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How Do Taxes Work With My Mighty Network?
Updated over 6 months ago

As a Host running a paid community or course on your Mighty Network, you are responsible for the taxes on your Mighty Network, which may include taxes where you live as well as where your members are purchasing from. Our goal is to make every aspect of running a paid subscription or one-time payment as easy as possible on your Mighty Network, which is why we offer a third party tax integration for you to manage the process with the flexibility you need.

Quaderno is the third party tax collection service that can integrate with your Stripe account and your Mighty Network. Once you set up Quaderno, you can control the decisions about what taxes are charged to members in your purchase flow on web. (Note: All iOS purchases and taxes are directly handled by Apple, so you don’t need to worry about these purchases). The Quaderno integration is available for Hosts on all Plans.

In order to use Quaderno, you'll need to set up a Quaderno account and purchase a plan first. Quaderno is not automatically added to your Mighty Network. You’ll need to do this manually after you connect your Stripe account. It’s the next step in the process under Admin > Integrations > Quaderno.

This integration with Quaderno allows you to:

  • Have taxes automatically calculated and collected based on your business needs.

  • Show members relevant taxes in their purchase flow.

  • Collect member billing addresses to make taxes even easier to calculate.

  • Show taxes added to your listed prices separately or include them in your price.

  • Exempt certain purchases, such as a business to business sale using EU VAT.

  • Use Quaderno’s reporting and notification features to manage your taxes.

  • Deposit tax amounts automatically into your Stripe account.

Before collecting tax in any jurisdiction, your business will need to be registered with the tax authority in that jurisdiction. Then, Quaderno will use these settings to calculate tax and generate your reports. Learn more on how to manage your tax jurisdictions on Quaderno.

If you choose to not set up Quaderno to customize your tax collection, then the default setting for all member purchases is zero taxes collected, including any new purchases and all ongoing member subscriptions.

Integrating with Quaderno

To get started, go to Admin > Integration > Quaderno to create your Quaderno account and link it to your Mighty Network.

During the process of setting up your Quaderno account, you will be asked to select which platform you use to sell your products or services. Choose the “None of them” option. Then, follow the instructions to finalize your connection.

Once the integration with Quaderno is set up, you will see an option in your Mighty Network under Admin > Integration > Quaderno to toggle the Tax Collection setting “on.” When you turn on this setting, new member purchases and ongoing subscriptions will have taxes applied to them automatically, where applicable, and the tax rate applied will depend on what you have set up in Quaderno. There will be no change to past transactions charged through your Mighty Network.

Quaderno also gives you the option to update Stripe subscriptions automatically if the tax rate changes. To do this, go to your Quaderno Account > Settings > Preferences and check the option to do so.

Collect Member Billing Addresses

All member purchases on the web include fields for selecting the country and entering a zip or postal code. This information identifies the location for Quaderno to automatically detect if there are applicable taxes for that purchase, which then feeds it to Mighty Networks to show in the purchase flow.

If you choose to collect member billing addresses, members will be required to enter their full billing address for the card being used. Existing members will be required to enter a billing address for future purchases. To manage their billing address, members can always go to Personal Settings > Account > Billing Information.

If Quaderno encounters an incorrect validation on the country or the zip or postal code a member used to apply the tax rate, the member will still be able to purchase, but no taxes will be applied. In this case, Quaderno may directly alert you and ask you for additional evidence about the member to determine the right next steps.

Use Inclusive Taxes

If you want to have the tax included in your stated prices instead of added on top of the price, you have the option to turn on what are called “Inclusive Taxes.” This means that Quaderno will detect the tax rate that should be applied and deduct it from the total amount paid by your member. This tax will show up in your Quaderno reporting.

Tax Exempt Purchases

For certain tax jurisdictions, Quaderno is able to validate tax ID numbers and exempt the purchase from taxes. Currently, this validation is offered for European Union VAT numbers, United Kingdom VAT, Australia ABN, and New Zealand NZBN.

If you have any of those tax jurisdictions enabled in Quaderno, members who are tax exempt will be able to enter their Tax ID number during the purchase flow so that taxes will be excluded from their purchase. They will also be able to add or modify their Tax ID number in Your Settings > Account > Billing.

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