Configure Automatic Tax Collection for SaaS Subscriptions
Overview
This guide explains how to set up automatic tax collection for your SaaS subscriptions processed through Stripe. The feature allows you to define tax collection jurisdictions, calculation methods, and pricing behavior, with all settings synchronizing directly with Stripe's Automatic Tax system. These configurations will apply to new subscriptions and any reactivated subscriptions from the point of setup onward.
Please note: This functionality is exclusive to the SaaS V1 system using Stripe as the payment provider. It is not available for SaaS V2 or other payment gateways.
Step 1: Enable Automatic Tax Collection
To begin, go to the SaaS Configurator and select the Automatic Tax section. Locate the setting labeled Enable automatic tax collection for SaaS products and toggle it to the ON position.
Step 2: Configure Tax Registrations
In the Tax Registrations area, click the Manage Tax Registrations button. This action will redirect you to your connected Stripe account dashboard. There, you can add or update the specific countries and states where your business is registered to collect sales tax. After you have configured these jurisdictions in Stripe, they will be displayed within your CRM. Taxes are automatically calculated by Stripe based on your customer's billing address and your registered tax locations.
Step 3: Select a Product Tax Code
Find the Product Tax Code dropdown menu. Select the tax code that best corresponds to the nature of your SaaS product from the available list. The code you choose determines the tax calculation rules applied by Stripe. It is important to select the appropriate code based on your product type, and we recommend consulting with a tax professional for guidance. After making your selection, click Save.
Step 4: Configure Tax Behavior
Under the Tax Behaviour section, you can set the default way taxes are displayed and applied to your prices. Choose one of the following options:
- Automatic: This setting uses tax-exclusive pricing in the US and Canada, and tax-inclusive pricing in all other regions.
- Inclusive: The displayed product price already includes the calculated tax amount.
- Exclusive: The tax amount will be added on top of the displayed product price at checkout.
Click Save to confirm your selection.
Step 5: Configure Category-Level Overrides (Optional)
If you need different tax rules for specific product categories, scroll to the Category Level Overrides section. Click the edit icon next to the category you wish to modify. In the overlay that appears, you can:
- Enable or disable tax collection for that specific category.
- Choose a custom tax behavior (Inclusive, Exclusive, or Default) for the category.
Save your changes. Any settings configured here will override the global settings for subscriptions within that category.
Important Behavior Notes
It is crucial to understand how these settings are applied:
- All configurations are prospective only and do not update existing, active subscriptions.
- If you change your tax settings during a customer's billing cycle, their current subscription will continue using the tax rules that were in place when it started.
- If a subscription is canceled or deactivated due to a failed payment and is later reactivated, the new tax settings will apply upon reactivation.
- This feature is only functional for agencies on the SaaS V1 plan using Stripe.
Tax & Compliance Disclaimer
Our CRM provides tools to help you manage tax collection but does not offer tax, legal, or compliance advice. You are solely responsible for understanding and meeting your tax obligations. We strongly advise consulting with a qualified tax professional in your jurisdiction to ensure your configuration is correct for your specific business circumstances.