Set up automated sales tax collection

Automatically calculate sales tax based on your buyer's address information, and add it to their total payment due. Below, learn how to set up automated sales tax collection.

Please note: automated tax is available for U.S. and Canadian businesses using Stripe as a payment processor, and U.S. businesses using HubSpot payments, and is powered by Stripe Tax. You should consult your legal or tax advisors to determine whether this feature meets your compliance obligations.

Set up automated sales tax collection

To set up automated sales tax collection:

1. In your HubSpot account, click the settings settings icon in the top navigation bar.
2. In the left sidebar, navigate to Payments.
3. Click the Taxes and policies tab.
4. Click Set up tax.
   
   
5. Enter your business tax address.
6. Click Next task.
   
   
7. Enter the locations where your business has a tax obligation, and is registered with the local tax authority:
   • Click Add registration.
   • Click the Select country dropdown menu and select the country. 
   • Click the Select a state dropdown menu and select a state.
   • Click the Select the registration applicable to you dropdown menu and select the applicable registration tax. Learn more about registering for sales tax.
   • Repeat the steps to add each tax registration.

8. Click Next task.

9. Click the Preset tax category dropdown menu.
10. Scroll the list, or use the search bar to search for a tax category, then select a preset tax category. Categories have been sub-categorized by Most popular and category type. Learn more about product tax categories.

11. Click Next task.

12. To use automated tax, you’ll need to add tax categories to the products in your product library:
    
    • If you don’t have products added to your product library, click the product library link to build your library first, then follow the steps below to add tax categories to your products. Click Finish setup when you are done.
    • If you have ten or less products added to your product library:
      • To set the same tax category for all of your products, click Apply to all, then click the Tax category dropdown menu and select a category to apply the same category to all products.
      • To set different tax categories for different products, click the Tax category dropdown menu next to a product and select a category. 
      • Click Finish setup.
      • Click Skip task to set the categories later.
    • If you have more than ten products added to your library, set them up via the product index page.

Add tax categories to your products

If you didn't set up your tax categories during set up (either because you chose to skip the process, or because you had more than ten products in your product library), you can add the tax categories for each product on the product index page.

It's recommended to set up categories for each of your products, so you don't have to add a tax category each time you add the line item to an invoice, quote, payment link, or subscription. 

To add tax categories for each of your products:

1. In your HubSpot account, navigate to Commerce > Products.
2. Add the Tax Category column.
3. Click the Tax category dropdown menu next to the product you want to categorize and select a category. Click Save.
4. To edit products in bulk, select the checkboxes next to the products you want to apply a category to and click Edit. In the Property to update dropdown menu select Tax category. From the Tax category dropdown menu select a category, then click Update.
5. Once your categories are set up, click Finish setup.

Add a shipping item to your product library

If you're shipping an item as part of the invoice, quote, payment link, or subscription, you need to add a line item for shipping, so automated tax is calculated correctly. To save time when creating line items, you can add your shipping options to your product library. 

To add shipping to your product library:

1. In your HubSpot account, navigate to Commerce > Products.
2. In the upper right, click Create product.
3. In the right panel, customize your product details. To customize the properties that appear, click Edit this form at the top:
   • Enter a name for your shipping (e.g., Shipping or Priority shipping).
   • Fill out the other shipping details.
   • Click the Tax category dropdown menu and select Shipping.
   • Click Create product, or Create and add another to add another product.
     
     

Turn on automated tax in your account

After setting up automated tax, you need to turn it on in your settings. To turn on automated tax:

1. In your HubSpot account, click the settings settings icon in the top navigation bar.
2. In the left sidebar menu, navigate to Payments.
3. Click the Taxes and policies tab.
4. Toggle the Calculate sales tax automatically switch on, then click Save.

A confirmation will display, confirming that automated tax has been turned on for the account.

Using automated tax

Once automated tax has been set up and turned on, tax will be applied on any newly created invoices, payment links, quotes or subscriptions, and will be viewable by users when they checkout. You'll also be able to view the amounts billed for each invoice, with and without tax on index pages. If you use QuickBooks Online and have turned on data sync, tax data will sync to QuickBooks Online, when you create invoices with automated tax in HubSpot. 

