Taxes - can't live with 'em, can't live without 'em! Podia does the heavy lifting to collect order taxes. 💪

In this article, we will guide you on how you can start collecting taxes on Podia.

Once set up, sales taxes would be automatically collected during checkout for all the jurisdictions you're registered to collect taxes in.

Collecting sales taxes

Here's how to enable tax collection on Podia.

In the sidebar menu, click on Settings.
Locate the Payments settings group and click on Edit next to the Taxes option.
In the Taxes section you'll find a checkbox labeled Collect taxes. Click this to show more options and configure how you want your taxes set up. ✨

Here's where you determine your tax behavior and add the jurisdictions you're responsible for. Let's take a closer look at each one of these options below.

Tax behavior

You can select either inclusive or exclusive options for your taxes.

Let's take a look at each one of those options:

Exclusive

Exclusive tax means the purchase price doesn't include tax.

When customers check out, they'll see the tax added separately to your product price.

Example: You set a product price of $100, and taxes are 10%.

Here's the sale breakdown with exclusive tax:

Product value	$100
Tax amount	$10
Customer pays...	$110

Inclusive

Inclusive tax means the purchase price already has the tax in it.

Customers pay the price you set on Podia, which covers both the product and the tax. They won't see any price changes at checkout.

However, the amount you earn from each sale can vary based on the tax rate.

Example 1: You set a product price of $100, and taxes are 10%.

Product value	$90.91
Tax amount	$9.09
Customer pays...	$100

Example 2: You set a product price of $100, and taxes are 20%.

Product value	$83.33
Tax amount	$16.67
Customer pays...	$100

Note: This is a site-wide setting that applies to all products.

Business name & country

We will pre-fill your business name but you can change it if you operate under a different name. Be sure to select the country your business is registered in.

New jurisdiction

Adding a jurisdiction is MANDATORY in order to have your sales taxes calculated upon checkout.

A tax jurisdiction is an area subject to its own tax regulations.

To get started, click "+ New jurisdiction".
Select the jurisdiction you would like to add (where you are registered to collect taxes) and enter a valid Tax ID. A valid Tax ID is required for each location you're registering.
Once you have added all the information, click on "Add jurisdiction".
Repeat the process and add all jurisdictions you want to collect taxes in.

All tax jurisdictions supported by Quaderno are also supported here on Podia.

Quaderno offers comprehensive guides for all kinds of scenarios that you can use as a reference.

How does it impact customers?

Enabling the option to collect taxes will change a couple of things for your customers, as of now, customers who meet the jurisdictions and settings you set up will be charged based on where they are located.

Here's how it works...

Location

We calculate taxes based on the customer's location.

They are able to override their country as long as they pay with a payment method in the same country they're choosing.

Reverse charges

If a customer chooses to provide their own tax ID and a reverse charge applies we'll set the tax rate to 0%.

FAQ & Troubleshooting

Help! Taxes weren't applied to a purchase when they should have been.

We use a third-party service, Quaderno, to calculate taxes and ensure that they are assessed in accordance with your local laws.

If you believe that taxes are not being properly assessed for your customers after setting up a tax jurisdiction, then you’ll want to check for more details on your local laws and how they assess taxes, including:

Whether there is a sales threshold you have to meet before taxes are collected
Whether sales of digital goods are tax exempt in the customer’s state or region
Whether you’re using a temporary tax ID, and how that might affect tax collection

Quaderno offers comprehensive guides for all kinds of scenarios that you can use as a reference.

We recommend speaking with a financial professional for further clarification should you have more questions.

Are taxes retroactively applied?

Taxes are calculated based on the date of the payment.

If a member say, purchases a plan before taxes are added, they will be locked into that tax-free rate.

The only way to apply taxes is to have them cancel their plan and sign up again after your taxes are set up.

Does Podia remit taxes for me?

Podia doesn’t file or remit your sales taxes for you. What we do is help you collect these taxes by charging customers the correct amount upon checkout.

It would be up to you to remit these taxes based on your sales from Podia and/or any additional information you might find useful via your Stripe and/or PayPal accounts.

What are tax jurisdictions, and why do I need them?

A tax jurisdiction is an area subject to its own tax regulations. It can be a country, region, group of countries, city, county, etc.

Taxes are calculated based on your customer’s location and your registered jurisdictions. Make sure you configure your jurisdictions correctly and update these whenever you register for tax collection in other jurisdictions as well! 📝

What jurisdictions are currently supported by Podia?

Here's a list of all of the jurisdictions we currently support.

Can I set up multiple jurisdictions on Podia?

Yes! You must add a jurisdiction for each location you are registered to collect taxes in.

How do reverse charges work?

If a customer chooses to provide their own tax ID and a reverse charge applies we'll set the tax rate to 0%.

How do payment processing fees work for Inclusive taxes?

When using exclusive taxes, payment processing fees are calculated based on the product pricing. However, things work a bit differently if you’re using the inclusive tax option.

If you’re using inclusive tax, payment processing fees (Stripe/PayPal) are calculated based on the full amount, which includes both the product price and taxes.

For example: