How to Enable & Disable Tax Collection in a State

Enabling sales tax for a state in TaxCloud allows TaxCloud to calculate and apply the correct sales tax rate for the states where you are registered to collect tax. This feature is vital for complying with state regulations and ensuring you are meeting your tax collection obligations.

Considerations

Before you proceed with enabling or disabling collection, it’s important to ensure:

1. State Registration

• One of the requirements to collect sales tax is registering with the state.
• If you are not yet registered in the state you would like to enable, we recommend getting registered first.
• If the state is an SST state, we can assist you with getting registered through TaxCloud's streamlined registration process for Streamlined Sales Tax (SST) member states. Reach out to service@taxcloud.com.
• If the state is a non-member state, our registration team can assist with registering. Read more here!

:::info Already registered in an SST state? If you are already registered in an SST state and need to enable tax collection, our support team will need to assist you. You will be prompted to submit a request when you attempt to enable collection for that state.

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2. Location (Physical Presence)

• Do you have a location in the state?
• Having a location in a state where you are collecting and remitting sales tax creates a physical nexus. Our system will use that address to source sales tax rates, depending on state laws.

Important when disabling: If you have an active physical location in a state, you may need to remove that location before you can turn off tax collection (see Disabling tax collection in a state below).

Before you begin

Ensure your sales tax ID is handy. You will be required to enter your sales tax ID in the required field when enabling collection.

Step 1: Log into your TaxCloud Account

Go to TaxCloud and log in using your credentials.

Step 2: Navigate to the Thresholds Page

Go to the Thresholds page to view your current state settings and open a specific state’s details.

You can access a state’s details in multiple ways:

• Click a state from the list view on the Thresholds management page.
• Use the three-dot (kebab) menu next to the state in the list view and select View Details.
• From within the State Details page, use the kebab menu options.

Step 3: Enable Collection for the State

• Click the Turn On Tax Collection button, and select Enable Tax Collection.

  

• Enter your sales tax ID.

• Add the address in the address field.

• Select your Collection Start Date, and Enable Collection.

Step 4: Confirm Tax Collection Status

Once you've enabled collection for a state, the system will show the status as Is Collecting will show as ‘On’ in the Tax Collection section. This indicates that sales tax will be calculated for any sales made in that state.

Step 5: Review and Adjust as Needed

We recommend periodically reviewing your State Collection Settings to ensure they align with your current tax obligations. You can update these settings at any time within your TaxCloud account.

Disabling tax collection in a state

If you determine that your business is no longer required to collect and remit sales tax in a specific state, you can turn off tax collection from the Thresholds/State Details experience.

Before you disable

• Physical presence/location in the state: If you have a physical location in that state, you must remove it first. Go to Settings → Locations, remove the location for that state, then return to Thresholds to disable tax collection.
• SST states: For SST (Streamlined Sales Tax) states, you typically cannot disable tax collection directly in the app. Please contact Support so we can make the proper adjustments.

Steps to disable

1. Navigate to the Thresholds page.
2. Open the state you want to change (either click the state row or use the three-dot menu → View Details).
3. In the state’s details, locate the Tax Collection status.
4. Select Stop Collecting Taxes / Turn Off Tax Collection (button label may vary).
5. Confirm your choice in the pop-up window.

SST states list

AR, GA, IN, IA, KS, KY, MI, MN, NE, NV, NJ, NC, ND, OH, OK, PA, RI, SD, TN, UT, VT, WA, WV, WI, WY

:::info Important: If TaxCloud is not calculating sales tax at the point of sale (for example, if you're using a platform like Shopify), you must also update your tax settings within that platform to stop calculating tax for the disabled state.

Disabling the state in TaxCloud alone will not prevent your store from continuing to collect sales tax. Be sure to make the change in both places if needed.

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