Set up your taxes and shipping in Ontraport so you can accurately charge your customers – and send them their goodies.
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Feature updates: You can now auto-generate taxes based on product type and location using our TaxJar integration.
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Taxes + shipping
Course Instructor
- How to figure out if you need to collect tax -- and when
- The roles of your product and location (yours and your customers’) in taxes
- How to add conditions to charge customers appropriately depending upon where they live
- How to add shipping conditions to your order forms
- Where to access your shipping collected report to check your work
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Transcript
In this video, I’ll talk about how to charge for tax and shipping using Ontraport. I’m lumping these two features into the same video because the setup process for them is similar.
I’ll start with taxes. There are four steps:
First, determine if you need to charge tax. Second, add taxes onto either a manual order or an order form. Third, set up your tax conditions, and wrap up by viewing everything in your taxes collected report.
Here we go!
The first thing to do is determine if you even collect tax, and when. After that, finding the rate is pretty easy.
I recognize that Ontraport has lots of customers from all over the world. A quick heads up: even though this video uses examples based on the US tax system, clients around the world can absolutely use these tax and shipping features in Ontraport without any problems.
Also, keep in mind that tax laws and rates are changing just about every three seconds. As your business grows, the situations where you collect tax are also bound to change. As a business owner, it’s always your responsibility to make sure you’re doing your research about tax laws in your area and for your business model.
All that is to say — I’ll start by going over the general situations when tax is required and when it isn’t. Then I’ll explain how to get the right rate. But make sure you’re doing your own research too.
Okay, phew, disclaimer over. Let’s jump in.
When you’re figuring out whether or not to charge taxes, there are three major factors to think about:
First, your product. You may or may not need to tax your product, depending on what you sell. For example, most physical products in most states require a sales tax. But services are more variable.
Number two is your location. Depending on where your business is located, you may need to pay taxes based on that state’s laws.
Your sales tax will likely differ depending on your location. For example — here in California, the sales tax rate is currently 7.25 percent. Meanwhile, Colorado’s sales tax rate is only 2.9%. And in Delaware, there’s no sales tax at all. So you want to find out your area’s tax requirements first.
The third major factor is to consider your customer’s location. Then, based on your own location, you also need to find out if your state does destination or origin based tax collection.
I’ll break that down. Destination means taxes are determined by the customer’s location. Origin means taxes are based on your business’s location.
Remember, this is a very brief overview of a pretty complicated topic. And everything is different outside the U.S. So definitely read up on your local tax laws and make sure you’re charging the right amount. Don’t skip this part!
Okay, now that you’ve decided whether you’re going to charge taxes — I’m going to show you how to do it on an order form. You can use these exact same settings when you log a manual transaction as well.
First, think about this scenario:
I’m a business owner in East Los Angeles. I sell physical things, so my products are taxable.
So I need my order form to charge customers who live in California the East LA sales tax — 9.5 percent. But if my customer is in another state, I don’t want to charge any sales tax.
I’m going to show you how to create a new tax type on your order form. But you can also get to your tax type collection by going to Sales, then settings, then Taxes.
Alright. Go to your order form’s product settings. You can get to those here.
Now click here to add a product to your form. Toggle Tax on and click Add right here in the Tax section. Then click New Tax Type. Add something here for the Tax Type Name — I’ll add “East LA.” Now add your Tax Rate — mine’s 9.5 percent. Now hit Save.
Great! But I’m not quite done yet. Right now, this 9.5 percent sales tax will apply to all my customers, no matter where they’re coming from. But according to California tax law — as far as I understand it, always remembering that I am not your lawyer or accountant — only my California customers need to pay this.
Which means it’s time to move on to Step 3!
Now that I’ve added my tax rate, I’m going to click Add right here under the conditions column. Go ahead and add a new condition.
I’m going to add the condition, “State is equal to California.” Then Save.
Now, when my customers buy my product from this order form, everyone from California will be charged 9.5 percent. Meanwhile, none of my out-of-state customers will pay that California sales tax.
Just for fun, let’s take this one level deeper so you can see how to add more than one tax rate and conditions.
Say I have another location in Tucson, Arizona. I’d need to add a tax rate of 8.7 percent, along with a condition to only charge this rate for customers in Arizona.
To do that, I’ll click this add button and create a new tax type. I’ll add Tucson, Arizona and 8.7 percent, then save.
Now click Add under conditions to add the condition “State equal to Arizona.”
Nice! Now this order form will charge different rates for customers in California and Arizona, and it won’t charge anything for customers in other states.
Ok! Let’s move on to our final step: using your taxes collected report.
Start by going to Sales, then Reports, then Tax Collected. You can find lots of information here about the transactions you’ve collected taxes on.
This Paid column will show you how much tax you collected. You can find the total up here at the top. And in this Tax Name column, you can see which tax rate you charged.
You can click here to change your date range. Maybe you want to see just the sales from yesterday, or maybe everything from the last month. You get the idea.
Then you can just click this checkbox, select All in Group, click export and boom! You’ve got a downloaded CSV file of your tax report. Not too shabby.
Okay, so there’s your overview of how to handle taxes using Ontraport. I know it was a lot of information — take a second to stand up, do a few jumping jacks, whatever you need to reset.
Now let’s switch gears and talk about shipping. Again this happens in three steps.
First, you’ll add shipping to an order. Next, you add shipping conditions to your order forms, customize your shipping settings, and use your shipping collected report to document it all.
These settings work just like taxes did. But of course, the purpose of this feature is to cover your shipping costs on physical products — which means we’re officially done dealing with boring tax stuff. Feels good, doesn't it?
Your shipping rates will depend on the service provider you use, the weight of your packages and where your customers are. If you charge a flat rate, you can simply create a shipping rate and add it to your order form. Easy.
But if you want to charge different rates based on location, you can set up conditions based on where your customers live — just like we did with taxes.
I’ll show you how it’s done.
You’ll start by adding shipping to your order.
Just like taxes, you can set this up in two ways: on your order form or when you log manual transactions.
I’ll walk you through the process from an order form, but you can also go to Sales, then Settings, then Shipping Methods to do the same thing.
Start by hovering over this product. Click the Add to Shipping and Packing slip option here. Then, toggle Ship on.
This next part will be short and sweet, since you already know how it all works.
I'll start with a simple example. Say I’m shipping from the U.S., and I charge a flat rate of $12 for all U.S. states, but I’m charging a little more for international shipments — let’s say $25.
Let’s do it:
First, click this Add button to add a new shipping type. Then I’ll add in the name of my shipping type— U.S. Shipping. That price was $12.
Now I’ll add my second shipping method for international customers. I do that here, the same way. Add the shipping type name — International Shipping — and the price of $25.
Great! Now we’re ready to add some conditions.
I’ll start with U.S. shipping. Click here to add the condition, “Country is equal to United States,” then save. Nice.
Now I’ll add a condition for international shipping. This one will be, “Country is NOT equal to United States.” Save.
Easy, right? You’re basically a pro at this point. Let’s move on to your shipping settings.
When I toggled on shipping earlier, the “Tax on Shipping” option popped up. This happens because some states require you to charge tax on shipping while others don’t. So if you’re selling from one of those states that does tax shipping costs, toggle this on.
There’s another setting that shows up here for recurring payments, like subscriptions or payment plans — Charge shipping each time on recurring orders.
I’m turning this product into a subscription. You can see this toggle appear under the shipping section. So if you sell physical subscriptions in a state that charges tax on shipping, turn this on!
If you need any more details on how to ship products, check out our section on “Fulfilling physical orders.”
Alright, last step! You also have a shipping collected report, and it works a lot like the taxes collected report. I’ll show you how to use it.
You’ll find your shipping collected report here, with the rest of your Sales reports.
This report helps you sort out your shipping charges. You can organize it all by contact or by shipping name, like this. Click here to choose your timeframe. You’ll use this data to consolidate your records or figure out if you need to change your shipping rates. And you can always download a CSV file to keep for your records, just like you did for your taxes collected report.
Phew — that was a lot of information! Let’s review what you just learned.
You know how to create new tax rates with specific conditions so you’re always charging the right rate. And you know how to use your taxes collected report.
