Thinkific allows you to quickly create beautiful, engaging courses to sell directly to your students. It’s also incredibly user-friendly, making it easy for entrepreneurs, educators, authors, and others to get started with creating their courses on the platform.
I’ve been using Thinkific for a few years now, and it’s an amazing platform for creating and selling my online courses. As an online course creator, it’s important to understand the tax laws in your country or region to charge taxes accurately on your course sales. Depending on where you’re located, there may be certain rules and regulations that need to be followed when charging taxes on your courses.
The purpose of this article is to provide a comprehensive guide on how to start charging taxes in Thinkific. I’ll walk through the steps in setting up tax rates, including which information needs to be provided and how they’re applied when selling courses within the platform.
Setting Up Your Thinkific Account for Tax Collection
To start charging taxes in Thinkific, you must first enable tax collection within the platform. You can do this from the Settings page of your Thinkific account, and it is as simple as checking a box to indicate that you’d like to charge taxes on your course sales.
Once tax collection is enabled, you can configure the relevant tax settings for your courses. Configuration includes setting a default tax rate and selecting whether or not you’d like to offer tax-inclusive pricing (i.e., displaying prices including applicable taxes). You can also add exemptions if needed.
Finally, you must choose which tax collection method works best for your business – self-remittance or third-party remittance (such as PayPal). With self-remittance, all taxes will be collected by Thinkific and then sent directly to the relevant government agency at regular intervals.
With third-party remittance, however, any applicable taxes will be collected by the payment processor (e.g., PayPal) and sent directly to the government agency on behalf of the merchant/course creator.
Understanding Tax Regulations for Your Location
Before you can start charging tax in Thinkific, it’s important to understand the tax laws and regulations that apply to your jurisdiction. You may need to research the applicable rules and regulations for your location to accurately collect taxes on your course sales.
Depending on your location, different taxes might apply to your course sales. These could include Sales Tax, Value-Added Tax (VAT), Goods & Services Tax (GST), etc. It’s important to identify which of these taxes apply in your region so that you can charge them appropriately when selling courses within the Thinkific platform.
Once you’ve identified the types of taxes applicable to your course sales, you must determine their respective rates. Different regions have different rules around how these taxes should be applied, so it’s important to know what those rates are before setting up a tax rate in Thinkific.
Applying Tax Rules to Your Courses
When applying tax rules to your courses, there are two main methods in Thinkific: you can apply them to individual courses or course bundles.
You’ll need to set up the tax rate for individual courses when creating it in the Course Builder. This will allow you to charge taxes on each sale of that particular course. You can also set up a global tax rate that will be applied across all of your courses if you want them to have the same rate.
You’ll need to create a new bundle for course bundles and then select the applicable tax rule from the drop-down menu. Doing so will ensure that all sales for that bundle include taxes as part of the price.
Setting Up Tax Exemption Rules for Specific Customers or Locations
In addition to setting up general tax rates for courses and bundles, Thinkific also allows you to set up specific exemption rules for customers or locations that don’t have to pay taxes on their purchases.
For example, suppose you’re located in Canada and selling digital products like ebooks or video tutorials. In that case, Canadian customers won’t need to pay taxes on these purchases, but other international customers may need to pay a different rate depending on their location.
To set up an exemption rule for specific customers or locations, go into your Tax Settings page in Thinkific and add any exemptions as needed. Then when someone purchases from one of these exempted countries or regions, they won’t have any additional taxes added to their order total.
Previewing Tax-Inclusive Prices For Courses
Once you’ve set up both general and exemption tax rates within Thinkific, you must preview the final price of each course with taxes included so that students know exactly how much they’ll be paying upfront before making their purchase decision.
To do this, simply visit your Course Builder page and click “Preview” under each course or bundle pricing option where it says “Tax Included.” From here, you’ll see the final price with taxes added so that students aren’t surprised by additional fees at checkout.
Managing Tax Collection and Reporting
One of the most important aspects of charging taxes in Thinkific is monitoring and managing tax collections and remittances. With Thinkific, you can easily track your sales data and view an up-to-date overview of your course sales and taxes collected over time. It allows you to stay on top of any changes in tax collections within the platform.
You can also generate tax reports for accounting purposes and ensure that your business complies with all applicable laws and regulations. The reports provide helpful insights into which taxes have been collected from each sale, the amount of money collected, and which taxes were used to determine the final price for each purchase. This information helps you keep accurate records for both accounting and compliance purposes.
Finally, it’s important to keep up-to-date with changes in tax laws and regulations so that you can adjust when collecting taxes in Thinkific. Depending on where you’re located, there may be new rules or amendments put into place from time to time that require certain adjustments to remain compliant with those policies. Keeping abreast of these changes will help ensure your business remains compliant when selling courses through the platform.
Thinkific Tax 101: Conclusion
It’s important to understand the tax laws in your country or region and charge taxes accordingly on course sales in Thinkific. I’ve outlined the steps in setting up and managing tax rates within the platform, from providing the required information and applying it when selling courses.
This article has helped you understand how to start charging taxes in Thinkific. Implementing tax collection is key to ensuring compliance with applicable laws and regulations and avoiding potential legal issues that may arise if you don’t comply.