Understanding and Using Taxability Information Codes (TICs) in TaxCloud

What is a TIC?

A Taxability Information Code (TIC) is a numeric identifier used to classify a product or service based on how it’s taxed across different U.S. jurisdictions. It serves as a bridge between what your product is and how sales tax should be calculated for it. It tells TaxCloud whether the items should be taxable or not depending on the destination address of the sale.

Each TIC corresponds to a predefined category in the TaxCloud system, ranging from broad groups like “General Merchandise” to narrow subtypes like “soft drinks,” “digital downloads,” or “children’s clothing under $110.” The rule of thumb is to use “Uncategorized” TIC 0 if your product is taxable in all 50 states.

TICs aren’t arbitrary; they directly impact how tax is computed. The same item could be fully taxable in one state and exempt in another, depending on its TIC. Hence, assigning the wrong TIC can result in incorrect tax calculations, compliance issues, and refund mismatches.

Why TICs Matter

Choosing the correct TIC for each product is critical for:

• Accurate tax calculation: Different categories are taxed differently across states.
• Regulatory compliance: Incorrect TICs can lead to misreporting or over-/under-collection.
• Consistent tax handling: The same TIC must be used during refunds to match original transactions.

TaxCloud supports hundreds of TICs covering a wide variety of industries. You can browse the full list in our here or fetch TICs dynamically via API.

Where TICs Are Used in TaxCloud

TICs are used in several parts of your TaxCloud integration:

At Checkout – Tax Calculation

TICs are typically assigned to each item in the shopping cart when using the /carts or /orders endpoints. In the v3 API, this is done through the lineItems[]TIC field.

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{
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  "lineItems": [
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    {
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      "index": 0,
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      "itemID": "SKU12345",
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      "price": 100.00,
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      "quantity": 1,
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      "TIC": 20010
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    }
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  ]
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}

Product Catalog Setup

If you’re using TaxCloud’s optional product catalog features, you can assign TICs to products ahead of time. These TICs will be used automatically in transactions unless overridden by the API call.

Refunds

TICs are not required when issuing a refund. Instead, TaxCloud automatically references the TIC used in the original sale by matching the orderID and itemID. That’s why it’s critical to ensure TICs are correct and stored properly when creating the original order because they become immutable once the sale is committed.

Best Practice

Always persist TICs per item in your order records to ensure they can be reused in returns or audits.

Tax Exemptions and Certificate Validation

Some tax-exempt scenarios still rely on correct TICs. For example, certain products are conditionally exempt based on buyer category and product classification.

How to Assign a TIC

There are two main ways to assign a TIC in TaxCloud:

Via API (Dynamic)

Assign a TIC to each lineItem in your tax calculation request. This gives you fine-grained control at runtime and is ideal for dynamically-generated carts.

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{
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  "lineItems": [
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    {
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      "TIC": 31000,
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      "price": 50.00,
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      "quantity": 2
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    }
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  ]
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}

Via Product Catalog (Static)

If your catalog is static or pre-configured, you can assign TICs per product via TaxCloud’s merchant dashboard or product catalog setup. This is ideal if your SKUs map directly to known product types.

What if I don’t provide a TIC?

If no TIC is provided, TaxCloud will default to to the TIC set during the integration connection. If your product is tax-exempt or conditionally exempt (like food, medicine, or digital goods), this default may lead to over-collection and potential customer disputes. As a result, ensure that you choose a TIC that better fits your product catalog when setting up your connection with TaxCloud.

If your products are not taxable in all 50 states (i.e. they have some tax exclusion in 1 or more states), you’ll want to use the TIC code from the list below that most closely describes or matches your product. Using this TIC code will tell the TaxCloud system to tax that product appropriately according to the destination address of the sale.

Best Practices for Using TICs

• Be specific: Choose the most accurate TIC for each product. Don’t rely on generic codes unless absolutely necessary.
• Stay consistent: Use the same TIC for sales, returns, and adjustments to ensure tax matches.
• Automate if possible: Map product categories to TICs in your system and automate assignment at checkout.
• Use the TIC Explorer: TaxCloud offers a searchable list of TICs here.
• Update periodically: While TIC codes themselves rarely change, their tax treatment across jurisdictions may evolve. Review TIC assignments at least quarterly.

Example Use Case

Let’s say you sell protein bars. In some states, these are taxed as candy; in others, they’re tax-exempt as food.

• Assigning TIC 40010 (“Candy”) ensures TaxCloud applies the right rules depending on where the customer lives.

• Using the default TIC would classify it as general merchandise, possibly collecting unnecessary tax.

By using the correct TIC, you avoid tax errors and stay compliant.

If you are still unsure about which TIC to use, consult your tax professional.