AND you know all the same things about shipping. You’re ready to create shipping rates and charge different rates based on where you’re sending your product.
All this will make it easier for you to collect taxes on your taxable products and ship out your physical items — which can be pretty essential to doing business.
Grab a fresh cup of coffee, stretch your legs and reward yourself for taking the time to learn this stuff. Coming up we’ll talk about creating order forms.
I’ll start with taxes. There are four steps:
First, determine if you need to charge tax. Second, add taxes onto either a manual order or an order form. Third, set up your tax conditions, and wrap up by viewing everything in your taxes collected report.
Here we go!
The first thing to do is determine if you even collect tax, and when. After that, finding the rate is pretty easy.
I recognize that Ontraport has lots of customers from all over the world. A quick heads up: even though this video uses examples based on the US tax system, clients around the world can absolutely use these tax and shipping features in Ontraport without any problems.
Also, keep in mind that tax laws and rates are changing just about every three seconds. As your business grows, the situations where you collect tax are also bound to change. As a business owner, it’s always your responsibility to make sure you’re doing your research about tax laws in your area and for your business model.
All that is to say — I’ll start by going over the general situations when tax is required and when it isn’t. Then I’ll explain how to get the right rate. But make sure you’re doing your own research too.
Okay, phew, disclaimer over. Let’s jump in.
When you’re figuring out whether or not to charge taxes, there are three major factors to think about:
First, your product. You may or may not need to tax your product, depending on what you sell. For example, most physical products in most states require a sales tax. But services are more variable.
Number two is your location. Depending on where your business is located, you may need to pay taxes based on that state’s laws.
Your sales tax will likely differ depending on your location. For example — here in California, the sales tax rate is currently 7.25 percent. Meanwhile, Colorado’s sales tax rate is only 2.9%. And in Delaware, there’s no sales tax at all. So you want to find out your area’s tax requirements first.
The third major factor is to consider your customer’s location. Then, based on your own location, you also need to find out if your state does destination or origin based tax collection.
I’ll break that down. Destination means taxes are determined by the customer’s location. Origin means taxes are based on your business’s location.
Remember, this is a very brief overview of a pretty complicated topic. And everything is different outside the U.S. So definitely read up on your local tax laws and make sure you’re charging the right amount. Don’t skip this part!
Okay, now that you’ve decided whether you’re going to charge taxes — I’m going to show you how to do it on an order form. You can use these exact same settings when you log a manual transaction as well.
First, think about this scenario:
I’m a business owner in East Los Angeles. I sell physical things, so my products are taxable.
So I need my order form to charge customers who live in California the East LA sales tax — 9.5 percent. But if my customer is in another state, I don’t want to charge any sales tax.
I’m going to show you how to create a new tax type on your order form. But you can also get to your tax type collection by going to Sales, then settings, then Taxes.
Alright. Go to your order form’s product settings. You can get to those here.
Now click here to add a product to your form. Toggle Tax on and click Add right here in the Tax section. Then click New Tax Type. Add something here for the Tax Type Name — I’ll add “East LA.” Now add your Tax Rate — mine’s 9.5 percent. Now hit Save.
Great! But I’m not quite done yet. Right now, this 9.5 percent sales tax will apply to all my customers, no matter where they’re coming from. But according to California tax law — as far as I understand it, always remembering that I am not your lawyer or accountant — only my California customers need to pay this.
Which means it’s time to move on to Step 3!
Now that I’ve added my tax rate, I’m going to click Add right here under the conditions column. Go ahead and add a new condition.
I’m going to add the condition, “State is equal to California.” Then Save.
Now, when my customers buy my product from this order form, everyone from California will be charged 9.5 percent. Meanwhile, none of my out-of-state customers will pay that California sales tax.
Just for fun, let’s take this one level deeper so you can see how to add more than one tax rate and conditions.
Say I have another location in Tucson, Arizona. I’d need to add a tax rate of 8.7 percent, along with a condition to only charge this rate for customers in Arizona.
To do that, I’ll click this add button and create a new tax type. I’ll add Tucson, Arizona and 8.7 percent, then save.
Now click Add under conditions to add the condition “State equal to Arizona.”
