Square POS | How to Setup Sales Taxes for Digital Products and Shipping Physical Goods

This guide is for Square Point-of-Sales users who want to modify or override the default sales tax settings for shipping and digital product sales, both domestically and internationally.

Log in to your Square account at https://app.squareup.com or use the mobile app.

Go to Settings > Payment > Sales taxes

Scroll down to the Shipping & non-physical tax overrides section > Manage settings

Choose one of the following options:

• Apply automatically generated tax rates based on your tax enrollment location

• Manually apply taxes based on the delivery destination

  • Click the Manage manual tax rates button

  • Select the Edit hyperlink > Select states

  • Choose the state(s) you want to collect sales tax in > Save

    By default, the state and local tax rates will be computed, but you may override both if necessary by selecting the Edit hyperlink.

• Do not collect taxes

• Manually apply taxes based on the destination country

  • Click the Manage international tax rates button

  • Select the Edit hyperlink > Select states

  • Choose the state(s) you want to collect sales tax in > Save

    By default, the state and local tax rates will be computed, but you may override both if necessary by selecting the Edit hyperlink.

You may optionally elect to make shipping fees exempt from tax by selecting the checkbox in the Additional settings section. This election will apply to both domestic and international shipping and digital product delivery.

Choose one of the following options:

• Additive tax - Taxes computed based on the unit price and listed as a separate line item on the receipt.

• Inclusive tax - Taxes are included in the unit price of each line item on the receipt.