Create and use tax rates

Add taxes to products or services you sell by creating a tax library and applying them to your line items across deals, invoices, payment links, quotes, legacy quotes, and subscriptions. This helps increase efficiency by reducing manual data entry for users, and reduces risk of errors when applying tax rates to products or services. 

Outside the tax library, you can add one-time taxes to an invoice, payment link, or legacy quote subtotal, or automatically apply sales tax at checkout (Commerce Hub only). 

In this article, learn how to add tax rates to your tax library, and apply them to your line items.

Add a tax rate to the tax library

Before applying tax rates to your line items, you must first configure them within the tax rate library. Tax rates added to the library are available to all users. 

To add tax rates to the tax library:

1. In your HubSpot account, click the settings settings icon in the top navigation bar.
2. In the left sidebar, navigate to Objects > Products.
3. At the top, click the Tax rates tab.
4. In the upper right, click Create a tax rate.
5. In the right panel:
   • In the Internal name field, enter the name as it'll appear internally for users.
   • In the Name field, enter the name as it'll appear to customers.
   • In the Rate field, enter the rate as a percentage. Rates can have up to four decimal points.
   • Click the Tax rate status dropdown menu and select Active or Inactive. Inactive taxes won't display when selecting tax rates. Inactive taxes won’t display for selection, but will remain on quotes, deals, payment links, invoices, and subscriptions that used the tax rate.
   • Click Save.

Manage tax rates

Once created, you can edit tax rates in your tax rate library, but they can't be deleted. To stop using a tax rate, set its status to Inactive.

1. In your HubSpot account, click the settings settings icon in the top navigation bar.
2. In the left sidebar, navigate to Objects > Products.
3. At the top, click the Tax rates tab.
4. In the table, hover over a tax rate and click Actions, then select Edit.
5. In the right panel, update the tax rate details.
6. Click Save.

Add tax to a line item

1. Navigate to your quote, deal, payment link, invoice, or subscription.
   • Quotes: In your HubSpot account, navigate to Commerce > Quotes.
   • Deals: In your HubSpot account, navigate to CRM > Deals.
   • Payment links: In your HubSpot account, navigate to Commerce > Payment Links.
   • Invoices: In your HubSpot account, navigate to Commerce > Invoices.
   • Subscriptions: In your HubSpot account, navigate to Commerce > Subscriptions.
2. Add a line item to your quote, deal, payment link, invoice, or subscription.
   • Quote: learn how to add line items to quotes.
   • Deal: learn how to add line items to deals.
   • Payment link: learn how to add line items to payment links.
   • Invoice: learn how to add line items to invoices.
   • Subscription: learn how to add line items to subscriptions.
3. If the columns Tax rate and Tax amount aren’t displayed in the line item table, click Edit columns.
   • Select the Tax rate and Tax amount checkboxes. To re-order a column, click the dragHandle drag handle and move it to the desired position.
   • Click Save.

4. Click the Tax rate dropdown menu and select the tax rate you want to use for the line item. Tax amount updates automatically.
   
   
5. Under Summary, click the arrow next to Line item taxes applied to see the total amount of tax applied.
   
   
6. If adding a tax rate to a recurring line item, the tax amount will apply to the payment Due now and Future payments. Under Summary, click the arrow next to Line item taxes applied to see the recurring line item tax.
   
   

You can use the Tax amount property in other tools, including segments, reports, and workflows.

Next steps

• Learn how to set up automated sales tax collection.
• Learn how to create products.