Tax Checkout
Legislation • Compliance
COMPANY
Rakuten Viki
MY ROLE
UX Designer
Duration
1 month
Overview
Problem:
Our Stripe web checkout is tax-inclusive in the US and Canada, leading us to cover consumer digital taxes. iOS/Android app stores already operate tax-exclusive. As Stripe volume grows, this cost increases.
Goal:
Enable tax-exclusive pricing and accurate tax calculation for US states and Canadian provinces across both new checkouts and renewals, with minimal UX impact and full compliance.
Approach:
Prefer an out-of-the-box solution via EV to future‑proof non-Stripe processors; consider Stripe Tax if it’s faster. Prioritise US first if constrained.
Expected Impact:
Material cost savings; BizOps estimates current annualised spend on consumer digital taxes is approximately $660k across US and CA.
Requirements
Backfilling / maintain valid billing address on Stripe
To ensure accurate state, county, and city-level tax calculations in the US and Canada, you must have a complete billing or shipping address for the customer. A card issuer country is not sufficient for accurate tax calculation in these regions. You will need to collect and store the customer's full address, including street, city, state/province, and postal code.²
Legal Considerations
"From a tax perspective, it is generally acceptable to disclose prior to payment confirmation that the price is “plus applicable sales tax.” If the tax amount can be determined at payment, best practice is to separately itemize the tax amount at that time. If the tax amount cannot be determined, it is acceptable to charge an “estimated” amount initially."
Key Touchpoints
Before Introducing Tax
Marketing Communication
Notice to users that we are planning on introducing tax
Main CTA is to get the users to update their billing address
Sent one month prior to enabling tax
Backfilling of customer's address
Ensures that all customers must have a valid billing address
Helps identify US/CA customers that are in a taxable region
Entry point through email, or account settings
Enabling Tax
Checkout
Tax would be charged for all US / CA customers
Checkout journey should clearly indicate that tax is chargable
Displayed tax should apply to all checkout scenarios - e.g. promo code, upgrade, etc.
Billing History
Displayed the full breakdown of charged amount
Breakdown includes taxed amount, discounts, etc.
Before
Implementing tax
Marketing Communication
An email would be sent to ALL customers one month prior to enabling tax. The goal is to get customers to update their billing address and communicate that tax would be charged in their next billing cycle.
NEW Billing Address Form
In addition, we had to create a new form to enable users to update their billing address manually. The main entrances to this form is thru the email or their account settings.
1
1
2
3
Enabling Tax on Checkout
Checkout journey
In addition, we had to create a new form to enable users to update their billing address manually. The main entrances to this form is thru the email or their account settings.
When tax is enabled, users would expect to find the tax breakdown in the payment summary modal (highlighted).
How might we displayed the tax in a clear and concise manner?
Simplified vs Itemised Tax
Context:
Mixed views between advocating for transparency (itemised tax) vs following OTT industry practice (simplified display).
Problem:
Balancing transparency with efficiency, user-friendliness and industry practice.
Goals:
Secure a clear executive decision to guide implementation.
Raise awareness of checkout current state, its complexity, and value of simplicity.
Otion 1:
Itemising Tax
Option 2:
Simplified Tax
Option 1:
Simplified Tax
Option 2:
Itemised Tax
Legal / Compliance
Compliant
Compliant, and external counsel reccomended
UI / UX
Clean, Streamlined, more scalable
Cluttered, especially in mobile view
Industry Alignment
Common practice
(OTT and Subscription Services)
Not commonly found in OTT services
Clarity
Base price + disclaimer
High transparency
(full breakdown shown)
Risks
Potential perception of less transparency
Additional technical complexity and overhead
Final Choice
Billing History
in the checkout journey
History
User Story
As a subscriber, I want to view my past charges with a clear tax breakdown, so I can understand what I paid and download records if needed.
Data that can be shown:
Subtotal
Discount (if any)
Tax
tax_description and taxRate
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