Nice! Now this order form will charge different rates for customers in California and Arizona, and it won’t charge anything for customers in other states.
Ok! Let’s move on to our final step: using your taxes collected report.
Start by going to Sales, then Reports, then Tax Collected. You can find lots of information here about the transactions you’ve collected taxes on.
This Paid column will show you how much tax you collected. You can find the total up here at the top. And in this Tax Name column, you can see which tax rate you charged.
You can click here to change your date range. Maybe you want to see just the sales from yesterday, or maybe everything from the last month. You get the idea.
Then you can just click this checkbox, select All in Group, click export and boom! You’ve got a downloaded CSV file of your tax report. Not too shabby.
Okay, so there’s your overview of how to handle taxes using Ontraport. I know it was a lot of information — take a second to stand up, do a few jumping jacks, whatever you need to reset.
Now let’s switch gears and talk about shipping. Again this happens in three steps.
First, you’ll add shipping to an order. Next, you add shipping conditions to your order forms, customize your shipping settings, and use your shipping collected report to document it all.
These settings work just like taxes did. But of course, the purpose of this feature is to cover your shipping costs on physical products — which means we’re officially done dealing with boring tax stuff. Feels good, doesn't it?
Your shipping rates will depend on the service provider you use, the weight of your packages and where your customers are. If you charge a flat rate, you can simply create a shipping rate and add it to your order form. Easy.
But if you want to charge different rates based on location, you can set up conditions based on where your customers live — just like we did with taxes.
I’ll show you how it’s done.
You’ll start by adding shipping to your order.
Just like taxes, you can set this up in two ways: on your order form or when you log manual transactions.
I’ll walk you through the process from an order form, but you can also go to Sales, then Settings, then Shipping Methods to do the same thing.
Start by hovering over this product. Click the Add to Shipping and Packing slip option here. Then, toggle Ship on.
This next part will be short and sweet, since you already know how it all works.
I'll start with a simple example. Say I’m shipping from the U.S., and I charge a flat rate of $12 for all U.S. states, but I’m charging a little more for international shipments — let’s say $25.
Let’s do it:
First, click this Add button to add a new shipping type. Then I’ll add in the name of my shipping type— U.S. Shipping. That price was $12.
Now I’ll add my second shipping method for international customers. I do that here, the same way. Add the shipping type name — International Shipping — and the price of $25.
Great! Now we’re ready to add some conditions.
I’ll start with U.S. shipping. Click here to add the condition, “Country is equal to United States,” then save. Nice.
Now I’ll add a condition for international shipping. This one will be, “Country is NOT equal to United States.” Save.
Easy, right? You’re basically a pro at this point. Let’s move on to your shipping settings.
When I toggled on shipping earlier, the “Tax on Shipping” option popped up. This happens because some states require you to charge tax on shipping while others don’t. So if you’re selling from one of those states that does tax shipping costs, toggle this on.
There’s another setting that shows up here for recurring payments, like subscriptions or payment plans — Charge shipping each time on recurring orders.
I’m turning this product into a subscription. You can see this toggle appear under the shipping section. So if you sell physical subscriptions in a state that charges tax on shipping, turn this on!
If you need any more details on how to ship products, check out our section on “Fulfilling physical orders.”
Alright, last step! You also have a shipping collected report, and it works a lot like the taxes collected report. I’ll show you how to use it.
You’ll find your shipping collected report here, with the rest of your Sales reports.
This report helps you sort out your shipping charges. You can organize it all by contact or by shipping name, like this. Click here to choose your timeframe. You’ll use this data to consolidate your records or figure out if you need to change your shipping rates. And you can always download a CSV file to keep for your records, just like you did for your taxes collected report.
Phew — that was a lot of information! Let’s review what you just learned.
You know how to create new tax rates with specific conditions so you’re always charging the right rate. And you know how to use your taxes collected report.
AND you know all the same things about shipping. You’re ready to create shipping rates and charge different rates based on where you’re sending your product.
All this will make it easier for you to collect taxes on your taxable products and ship out your physical items — which can be pretty essential to doing business.
Grab a fresh cup of coffee, stretch your legs and reward yourself for taking the time to learn this stuff. Coming up we’ll talk about creating order forms.
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