5 WooCommerce Tax Plugin to Automate Sales Tax Calculations
Life is complicated! I mean, a lot more!
So, why make it even worse by messing up with the tax authorities?
As law-abiding citizens, we all know how important taxation is! But still, no doubt it’s the least fun thing to do while setting up a WooCommerce store.
But you know what, there are some WooCommerce tax plugins to do these calculations for you. Thus you don’t need to research with a pile of law books to get your taxation done.
In this post, we will review the top 5 WooCommerce Tax Plugins that can handle the tax calculation section on your behalf.
So, let’s dig in!
5 WooCommerce Tax Plugins to Automate the Taxation Process
Running a WooCommerce store isn’t a piece of cake. From product management process to business legislation management, everything should be in buttery smooth condition. Fortunately, you don’t need to worry about handling the taxation with all of these going on with your life.
Here are the top 5 best WooCommerce tax plugins to automate the entire tax maintenance process of your WooCommerce store.
1. WooCommerce Shipping & Tax
The organization behind developing WooCommerce itself develops the WooCommerce Shipping and Tax plugin. This plugin enhances both the shopping and selling experience for the sellers and shoppers. Let’s have a look at the core features of this sales tax calculations plugin.
Automated tax calculation
WooCommerce Shipping and Tax extension can collect automated tax against every purchase after enabling tax settings from the WooCommerce settings page.
To enable the tax section, proceed to the WooCommerce -> Settings section. A new tab named Tax will be available on the settings page.
Configure the WooCommerce tax settings page with the required information, and your tax will be calculated automatically from now on. Here are the available options to set up your taxes.
There are two most important settings on this page. These are –
- Tax status on Shipping rates &
- Standard rates
Consider your local tax rates while filling the standard and reduced tax rates of your WooCommerce store.
Automattic uses its own hosting service to host the information of sales tax collected from each purchase. Thus your WooCommerce store server stays lightweight, faster, and secure.
This plugin uses PayPal Express Checkout payment gateway authorization to process the payment part. It ensures the most secure payment process along with makes the transaction tracking process more accessible than ever.
Shipping label printing
You can attach USPS and DHL labels on the customers’ invoices by using this plugin/. By the way, USPS supports only U.S. domestic orders. Use DHL to send invoices globally.
If you want to create a perfect-looking invoice with tax information, give it a try to the Challan plugin. Challan can generate PDF invoices and packing slips with ease.
This plugin can reduce your tax burden for your potential customers living in 31 countries right now. They are working on adding more countries in the near future. Here’s the list of the supported countries right now.
|United States of America||Denmark||Lithuania||Finland||Poland||Latvia|
You can use WooCommerce Shipping & Tax plugin to automate the taxes for the people living in these countries. Your store location doesn’t matter as long as the customers live in those countries.
2. TaxJar – Sales Tax Automation for WooCommerce
TaxJar creates a revolution on sales tax compliance for eCommerce businesses. This cloud-based platform performs the most accurate sales tax calculations for every sales channel of an online store. Let’s take a look at some key features of TaxJar.
Accurate sales tax compliance
The TaxJar plugin automates the sales taxes by maintaining 11,000 jurisdictions all over the world. The TaxJar professional tax management system can also perform automated tax filing and prepare exportable, easy-to-read, and return-ready reports.
It also automatically submits tax reports for every product, remittance filing, and product information against each transaction. Thus, it can automatically submit sales tax returns to the states based on your store address.
Real-time tax reporting
TaxJar API instantly performs sales tax calculations for every purchase from your online store. The TaxJar API ensures almost 99.99% uptime to provide a perfect taxation solution for the users.
Economic Nexus Insights
The TaxJar professional tax management system always keeps you ahead of economic nexus insights.
Import your sales data into the TaxJar dashboard, and it will count the economic threshold for every US state. So, you don’t need to worry about the customer’s location anymore.
Now you can exempt tax from non-taxable goods of your country. Taxjar has a built-in product named Sales Tax Categories for tax exemptions. You can choose non-taxable categories from there. Besides, you can also exempt customers with valid vat numbers.
Besides all of these features, the most prominent feature of TaxJar is its support system. The TaxJar professional’s response is pretty quick and is able to solve almost all of your problems.
3. WooCommerce AvaTax by SkyVerge
The core feature of WooCommerce Avatax is sales tax calculations and tax management for the WooCommerce websites. But, this tool is able to work as a complete sales tax solution for your online store.
Here are some crucial features of the WooCommerce AvaTax plugin.
Automate sales tax calculations
The WooCommerce authority has partnered with a team of sales tax professionals at Avalara. Their prime concern is providing the most accurate sales tax rates to WooCommerce users.
