Set up tax settings (US only)

So that users understand the exact price that they’ll have to pay for a product, you must submit the taxes that you collect. This article helps you understand how to correctly set up your tax settings. Learn more about how tax settings work and when to use them

Before you begin (US only)

Keep in mind that you’ll set up tax rates for each United States state that you charge taxes for. Typically, these are the states that your business has a physical presence in. If your products target the United States, but you don’t charge taxes in the United States, still indicate that in your tax settings.

You can choose from the following options to determine tax in each state. Consult your tax advisor to understand which options would work best for you.

  • Use the custom option to enter a flat rate if you charge all customers the same amount of tax regardless of where they're located.
  • Use the Google determined option if you charge taxes based on where your customer is located. You can indicate whether to apply the rate to all cities and counties in the state, or manually select specific cities and counties.
  • Use the tax-categories attribute if you sell products in a state with a tax rate that differs from standard sales tax rates. For example, food or apparel may not be taxed in some states or may be taxed at a lower rate than other products. Learn more about tax categories
  • Configure state, county, and city tax rates if you sell products in home rule states.
  • Use the tax attribute if you collect a non-standard tax rate for a product or a product is exempt from tax.

Instructions (US only)

Use account settings for standard tax rates

To set up taxes, you’ll set taxes for each state where you charge taxes:

  1. Sign in to your Merchant Center account.
  2. Click the Tools and settings menu , then select Sales tax.
  3. Click the Tax Settings tab.
  4. If you’re setting up taxes for the first time, you’ll see 3 options:
    • Don’t set up sales tax at account level. Select this if you charge taxes in the United States, but set up tax only through the tax attribute.
    • Don't charge sales tax for any state. Select this if you don’t charge taxes in the United States.
    • Set up sales tax for states in which you charge sales tax (Recommended). Select this if you do charge taxes in the United States. You’ll be able to add the states in which you want to collect sales tax; all other states will have zero sales tax.

Tip

If you want to switch to one of these options in the future, click Change in the upper right to see these 3 options again.

  1. Click Save.
  2. If you choose to configure tax and set up states to charge sales tax in:
    • Click Add state, and select the states where you charge tax.
    • Next set the tax rate for each state. So click a state, and then choose the Tax rate:
      • Use Google determined tax rate to let Google estimate the rate based on the location of the customer.
      • Set up custom tax rate to enter a specific rate to charge for the entire state.
    • If you select a home-rule state, select where to apply the sales tax:
      • All cities and counties within this state
        • Note: You may only use this option if you use the Google determined tax rate, which will be based on available sales tax regulations, the location of the customer, and where you select to apply it.
      • Manually select cities and counties within this state. Choose this option if you have custom tax rates for a state and don’t want Google to calculate sales tax.
        • Note: You may set up taxes by county in Alabama, Alaska, Arizona, Colorado, Idaho, and Louisiana.
    • If you charge tax on shipping, select Tax on shipping.
    • Click Save once you’ve added taxes for the state.

Set up tax categories

  1. Sign in to your Merchant Center account.
  2. Click the Tools and settings menu , then select Sales tax.
  3. Click the Tax categories tab.
  4. To add a new tax category, click the plus button .
  5. Enter the name of the tax category. Or, if you’ve already entered values into the tax_category attribute in your feed, the values will be pre-populated. Note: You may add up to 100 categories.
  6. For each state in your tax settings, enter the appropriate tax rate under the category column. If no custom rate is needed, leave this field blank.

Use an attribute for non-standard tax rates

If you have one product that has a different tax rate or that’s tax exempt, and you are unable to configure tax rates using custom or Google determined tax rates, tax categories, or home rule (individual city/county) settings, submit the tax attribute for that product. The value that you submit for the tax attribute will override any account tax settings for that product.

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