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How to Set Up Taxes

Updated
Feature Availability User Permissions Time to Complete Skill Level
Philippine and US stores on Launch, Grow, Scale and the free trial Store owner, or a team member with Store settings & administration access About 10 minutes Intermediate

Summary

Overview: Turn on tax collection to add tax to your customers' orders. You set a tax rate for each store location, with one rate for all states or provinces and, if you need them, different rates for specific states or provinces. Overrides let you use a different rate for specific products, categories, shipping fees or additional fees. At checkout, the tax is shown on its own Tax line.

Prerequisites:

  • At least one store location. See How to Add Your Store Location.
  • To create overrides for shipping or additional fees: shipping methods or additional fees already set up. See How to Set Up Shipping for Your Store and How to Add Additional Fees.

Step-by-Step Instructions

Step 1: Turn on tax collection

  1. In the left sidebar, go to Settings → Store.
  2. In the Store Settings menu, click Taxes.
  3. Switch on Enable Tax Collection. You see Tax settings successfully updated.
  4. The Taxes per State/Province panel appears.

Step 2: Set the tax rate for a location

  1. Next to Select Location:, choose the store location. Your first location is selected for you.
  2. The first row is All State/Provinces. Enter its Tax % (0 to 100, up to 2 decimal places). This rate applies everywhere you don't set a separate rate.
  3. To use a different rate for a state or province, click Add State/Province Tax, choose it under State/Province, and enter its Tax %.
  4. Repeat for each state or province that needs its own rate.
  5. Click Save. The first time, you see Tax settings created successfully. After that, you see Tax settings updated successfully.
  6. Repeat for each of your other store locations.

To remove a state or province row, click its delete icon, then Delete in the Delete [State/Province] Tax Setting? window, then click Save. That state or province then follows the All State/Provinces rate.

Step 3: Create a tax override (optional)

Use an override when some items need a different rate in a state or province.

  1. Save the row first. Until it's saved, Create Override is greyed out (Save this store tax setting before creating overrides.).
  2. Under Tax Overrides on the row, click Create Override.
  3. In the Tax Override for [State/Province] window, choose what it applies to under Apply To::
    • Specific Products: choose up to 50 products.
    • Specific Categories: choose up to 50 categories.
    • Shipping Fees: choose a shipping method.
    • Additional Fees: choose one of your additional fees.
  4. Enter the Rate (%):.
  5. Click Create. You see Tax override created successfully.

The override appears under Tax Overrides with a tag (Product, Category, Shipping or Additional Fee). To change it, click its name or the pencil icon, edit it, and click Update. To remove it, click the delete icon, then Delete in the Delete Tax Override? window.

Step 4: Choose what else is taxed

Below the tax rows, three switches control overrides and digital products. Each one saves as soon as you switch it.

  • Allow Tax Overrides for Shipping Fees: lets you create overrides for shipping methods.
  • Allow Tax Overrides for Additional Fees: lets you create overrides for additional fees.
  • Charge Taxes on Digital Products: taxes all your digital products, and lets you create overrides for them.

All three are on by default. Turning one off opens a warning. Click Delete to confirm: the matching overrides are deleted and those items are no longer taxed.

Verify It Worked

Success criteria:

  • After you reload the page, Enable Tax Collection is on and your rates are still listed for each location.
  • At checkout, the order summary shows a Tax: line with a breakdown below it. Click the arrow next to the amount to hide or show the breakdown.

Troubleshooting

Common errors

  • "Please select State/Province for all tax collection items": a row you added has no state or province. Choose one or delete the row.
  • "Duplicate State/Province values are not allowed": two rows use the same state or province. Remove one.
  • "Please select a store location first.": choose a location next to Select Location:.
  • "Invalid state/province ID. Please refresh and try again.": reload the page and try again.
  • A product or category is missing from the override list: it is already in another override for the same state or province. Edit that override instead.
  • Digital products don't appear in the product list: digital products can only be added to overrides on the All State/Provinces row, and only while Charge Taxes on Digital Products is on.
  • The Shipping Fees option is missing: switch on Allow Tax Overrides for Shipping Fees. The same applies to Additional Fees.

Limitations & considerations

  • Tax settings are saved per store location.
  • The tax rate is chosen from the customer's delivery state or province. If you haven't set a rate for it, the All State/Provinces rate is used.
  • The shipping methods you can pick for an override are J&T (Standard Shipping), Lalamove (Same Day Delivery) and Book My Own (Flat Shipping Fee), when they're switched on. Lalamove (Same Day Delivery) is only available for Metro Manila, Cavite, Rizal and Bulacan.
  • Turning off Enable Tax Collection stops taxes at checkout. Your rates stay saved.

Next Steps & Related Resources

Need more help? For more information and assistance, please send an email to support@prosperna.com.

Last Updated: 10/09/2026