Simply turn on the Avatax from your dashboard, and it will automatically start to calculate sales tax on the checkout page for every purchase.
Accurate sales tax guarantee
Avalara ensures 100% accurate VAT calculation service to their customers. Even if you face any complexity or generate wrong tax information, the Avalara authority will pay your uncollected tax. You can check their Accuracy Guarantee page to understand their condition.
Set Tax exemptions
WooCommerce AvaTax allows the users to set tax exemption individually for each user. They have added 17 different categories on that tax exemption list. The buyers will choose the most reliable option from that list.
However, if you can’t find the appropriate option on that list, choose the other option. It allows you to exempt tax for custom individuals.
AvaTax generates the sales tax by verifying the customer’s location. This plugin also maintains 12,000+ US sales and tax jurisdiction while generating tax for the customers.
By the way, AvaTax won’t calculate taxes for those customers who didn’t provide a valid billing address. Right now, it also supports latitude and longitude addresses for the US state residents.
Reliable tax calculations
If you have a paid Avalara account, you can use the Retail Pro tool for the calculation process. It sends the transaction data to AvaTax and Avatax returns tax reports after tax calculation. All of these actions happen in real time.
So, the stakeholders, customers, or other salespeople can track the price in real time. It doesn’t matter whether he purchases physical or digital goods, this plugin will add tax on each product individually.
4. WooCommerce Quaderno
Quaderno is an all-in-one WooCommerce plugin to automate the whole taxation process of your online website. This extension is packed with lots of important features to solve the taxation of an eCommerce website.
Comply with local taxes
Quaderno is compatible with the local taxes around the world. So, it doesn’t matter wherever your customers are living. You can set charge on all of them via Quaderno.
Another unique facility of Quaderno is the receipt download facility. It automatically generates credit notes and receipts in multiple languages and currencies. You can either send those to the customers or download them for yourself.
Quaderno sends automatic email notifications by attaching the invoices. You can activate this automatic invoice sending feature by following these steps –
- Login to your Quaderno account
- Proceed to the preferences page
- Select Autosend all automatic receipts and credit notes option
- Click Save changes
That’s how you can send order-based pricing invoices to your customers. However, you can also use the Challan PDF invoice generator plugin to send automatic invoices. It can efficiently send invoices to the customers after each purchase.
Quaderno notifies the users whenever they surpass the tax threshold. Even if the tax rates change within your delivery coverage area, Quaderno notifies their users. It’s really great to stay updated about the taxation changes around the world.
Note: You must use a Quaderno account to use this plugin.
You may check the following video to understand how easily you can integrate Quaderno into your WooCommerce store.
5. WooCommerce Taxamo by OPMC
WooCommerce Taxamo supports end-to-end services to calculate the most accurate sales tax based on European Union VAT rates. This plugin uses Taxamo’s API to perform the most accurate tax calculation. Here are the top features of the OPMC WooCommerce Taxamo plugin –
WooCommerce Taxamo can perform real-time tax calculation whenever a consumer purchases anything from a website. Most importantly, the complete calculation process runs in the background. So, the purchasing process won’t be interrupted.
Accurate EU VAT
This heavy hitter plugin follows the European Union VAT rates and calculates vat for each transaction. It uses six different location metadata and customers’ cart products to charge taxes.
Taxamo works well with all types of products. From digital eBooks to physical products, it can calculate vat for each product. It is compliant with the EU VAT MOSS regulations that calculate the vat based on the customer address rather than the store address.
That’s the end of our description of the WooCommerce VAT plugin. Hopefully, you will get a suitable plugin to use on your eCommerce website.
Why Do We Need to Pay Taxes?
Paying taxes to the government is a sacred duty for every citizen. Every independent government levied taxes on its citizens. This taxation process has lots of benefits in our social and personal life.
You can divide these benefits into two different benefits. These are –
- Public benefits &
- Personal benefits
Let’s shed some light on both of these.
Public benefits of paying taxes
Here are some public benefits of paying taxes –
Every government in the world offers social welfare schemes to its citizens. This scheme covers various aspects of our social life, such as education, solving food problems, managing the health sector, empowering defense sector, housing management, unemployment issues, pension schemes, etc.
You might already know that the funds for solving these problems mainly come from the vat collected from the taxpayers like you and me.
Here’s a report of World Bank data that shows the worldwide tax revenue from 2010 to 2020.
Every government has to invest a lot to develop the public infrastructure of a country. It includes but is not limited to building government institutions, public parks, planning & building smart cities, etc.
The USA National Association of State Budget Officers reports that the US federal spending is $2.2 trillion for the fiscal year 2022.
