analytics".
Click on "Reports"
Choose the "Financial" tab and select "Tax".
You will see an overview of your sales tax information, including the amount of sales tax collected.
Remitting Sales Tax to the State
Go to your BigCommerce Dashboard and click on "Store Setup".
Click on "Tax".
Click on "Manual Remittance".
Choose "Remit Tax" and select the amount of sales tax you want to remit.
Follow the instructions provided to complete the remittance.
Conclusion
Sales tax is an inevitable aspect of e-commerce, and BigCommerce offers sales tax features that make the process simpler. Understanding the basics of sales tax and how to use BigCommerce’s sales tax features will help you stay compliant with the law and avoid any penalties. Make sure to keep up with updates in sales tax regulations to ensure your store is always compliant.