Charging the legally appropriate amount of tax on orders is especially tricky for online sales. The right percentage to charge—if any—depends upon the customer’s country or US state, the types of products being purchased, and the order total. To help businesses dynamically calculate and apply accurate taxes in real-time, Stripe has partnered with TaxJar.
We’ve integrated the TaxJar tax calculation product directly into the Stripe Orders API. The Orders API allows users to represent their inventory and orders within Stripe, rather than on their own site or through a third-party. If you are not yet familiar with the Orders API, we recommend that you first visit the Orders API documentation before diving into tax calculations.
To enable dynamic tax calculations for your orders, simply:
After doing those two steps, you can optionally learn how Orders API tax integrations work including support for tax codes and value-added tax (VAT).
Step 1: Create your TaxJar account
If you don’t already have a TaxJar account, create one by registering at the TaxJar Sign-up Page. After creating the account and logging in, you can obtain the URL to use for Orders API tax calculations. To obtain this URL, click Accounts in the TaxJar dashboard header and then click the SmartCalcs API link in the sidebar. Click the Generate My Stripe Relay URL to get a URL for tax calculations. You will use this URL to activate TaxJar in Stripe.
Step 2: Activate TaxJar in Stripe
To activate TaxJar in your Stripe account:
- Log into your Stripe account and navigate to the Orders Settings.
- Choose Live mode under Settings, then click Change tax next to the Taxes setting.
- Choose Provider under Type and TaxJar under Provider.
- Enter your full TaxJar Stripe URL (it should start with https://taxjar:) into the TaxJar URL field in the form. (This is the URL you found on the TaxJar API page.)
- Click Update to save your credentials.
TaxJar’s integration only has a live mode, not both test and live modes like Stripe. For that reason, only TaxJar production URLs can be used to activate TaxJar in the Stripe Dashboard.
As a final step, verify your Stripe account’s legal entity address in the Dashboard’s main settings page. When calculating taxes, TaxJar uses an Origin address and a Destination address. The Origin address is set to your Stripe account’s legal entity address. The Destination address is set to the shipping address for the order.
Completing these two steps fulfills the activation process. If you would like to learn more about how the integration works, you can read the Orders API tax integration overview.