Add automated tax to invoices

To add tax categories to the line items of your invoice, and automate tax calculation:

1. In your HubSpot account, navigate to Commerce > Invoices.
2. Click Create invoice.
3. Click + Add contact to add a contact.
4. Under Billing address click Edit.
5. Add the billing address. This'll be used to determine if tax should be added to the invoice.
6. If you want to add a shipping address, under Shipping address click Edit. If a shipping address is added to the invoice, the shipping address will be used for tax instead of the billing address.
7. Add your line items.
8. If the tax category isn't set in your product library, in the Tax category column click the dropdown menu and select the tax category for each line item. You can choose different tax categories for different line items.

9. If you're shipping an item as part of the invoice, for automated tax to calculate correctly, you need to add a line item for shipping. If you haven't added shipping to your product library, you can add a custom line item:
   • In the upper right of the line items table, click Add line item, then select Create custom line item. 
   • Enter a name for your shipping (e.g., Standard shipping or Priority shipping).
   • Fill out the other shipping details.
   • Click the Tax category dropdown menu and select Shipping.
   • Click Save.
     
     

10. If you don’t want to use automated tax, toggle the Automated Sales Tax switch off in the Summary section.
11. Tax will be calculated once the invoice is created.
12. Finish setting up your invoice as required, including whether you'd like to accept online payments.
13. When the invoice is ready, click Create.

Please note: when an invoice is created with automated sales tax, the tax obligation will be recorded in Stripe. To cancel it, you can void the invoice or refund the payment.

14. A dialog box will appear with options for sending the invoice to your buyer through email. You can close the prompt by clicking the X, and send it later.
15. To view the invoice:
    • In your HubSpot account, navigate to Commerce > Invoices.
    • Locate the invoice and click the invoice number.
    • Click the Actions menu in the upper right, then click View invoice.
    • The invoice will display the automated tax for each line item, and the total tax due.

Add automated tax to quotes

To add tax categories to the line items of your quote, and automate the tax calculation:

1. In your HubSpot account, navigate to Commerce > Quotes.
2. Click Create quote.
3. Associate your quote to a new or existing deal, then click Next.
4. At the Buyer info step, a company must be selected, and it must have a valid company address. This'll be used to determine if tax should be added to the quote.
5. At the Your info step, confirm your information, then click Next.
6. At the Line items step, add your line items.
   • Make sure the Tax category column is showing in the line items table. If it isn’t, click Edit columns, use the search bar to find the Tax category column, then select the checkbox next to it and click Save.
   • If the tax category isn't set in your product library, in the Tax category column click the dropdown menu and select the tax category for each line item. You can choose different tax categories for different line items.
     
     

7. If you're shipping an item as part of the quote, for automated tax to calculate correctly, you need to add a line item for shipping. If you haven't added shipping to your product library, you can add a custom line item:
   • In the upper right of the line items table, click Add line item, then select Create custom line item. 
   • Enter a name for your shipping (e.g., Standard shipping or Priority shipping).
   • Fill out the other shipping details.
   • Click the Tax category dropdown menu and select Shipping.
   • Click Save.
     
     

8. If you don’t want to use automated tax, toggle the Automated Sales Tax switch off in the Summary section.
9. Finish building your quote. The tax amount will be calculated when you click Create at the Review step.
10. A dialog box will appear with options for sending the invoice to your buyer through email. You can close the prompt by clicking the X, and send it later.
11. To view the quote:
    • In your HubSpot account, navigate to Commerce > Quotes.
    • Locate the quote and click the quote name.
    • The quote will display the automated tax for each line item, and the total tax due.

Add automated tax to payment links

To add tax categories to the line items of your payment link, and automate the tax calculation:

1. In your HubSpot account, navigate to Commerce > Payment Links.
2. Click Create payment link.
3. Add your line items.
   • Make sure the Tax category column is showing in the line items table. If it isn’t, click Edit columns, use the search bar to find the Tax category column, then select the checkbox next to it and click Save.
   • If the tax category isn't set in your product library, in the Tax category column click the dropdown menu and select the tax category for each line item. You can choose different tax categories for different line items.

