CartOS includes built-in sales tax calculation for US orders. Tax rates are determined at the zip code level using data from Avalara, updated monthly. This gives you accurate, location-specific tax rates without needing to set up or maintain rate tables yourself.
How tax calculation works
When a customer enters their shipping address at checkout, CartOS looks up the applicable tax rate based on their zip code. This rate includes state, county, city, and special district taxes combined into a single rate that's applied to taxable items in the order.
Tax rates vary significantly by location—even within the same state or city. Zip code level calculation ensures customers are charged the correct rate for their specific location rather than a blanket state rate.
Enabling tax collection
Go to Settings › Taxes to configure tax collection. Enable Collect Sales Tax to start charging tax on orders.
You'll need to specify which states you have tax obligations in—typically states where you have nexus (a physical presence or significant economic activity). Check the states where you're required to collect tax, and CartOS will calculate and collect tax for orders shipped to those states.
Orders shipped to states you haven't enabled won't have tax applied, even if those states have sales tax. It's your responsibility to determine where you have nexus and enable the appropriate states.
Tax data source
CartOS uses tax rate data from Avalara, a leading provider of tax compliance data. Rates are updated monthly to reflect changes in state, county, city, and district tax rates across the United States.
We believe this data to be accurate, but CartOS makes no representations or warranties regarding the accuracy or completeness of tax rates. Tax laws change frequently, and while monthly updates capture most changes, there may be brief periods where new rates aren't yet reflected.
Product tax settings
By default, all products are treated as taxable. If you sell items that are tax-exempt in certain jurisdictions—like groceries, clothing, or medical supplies—you can mark individual products as tax-exempt in the product editor.
Note that tax exemptions vary by state. A product exempt in one state may be taxable in another. CartOS's basic tax settings apply exemptions universally. For complex scenarios with product-specific exemptions that vary by jurisdiction, consider a dedicated tax service integration.
Shipping tax
Some states require tax on shipping charges while others don't. In Settings › Taxes, you can enable or disable tax on shipping. When enabled, shipping charges are taxed at the same rate as the products in the order for states that tax shipping.
Displaying tax at checkout
Tax is calculated and displayed during checkout once the customer enters their shipping address. The tax amount appears as a separate line item so customers see exactly what they're being charged.
If you prefer to show tax-inclusive pricing (where displayed prices already include tax), you can enable this in your tax settings. This is less common in the US but may be preferred for certain businesses.
Sales Tax Collected report
CartOS provides a Sales Tax Collected report in Quick Actions › Reports. This report shows tax collected broken down by state, giving you the information you need for filing.
The report includes total taxable sales and total tax collected for each state during the selected period. You can filter by date range and export to CSV for your records or to share with your accountant.
Important disclaimer
The Sales Tax Collected report shows what was actually collected from customers—it does not necessarily reflect what you owe to tax authorities. Differences can occur due to exemptions, rate changes, refunds, and other factors.
CartOS is not a tax advisor and cannot determine your actual tax liability. We strongly recommend working with a qualified tax professional who can review your specific situation, ensure you're collecting correctly, and handle filing and remittance to the appropriate tax authorities.
Tax exemptions for customers
Some customers—like resellers, nonprofits, or government agencies—may be exempt from sales tax. If a customer provides a valid exemption certificate, you can mark their account as tax-exempt in their customer profile.
When a tax-exempt customer checks out while logged in, tax won't be applied to their order. Keep exemption certificates on file in case of audit.
Refunds and tax
When you issue a refund in CartOS, the tax portion of the refund is calculated automatically. Full refunds return the full tax amount; partial refunds return tax proportional to the refunded items.
Refunded tax should be accounted for in your tax filings. The Sales Tax Collected report shows net tax collected (collections minus refunds) for accurate reporting.
International tax
CartOS's built-in tax calculation covers US sales tax. For international orders—VAT in Europe, GST in Australia, or other international tax regimes—you'll need to configure additional settings or use a tax service integration.
If you sell digital products internationally, see Selling Digital Products for information on digital goods tax requirements.
When to consider a tax service
CartOS's basic tax settings work well for many businesses, but you may want a dedicated tax service if you:
- Sell products with complex exemption rules that vary by state
- Need real-time rate lookups rather than monthly updates
- Want automated tax filing and remittance
- Sell internationally and need VAT/GST calculation
- Have high volume and need audit-ready documentation
Tax service integrations are available in the Bolt Store for providers like Avalara AvaTax and TaxJar, which offer real-time calculation, automatic filing, and more comprehensive compliance features.
Getting help with taxes
Sales tax compliance can be complicated, especially if you sell in multiple states. We highly recommend consulting with a tax professional who understands e-commerce and multi-state sales tax obligations.
A tax professional can help you determine where you have nexus, ensure you're collecting the right amounts, handle registrations with state tax authorities, and file your returns correctly. This is especially important given the evolving landscape of economic nexus laws following the 2018 South Dakota v. Wayfair Supreme Court decision.