The taxpayer’s money is the major fuel behind this spending. So, keep filing your taxations regularly and keep your country’s development steady!
Every year the government spends a lot on different research centers. It includes waste management, water management, energy production, or other utilities. Being respected citizens, we must support this research by regularly paying vat.
Besides that, there are many other public benefits like empowering law enforcement, running government operations, and many others.
Personal benefits of paying taxes
Here is the list of personal benefits –
Proof of income
Once someone pays his income taxes, it works as proof of his personal income. This proof is especially mandatory for self-employed professionals, consultancy firms, freelancers, etc.
In short, if someone is not under a fixed payroll of a registered company, the income tax report will work as the legal document of his income. This proof becomes handy while doing any domestic or international financial transactions.
Loan and insurance approvals
A Tax Return Report is mandatory while applying for big loans or insurances. It could be claiming a home loan, vehicle loan, or claiming life insurances from the reputed banks or financial organizations.
If anyone wants to visit countries like the UK, USA, Canada, Australia, or similar countries, he needs to submit Income Tax Return reports to the embassy. The visa might get rejected because of inappropriate taxations.
However, returning taxes isn’t a big deal nowadays. Most of the countries support single click vat submission via their official website. So, get this opportunity and clear your vat returns.
A report of Europa shows that the European Union tax-revenue has decreased by EUR 215 billion in 2020. As the tax-revenue decreases in 2020, everyone should clear their taxation filing within the due date.
As the graph suggests, the last decrease was happened in 2009. If we don’t want to repeat the same thing in future, we must pay our excises regularly.
Nowadays, a number of countries support automatic return filing. Grab that opportunity and support your local government.
Frequently Asked Questions about tax plugin for WooCommerce
We’ve tried to answer the most commonly asked questions about WooCommerce taxes in this section. Have a look –
1. How do I add tax to WooCommerce?
There are two different methods of adding sales tax against the WooCommerce orders. These are –
- Using a third-party WooCommerce plugin
- Using the default tax settings
If you want more flexibility, accurate tax rates calculation, transactions report, etc, using the popular third-party plugins are the only option for you.
We have already described five WooCommerce sales tax plugins in the previous section. These plugins will help you with business tax filing along with payment transactions for the product or services you are selling.
However, the process is a lot easier if you use the default tax plugin. This is completely free and can be enabled within a single click. To make a customer pay his tax via the default tax plugin, follow the steps below –
- Proceed to WooCommerce -> Settings -> General
- Tick the Enable Taxes and Tax Calculations checkbox
- Click Save
The setup process is as simple as that. If you still need support for sales tax for your website, contact us via a comment box below. Remember, these services are completely free of charge! 😉
2. Does WooCommerce automatically calculate tax?
WooCommerce is able to calculate sales tax for your online store automatically. But, you have to enable the tax first to calculate sales tax automatically.
After enabling the taxes, proceed with the steps below –
- Navigate to WooCommerce -> Settings -> Tax
- Enable the Automated taxes feature and
- Save changes
This automated taxes facility will not only ease the transactions but also save time for your customers.
3. How do I collect sales tax on WooCommerce?
Collecting taxes from the WooCommerce websites isn’t a big deal. You can do it simply by enabling taxes from the WordPress dashboard.
You can either use a flat rate for every purchase or set different taxes for different cities. Follow the steps below to set checkout tax based-on the customer location.
- Navigate to WordPress Dashboard -> WooCommerce -> Settings -> Shipping
- Choose Shipping zones
- Add shipping zone
- Input Zone name, Zone regions, and Shipping methods
- Save changes
For example, I’ve added a Flat rate tax for the Asia region. You can add multiple methods to ship your products, such as Flat rate, Free pickup, etc.
In terms of location, you can set different charges for a different region, Suppose, you can charge more for European countries and reduce charges for an African city. These rates will be applicable based on the customer’s location.
4. Do I need to pay to use WooCommerce taxes?
If you use the default WooCommerce plugin, there will be no setup fees or connector fees. But, a few third-party plugins don’t have any free version. So, you have to opt for their paid version to use that.
By the way, the plugin’s price won’t cost you a fortune. Rather than that, these plugins cost only a few bucks. If a third-party plugin helps your business vat filing, please go for that. Please check the free demo before purchasing a plugin.
Managing the accounts and taxation section is a live nightmare for beginner and experienced entrepreneurs. But, you can ease that tiresome management process only by using a perfect WooCommerce tax plugin!
If you still have any confusion about these processes, please let us know in the comment section.
Solve your taxation issues by any means necessary and sleep with peace!