Enable Stripe Tax in the Stripe Dashboard under Settings > Tax; complete the registration wizard by adding your business address and at least one tax registration for the jurisdictions where you have nexus.
For one-time payments, include 'automatic_tax[enabled]=true' in your PaymentIntent creation request; this requires the PaymentIntent to have a 'customer' with a valid billing address — Stripe uses the customer address to determine tax jurisdiction.
For subscriptions, set 'automatic_tax[enabled]=true' on the Subscription object at creation; Stripe will automatically apply the correct tax rate on each invoice based on the customer's address at the time of billing.
Ensure your Products and Prices have 'tax_code' set appropriately — Stripe Tax uses tax codes (e.g., 'txcd_10000000' for general physical goods, 'txcd_99999999' for non-taxable) to determine product taxability; missing tax codes default to Stripe's standard classification.
Retrieve tax breakdown from a created Invoice or PaymentIntent by expanding the 'automatic_tax' field; each tax amount entry includes 'jurisdiction', 'tax_type', and 'inclusive' boolean.
For Checkout Sessions, set 'automatic_tax[enabled]=true' in the session creation parameters; Stripe handles address collection and tax display automatically in the hosted checkout UI.
Known gotchas
Stripe Tax only calculates tax if the customer has a complete billing address; if 'customer.address' is null or missing fields like postal code, Stripe silently skips tax calculation rather than returning an error — this leads to undertaxed transactions that are easy to miss.
Adding a new tax registration in the Stripe Dashboard takes effect immediately for new transactions but does not retroactively apply to open subscriptions; existing subscriptions will begin calculating tax on the next invoice cycle after the registration is added.
Stripe Tax is a separate paid add-on based on transaction volume; enabling it without reviewing pricing against your transaction volume can result in unexpected charges — review Stripe's Tax pricing page before enabling in production.
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