Short answer
Open the tax settings page in the Dashboard for the same account the secret key belongs to, click Get started, confirm the head office address, preset tax code and default tax behavior, and add a registration for each place the business is registered to collect tax. Then retry the request with automatic_tax.enabled=true. Existing invoices, subscriptions and payment links need automatic tax turned on one by one.
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Why Stripe says Stripe Tax is inactive, and the fix
01
Stripe Tax was never activated
“Stripe Tax hasn’t been activated on your account. See the setup documentation to get started.” Stripe, Error codes (stripe_tax_inactive)
Automatic tax only works after Stripe Tax is activated on the tax settings page. Check that the Dashboard you set it up in is the same account the server’s secret key belongs to.
02
The code turns on automatic tax before setup is done
“If you create invoices, subscriptions, payment links, or Checkout Sessions with the API, set automatic_tax.enabled=true when you create each object.” Stripe, Set up Stripe Tax
Setting automatic_tax.enabled=true on an invoice, subscription, payment link or Checkout Session asks Stripe Tax to do the math. Finish setup first, or leave the flag off until it is.
await stripe.checkout.sessions.create({ // ...line items, mode, success_url automatic_tax: { enabled: true }, // needs Stripe Tax activated });03
Next step: add tax registrations
“Before you start collecting tax from your customers, you must register with the local tax authority.” Stripe, Set up Stripe Tax
Activation clears this error, but tax is only collected where a registration exists. Add one in the Locations tab for each region where the business is registered to collect tax. Without a registration in the customer’s location, the calculation returns zero tax.
04
After activating: update existing objects
“Enabling Stripe Tax doesn’t update your existing invoices, subscriptions, and payment links.” Stripe, Set up Stripe Tax
Also check: invoices, subscriptions and payment links created before activation keep running without tax until each one is updated with automatic_tax.enabled=true.
Checked against the vendor’s docs on : Stripe docs: Error codes; Stripe docs: Set up Stripe Tax.
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Related: Stripe customer tax location invalid · Stripe tax_id_invalid · Stripe works in test mode but not live · Stripe invoice_no_payment_method_types