Tax Calculation Service

Connect a third-party tax service (Avalara / TaxJar / Vertex / etc.) for real-time accurate tax at checkout. Required for multi-state US / EU VAT-IOSS.

Updated: June 9, 2026
Reading time: 2 min

On this page

A Tax Calculation Service outsources tax math to a specialized vendor. They handle multi-jurisdiction complexity, rate updates, product-category rules, holidays. Required if you collect tax in many US states or EU VAT.

Before you begin

Go to Settings, then Taxes, and select Tax calculation service.
You have Taxes settings permission.
You have a contract + API credentials with the service.

When you need a service

Scenario	Service required?
Single state US	Optional
Multi-state US	Yes: rates differ by city
EU VAT-IOSS	Yes
Cross-border high volume	Yes
Single-jurisdiction TH	Optional

Service categories

Tier	Coverage
Mid-market (TaxJar, Anrok)	US + some international
Enterprise (Avalara, Vertex)	Global, B2B, complex categories
Regional specialists	Single-region depth (e.g., Indian GST specialist)

What they provide


Real-time rate calculation	At checkout
Address validation	Zip+4 / postal precision
Tax holidays	Auto-applied
Product taxability	Per category
Filing assistance	Some tiers
Audit defense	Some tiers

Steps

1. Open Settings > Taxes

(opens full size)

2. Pick Tax calculation service

3. Pick vendor

4. Paste API credentials

5. Map product categories

6. Test transaction

7. Save + go live

Verify the result

Test cart returns service-calculated rates.
Mapping rules apply per category.
Address validation works.

Best practices

Pilot in test mode before live.
Map every product category.
Audit monthly for tax accuracy.
Filing reconciliation with service's reports.

Common mistakes

Wrong tier for your complexity.
Unmapped categories → wrong rate.
No reconciliation with filings.

Next steps

Duties + Import Tax