4. If you're shipping an item as part of the payment link, for automated tax to calculate correctly, you need to add a line item for shipping. If you haven't added shipping to your product library, you can add a custom line item:
   • In the upper right of the line items table, click Add line item, then select Create custom line item. 
   • Enter a name for your shipping (e.g., Standard shipping or Priority shipping).
   • Fill out the other shipping details.
   • Click the Tax category dropdown menu and select Shipping.
   • Click Save.
     
     

5. If you don’t want to use automated tax, toggle the Automated Sales Tax switch off in the Summary section.
6. Finish setting up your payment link.
7. Tax will be calculated when the buyer goes through the checkout process, and is calculated based on the address details entered during checkout.

Please note: discount codes can't be added to payment links that have automated sales tax turned on.

Add automated tax to new subscriptions

To add tax categories to the line items of your subscription, and automate the tax calculation:

1. In your HubSpot account, navigate to Commerce > Subscriptions.
2. Click Create subscription.
3. Select Send a recurring invoice.
4. Click + Add contact to add a contact.
5. By default, the company address will be used to determine if tax should be added to the subscription. To change to the billing address, under Billing address, uncheck the Same as company address checkbox, click Edit, and enter the address details in the right panel.
6. Add your line items.
   • Make sure the Tax category column is showing in the line items table. If it isn’t, click Edit columns, use the search bar to find the Tax category column, then select the checkbox next to it and click Save.
   • If the tax category isn't set in your product library, in the Tax category column click the dropdown menu and select the tax category for each line item. You can choose different tax categories for different line items.

7. If you're shipping an item as part of the quote, for automated tax to calculate correctly, you need to add a line item for shipping. If you haven't added shipping to your product library, you can add a custom line item:
   • In the upper right of the line items table, click Add line item, then select Create custom line item. 
   • Enter a name for your shipping (e.g., Standard shipping or Priority shipping).
   • Fill out the other shipping details.
   • Click the Tax category dropdown menu and select Shipping.
   • Click Save.
     
     

8. If you don’t want to use automated tax, toggle the Automated Sales Tax switch off in the Summary section.
9. Finish setting up your subscription, including whether you'd like to accept online payments.
10. When the subscription is ready, click Create. Tax will be calculated once the subscription is created, and then on each subscription payment date in the future, so any future tax rate changes are considered.

Add automated tax to existing subscriptions

To add tax categories to the line items when updating a subscription, and automate the tax calculation:

1. In your HubSpot account, navigate to Commerce > Subscriptions.
2. Click on the subscription.
3. In the upper right, click Actions, then select Edit subscription.
4. By default, the company address will be used to determine if tax should be added to the subscription. To change to the billing address, under Billing address, uncheck the Same as company address checkbox, click Edit, and enter the address details in the right panel.
5. Add or edit your line items.
   • Make sure the Tax category column is showing in the line items table. If it isn’t, click Edit columns, use the search bar to find the Tax category column, then select the checkbox next to it and click Save.
   • If the tax category isn't set in your product library, in the Tax category column click the dropdown menu and select the tax category for each line item. You can choose different tax categories for different line items.

6. If you're shipping an item as part of the subscription, for automated tax to calculate correctly, you need to add a line item for shipping. If you haven't added shipping to your product library, you can add a custom line item:
   • In the upper right of the line items table, click Add line item, then select Create custom line item. 
   • Enter a name for your shipping (e.g., Standard shipping or Priority shipping).
   • Fill out the other shipping details.
   • Click the Tax category dropdown menu and select Shipping.
   • Click Save.
     
     

7. Toggle the Automated Sales Tax switch on in the Summary section.
8. Click Save.
9. The new payment details, including tax amounts, will be shown in the dialog box. Click Update subscription to confirm the changes.
10. Tax will then be calculated on each subscription payment date in the future, so any future tax rate changes are considered.

Sync automated tax data with QuickBooks Online

With QuickBooks Online data sync, you can sync automated tax data from HubSpot to QuickBooks Online when creating invoices with automated tax in HubSpot. This ensures that your tax information is consistent across both platforms, simplifying your accounting processes. 

