As a merchant, you may need to charge and collect taxes from your subscription customers. While recurring orders are managed through Recharge, all tax settings are handled directly in Shopify for merchants using the Shopify Checkout.
This guide explains how to set up your tax settings, and what to expect from Recharge in regards to taxes.
Refer to Setting up taxes in Recharge if you are using the Recharge Checkout on Shopify or the Recharge Checkout on BigCommerce.
Configure your Shopify store settings to charge taxes
The Shopify Checkout integration allows you to manage your tax settings directly in Shopify.
Step 1 - Configure your tax settings in Shopify
To get started charging taxes on subscription products, you will need to configure your tax settings in Shopify. The setup requirements may vary depending on your location, as well as your shipping destinations.
Step 2 - Set your products to taxable in Shopify
To ensure taxes are charged at the checkout, and on recurring orders, confirm that the option to Charge tax on this product is enabled under Pricing on the product details page in your Shopify Admin.
Step 3 - Charging taxes on checkout and recurring orders
Tax rates are calculated based on your Shopify tax settings for both checkout and recurring orders.
The total amount a customer owes in taxes is not displayed on the queued recurring order in Recharge. Instead, the tax amount for queued orders will show as $0.00.
The total tax amount is not added to a queued order until after the charge has been processed, as this is when Recharge pulls the charge data from the charge details in Shopify.
Update your tax settings
Once updated, the new tax rates will apply to all checkout and recurring orders.
All prices include tax
In your Shopify Admin under Tax calculations, there is the option to have All prices include tax. With this option enabled, taxes are included in the price of your products.
When updating your Shopify tax settings with this option enabled, these changes will only be reflected for new subscribers. If you have existing subscribers and to update their accounts to match this tax setting, contact the Recharge support team for assistance.
If your store on the Shopify Checkout Integration is charging duties, subscribers will be charged duties on the checkout order. At this time, Shopify does not support charging duties on recurring orders.
Refer to Shopify's Duties and import taxes for more information on charging duties.
Refer to Shopify's tax reports for an accurate summary of the taxes that are collected on your orders.
While our support team can offer assistance in regards to recurring orders and subscription customers, it is best to contact Shopify's support team for questions related to your tax settings.
Any existing tax documentation created by Recharge only applies to merchants using the Recharge Checkout.
We also recommend working with a local tax professional to ensure that your tax settings are configured correctly based on Economic Nexus laws.
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