Sales Tax Setup
The Sales Tax Setup wizard is where you configure sales tax for the first time — where you owe it, what rates to charge, and what's exempt — before turning to the day-to-day Tax workspace for filing and reporting. It's a guided path through five areas rather than a single form, because those five things genuinely have to happen in order: nexus decides where you owe anything, rates decide how much, categories and rules decide what's taxable, and certificates decide who's excused.
Where to access
Accounting → Sales Tax, then the Setup tab. Setup is the one tab hidden from anyone who can't make changes to tax settings — someone with view-only access to Tax sees Overview, Returns, Reports, and Transactions, but not Setup.
Getting started checklist
The first time you open Setup, a Getting started card walks through the ordered steps with a progress bar: register where you collect tax, add the rates to charge, pick a default tax code for each jurisdiction, install a rule pack, set the filing schedule, and close your first filing period. Each row shows why it matters and links straight to where you'd do it; the whole card disappears once everything on it is done.
The five setup steps
Each step is its own card, showing what you already have and, if something's missing, the single most important thing left to do.
1. Nexus
Register each place — a country, or a state/region within one — where you have to collect sales tax. Add a jurisdiction, set its Status (Not Registered, Monitoring, Alert, Voluntarily Registered, or Registered — usually kept up to date automatically), and optionally its Threshold Revenue and Threshold Transactions for economic-nexus tracking. The list shows your year-to-date revenue and transaction count against those thresholds, and flags any jurisdiction that has crossed one with an Alert badge so you know to look at registering there. Each nexus can also carry a Default Tax Code — without one, tax won't apply automatically on documents in that jurisdiction — and a Filing Frequency and Due Day of Month so the tax calendar knows when a return is due.
2. Rates
Fetch published tax rates instead of typing them in by hand. Rates can currently be fetched from California's published county/city rate table, or from your own Avalara account (covering any US address you've shipped to — connect your Avalara account first). A fetch from Washington's published table is address-by-address and isn't available yet pending an address list to price against. Every fetch is a review-first import: nothing is charged differently until you review the new and changed rates and choose to Apply them (or Discard the import). Applying keeps a changed rate as a new version rather than overwriting it, so past invoices still recalculate to the rate they were filed under. Rates fetched this way are state-level by default — California districts and home-rule states (Alabama, Colorado, Louisiana) charge more locally than the state rate, so you may still need to add local rates by hand.
3. Categories
Simple named tags — a Name, a Code, and a Description — for grouping items so a Rule can match against them (for example, "Clothing under $110" as its own category with its own exemption). You only need these if a Rule you're using matches on category.
4. Rules
Install a starter Rule Pack to seed a region's typical exemptions, reduced rates, and categories in one step — packs are available for US states, EU VAT, UK VAT, Canada GST/HST/PST, Australia GST, and several other regions — or manage individual rules directly under Active Rules. Installed packs can be uninstalled, which removes the rules they seeded.
5. Exemption certificates
The per-customer, per-jurisdiction documents — resale, government, nonprofit, export, or reverse-charge — that make a customer's sale non-taxable. Each certificate records the customer, a certificate number, its reason code, the jurisdiction it covers, an effective date range, and whether it's been Verified against the issuing authority. Having none on file is normal for most businesses; the list instead flags certificates that are expiring soon or still unverified.
How this relates to Tax Code, Tax Agency, and Tax Rate
Tax Code, Tax Agency, and Tax Rate are the underlying records everything above is built from, and you can also create and edit them directly — see the Miscellaneous page. Nexus, Rates, and Rules in this Setup wizard are the guided way to build and maintain those same kinds of records for ongoing compliance — tracking economic-nexus thresholds, importing published rates instead of retyping them, and installing whole rule packs — rather than creating a Tax Code or Tax Rate one at a time from Miscellaneous.
If you connect a rate provider like Avalara, keep in mind it only answers "what's the rate at this address" — whether tax applies at all still comes from your own Nexus, Exemption Certificates, and Rules configured here.