Connecting TaxCloud to Chargebee (Early Access)

Connect TaxCloud to your Chargebee account to calculate tax rates for your invoices, track your tax obligations, and simplify tax filing.

How the Integration Works

The TaxCloud integration with Chargebee provides:

• Accurate, real-time tax compliance: automatically apply the correct tax rate to invoices and credit notes.
• Nexus tracking: monitor your sales across states and get alerts when you establish economic nexus, ensuring you stay compliant with evolving tax laws.
• Audit-ready reporting and filing: Capture every taxable event, generate compliance-ready reports, and let our team handle your filing.

Invoices and Credit Notes

The integration provides tax calculations and reporting for invoices and credit notes.

• An invoice is created in Chargebee when a subscription or one-time charge is billed. This incurs a tax liability that TaxCloud tracks for you.
• A credit note is created when you issue a refund in Chargebee. This reduces your tax liabliity; TaxCloud also tracks this for you.

Product Taxability

TaxCloud needs to know what your products are so that the tax engine can apply the correct rates. You do this by assigning Taxability Information Codes (TICs) to your Chargebee catalog. The TIC takes into account:

• Sales and use tax rates
• Product and Service exclusions
• Sales Tax Holidays

You can apply TICs in two ways:

1. Set TICs on your Chargebee Product Catalog items (plans, addons, and charges).
2. Set the default TIC for the Chargebee integration in TaxCloud. This TIC is used if no TIC is set for a a plan, addon, or charge.

Customer Exemptions

Customer exemption status is set in Chargebee. When you mark a customer exempt, you must also add an exemption certificate for that customer in TaxCloud and reference the certificate ID in Chargebee.

If you wish to add a certificate to TaxCloud at a later time, you can enter the text "Exempt" instead.

Considerations

• TaxCloud currently provides sales tax calculations, reporting, and filing for the United States only.
• The integration is currently limited to one refund per invoice. Subsequent refunds will not be recorded in TaxCloud.
• TaxCloud fully supports Chargebee test environments. TaxCloud recommends configuring the integration in your test environment before setting it up in production. To do so, set up a separate connection in TaxCloud for each Chargebee environment.

Before You Begin

Complete these steps before you set up the integration.

Request Access to the Integration

The TaxCloud integration with Chargebee is currently in early access — available to select customers only.

• New customers are eligible for our Chargebee early access offer. Head here to schedule a call.
• Existing customer looking to add Chargebee? Email marketing@taxcloud.com to get started.

Verify Your Chargebee Organization Address

TaxCloud uses your business address to determine the correct tax for each invoice. The Organization Address you set up in Chargebee serves as the origin address for tax calculations through TaxCloud. To ensure accurate results, this address must include at least the Country, State, and Postal Code.

You can configure your Organization Address by navigating to Settings > Configure Chargebee > Business Profile.

Determine which Taxability Information Codes You Need

A Taxability Information Code (TIC), is a code that tells the TaxCloud engine whether the items should be taxable or not depending on the destination address of the sale, allowing an item or a service sold to have accurate tax rates applied. The TIC takes into account:

• Sales and use tax rates
• Product and Service exclusions
• Sales Tax Holidays

Review the list of TaxCloud Taxability Information Codes to determine which codes apply to your Chargebee Product Catalog.

Complete TaxCloud Setup

Your TaxCloud account must be set up so that the integration works correctly.

1. Sign into TaxCloud.
2. Complete your TaxCloud Business Profile.
3. Set up your locations and states.

Step 1: Set up the Connection in TaxCloud

In TaxCloud, set up the connection for Chargebee.

1. Go to the Integrations page.
2. Click Add Connection, then click Chargebee.

3. In the top-right corner, click Add.

   

   Configure integration settings:

   

   1. Set a Name for the integration.
   2. Set the URL for your Chargebee account.
   3. Set the default Tax Information Code (TIC). Read more about the TICs here.
4. Click Finish Setup.
5. Note the Connection ID — you'll need this in a later step.

6. If you're connecting your production Chargebee environment, click Go Live so that all transactions from Chargebee are processed for reporting and filing.

   Note: If you're setting up a connection to your Chargebee test environment , skip this step. You do not want test invoices to be counted as real tax obligations.

Step 2: Connect Chargebee to TaxCloud

In Chargebee, and the TaxCloud tax provider.

1. Navigate to the Apps page.

2. In the Allowed Tax Providers list, click TaxCloud.

   

3. In the top-right corner, click Get Started.

   

4. Enter the TaxCloud Connection ID from Step 1.

   

5. Verify your organization address in Chargebee, then click Proceed.

6. On the Enable Address Validation step, enable both switches, then click Proceed.

   

   Configure sync rules:

   

   1. Enable the switch to Post invoices & credit notes to TaxCloud. This is required for TaxCloud to handle tax reporting and filing.
   2. Choose a commit option; TaxCloud recommends Commit all invoices and credit notes for most customers. You may wish to chose Commit only paid invoices if you use cash-basis accounting.
   3. Click Proceed.

Step 3: Verify Customer Addresses

TaxCloud needs customer address information to calculate taxes accurately. Use the address validation tool to make sure your customers' addresses are correct.

1. Go to the TaxCloud app page in Chargebee.

2. In the Validate Existing Addresses box, select the United States.

   

3. Click Run Check. Chargebee notifies you of invalid addresses via email.
4. Correct any customer addresses that failed validation.

Step 4: Add TaxCloud Exemption Certificates for Exempt Customers

If you have exempt customers, an exemption certificate should be set up for each of them in TaxCloud.

1. Find your exempt customers in Chargebee by setting up a Customer Taxability is Not Taxable filter.
2. For each customer, add an exemption certificate in TaxCloud.

3. For each customer, add their TaxCloud exemption certificate ID to their Chargebee customer settings.

   

Step 5: Set Taxability Information for Your Chargebee Product Catalog

As described above, TIC codes tell the TaxCloud tax engine what good or service a Product Catalog item is so that the rates are accurate. Go through all of your Chargebee Product Catalog items to add the best TICs for each plan, addon, and charge. You'll need to set up a TIC for all price points in use for each product catalog item.

To set up a TIC for a catalog item (plan, addon, or charge):

1. In Chargebee, select the catalog item.

2. In the Pricing area, Edit a price point.

   

3. Set the TIC.

4. Repeat for each price point.

Step 6: Enable TaxCloud for the United States Region

Performing this step will configure Chargebee to use TaxCloud for sales tax in the United States.

1. In Chargebee, navigate to Settings > Configure Chargebee > Taxes.
2. Click United States.
3. Enable the TaxCloud for the tax profile that you use for sales in the United States.

Next Steps

• Review the Transactions page in TaxCloud to see your Chargebee tax lookups and orders.
• Add additional exemption certificates for exempt customers as needed.