To sync automated tax data with QuickBooks Online: 

1. Create your invoice with automated tax. 
2. When the invoice is ready, click Create. 
3. The QuickBooks Online integration will detect the new invoice and check the invoice details against any filters set up. If eligible, it'll sync the invoice to QuickBooks Online. The automated tax will sync as a new line item in the QuickBooks Online invoice.

When automated tax data is synced from HubSpot to QuickBooks Online for the first time, a new HubSpot Sales Tax Payable service will be created in QuickBooks Online automatically. 

The following fields will also be created automatically for the HubSpot Sales Tax Payable service in QuickBooks: 

• Description: this field will include the description of the service, when the invoice in HubSpot includes automated tax. 
• Sales price/rate: this field will be set to 0.00. 
• Income account: this field will be set to HubSpot Sales Tax Account. 

Buyer checkout experience

Buyer checkout experience for invoices, quotes, or subscriptions

If you turned on online payments for invoices, quotes, or subscriptions, the buyer can pay directly from the invoice, quote, or subscription by clicking Pay now.

On the checkout page, the line items of the invoice, quote, or subscription will display, with the amount of tax due per line item, and in total. The total amount due will include taxes.

Buyer checkout experience for payment links

For payment links, when the buyer reaches checkout, the auotmated tax calculation will display once they enter their address details.

The line items of the payment link will display, with the amount of tax due per line item, and in total. The total amount due will include taxes.

Update tax settings

To update your tax address, tax registrations, or preset tax categories:

1. In your HubSpot account, click the settings settings icon in the top navigation bar.
2. In the left sidebar, navigate to Payments.
3. Click the Taxes and policies tab.
4. Click Manage tax settings.

5. Click the arrow next to Tax address, Tax registrations, or Preset tax category.
6. Update your tax settings, then click Save.

Turn off automated sales tax

To turn off automated sales tax collection:

1. In your HubSpot account, click the settings settings icon in the top navigation bar.
2. In the left sidebar, navigate to Payments.
3. Click the Taxes and policies tab.
4. Toggle the Calculate sales tax automatically switch off, then click Save.

Viewing taxes applied to invoices

1. In your HubSpot account, navigate to Commerce > Invoices.
2. If you can’t see the tax columns on your index page, add the Amount billed (pre-tax), Taxes total and Automated taxes on columns using these steps.
3. The tax columns will populate with the tax information of the invoice. 
4. These properties can be used as filters in lists and workflows.
5. You can also view the taxes for individual line items by clicking the invoice number and scrolling to the Line Items section of the invoice.

Filing and reporting on taxes

HubSpot payments

1. To file your taxes, follow these steps. 
2. To report on your taxes:
   • In your HubSpot account, click the settings settings icon in the top navigation bar.
   • In the left sidebar, navigate to Payments.
   • On the Setup tab, click the Taxes and policies tab.
   • Click Export tax reports.
   • Click the File format dropdown menu and select a file format.
   • Under Date select the from and to dates you'd like tax reporting for.
   • Select the Exclude non-taxable transactions checkbox to exclude any transactions that don't have automated tax applied to them. 
   • Click Export.
   • When the export is ready, you'll receive an email, and an in-app HubSpot notification. Click the notification, or link in your email to download the file.

• • The exported CSV includes:
    • Invoice ID.
    • Invoice number.
    • Line item ID.
    • Transaction date.
    • Tax date.
    • Origin country and state.
    • Destination country and state.
    • Country and state code.
    • Tax jurisdiction name, and level.
    • Customer tax ID.
    • Quantity.
    • Tax code.
    • Tax rate.
    • Tax reason.
    • Taxability reason.
    • Tax name.
    • Currency.
    • Subtotal.
    • Taxable amount.
    • Non-taxable amount.
    • Tax amount.
    • Total amount.
    • Filing currency.
    • Filing exchange rate.
    • Filing taxable amount.
    • Filing non-taxable amount.
    • Filing tax amount.
    • Filing total.

Please note: taxes on non-purchased quotes aren’t included in tax reporting. Purchased quotes will have an associated invoice, which is recorded in tax reporting.

Stripe as a payment processing option

• To file your taxes, follow these steps. 
• To report on your taxes, follow these steps.