Nexus-Aware Tax Calculation with TaxJar

Introduction

The Nexus-Aware Tax Calculation feature enhances Infigo’s TaxJar integration by enabling accurate, jurisdiction-compliant sales tax calculations for U.S. businesses operating across multiple states.

By using TaxJar’s full tax calculation API, Infigo can now account for nexus rules, origin vs destination sourcing, shipping taxability, and cart-level values, ensuring that customers are charged the correct tax at checkout.

This guide explains what changed, why it matters, and how to configure it correctly.

What this feature does

When enabled, Nexus-Aware Tax Calculation allows Infigo to:

• Calculate tax based on TaxJar nexus rules

• Respect origin-based and destination-based sourcing

• Correctly determine whether shipping is taxable

• Calculate tax using the actual cart subtotal and shipping cost

• Return 0% tax in states where no nexus exists

• Automatically convert values to USD for TaxJar compliance

Why this was added

Previously, Infigo used a simple rate lookup method with TaxJar. While fast, this approach:

• Ignored nexus presence

• Did not account for sourcing rules

• Could incorrectly tax (or fail to tax) shipping

• Returned raw tax rates instead of a true tax calculation

For merchants selling across multiple U.S. states, this could result in incorrect tax being charged, creating compliance and reporting risks.

The new Nexus-Aware mode solves this by using TaxJar’s full tax calculation endpoint.

Before you start

Before enabling Nexus-Aware Tax Calculation, ensure you have:

• An active TaxJar account

• TaxJar API credentials configured in Infigo

• Nexus locations configured in TaxJar (if applicable)

• A valid Ship-From address for tax sourcing

• USD currency enabled or available for conversion

Tax Calculation Modes

Infigo now supports two TaxJar calculation modes:

1. Default (Rate Lookup)

• Uses simple rate lookup

• No nexus or sourcing logic

• Matches previous behaviour

• Best for simple, single-state setups

2. Use Nexus-Aware Rates (Recommended)

• Uses TaxJar’s full tax calculation

• Evaluates nexus automatically

• Applies sourcing rules correctly

• Determines if shipping is taxable

• Uses cart subtotal and shipping amounts

STEP 1 – Enable Nexus-Aware Tax Calculation

1. Go to Admin → Taxes

2. Open your TaxJar provider settings

1. Locate the Tax Calculation Mode setting

2. Select Use Nexus-Aware Rates

1. Save your changes

ℹ️ When this mode is selected, additional configuration fields will appear.

STEP 2 – Configure the Ship-From address

A Ship-From address is required for nexus-aware calculations.

In the TaxJar settings, enter:

• Country

• State

• City

• ZIP / Postal Code

• Street address

Why this matters:
TaxJar uses the Ship-From address to determine:

• Origin vs destination sourcing

• Nexus applicability

• Correct tax jurisdiction

⚠️ If the Ship-From address is missing, Infigo will fall back to the Default rate lookup behaviour.

STEP 3 – Include or exclude nexus addresses

You can control whether TaxJar nexus addresses are included in calculations.

• Include Nexus Addresses:
  TaxJar-defined nexus locations are considered when calculating tax

• Exclude Nexus Addresses:
  Only destination-based rules are applied

This option is useful if your nexus setup is managed externally or if you want to limit automatic nexus evaluation.

STEP 4 – How tax is calculated at checkout

When Nexus-Aware mode is enabled:

1. The customer enters a shipping address

2. Infigo sends TaxJar:

   • Cart subtotal

   • Shipping amount

   • Destination address

   • Ship-From address

3. TaxJar evaluates:

   • Nexus presence

   • Sourcing rules

   • Shipping taxability

4. Infigo applies:

   • Correct tax rate

   • Correct shipping tax

   • 0% tax if no nexus exists

All amounts are automatically converted to USD before being sent to TaxJar.

Shipping tax behaviour

With Nexus-Aware mode enabled:

• TaxJar determines whether shipping is taxable per state

• Shipping tax is applied only when required

• No manual shipping tax rules are needed in Infigo

This ensures compliance with varying U.S. state regulations.

Fallback behaviour

If Nexus-Aware mode is enabled but required data is missing:

• Infigo automatically falls back to the Default rate lookup

• Checkout is not blocked

• Tax is still calculated using basic rates

This ensures a safe and resilient checkout experience.

Performance and caching

To maintain performance:

• Tax rate lookups are cached for 24 hours

• Cart-level calculations are performed only when needed

• Existing “Include City/Street in Rate” settings are respected

Common setup mistakes to avoid

• Enabling Nexus-Aware mode without a Ship-From address

• Assuming shipping is always taxable

• Forgetting to configure nexus locations in TaxJar

• Expecting non-USD currencies to be sent directly to TaxJar