From ec285eabcd6de15b08600e40474c36d4fd90674f Mon Sep 17 00:00:00 2001
From: Thibault Le Ouay Ducasse <thibaultleouay@gmail.com>
Date: Sun, 11 Oct 2026 15:04:39 +0200
Subject: [PATCH] stripe: enable tax after card setup without the stale status
 gate

Co-Authored-By: Claude Opus 5.5 <noreply@anthropic.com>
---
 .../src/router/stripe/trial-lifecycle.test.ts | 50 ++++++++++++++-----
 packages/api/src/router/stripe/webhook.ts     | 21 ++++++--
 2 files changed, 53 insertions(+), 18 deletions(-)

diff --git a/packages/api/src/router/stripe/trial-lifecycle.test.ts b/packages/api/src/router/stripe/trial-lifecycle.test.ts
index 9841f8c53..f5a9b82b5 100644
--- a/packages/api/src/router/stripe/trial-lifecycle.test.ts
+++ b/packages/api/src/router/stripe/trial-lifecycle.test.ts
@@ -454,11 +454,7 @@ describe("trial lifecycle", () => {
       ]);
     });
 
-    test("setup checkout with a taxable address → automatic tax on", async () => {
-      customer = {
-        ...customer,
-        tax: { automatic_tax: "supported" },
-      } as Stripe.Customer;
+    function stubSetup() {
       stubs.push(
         stub(stripe.setupIntents, "retrieve", () =>
           Promise.resolve({
@@ -477,19 +473,47 @@ describe("trial lifecycle", () => {
           Promise.resolve({} as Stripe.Response<Stripe.Customer>),
         ),
       );
+    }
 
-      await caller().sessionCompleted(
-        event("checkout.session.completed", {
-          mode: "setup",
-          customer: "cus_setup",
-          setup_intent: "seti_1",
-        } as Stripe.Checkout.Session),
+    const setupCompleted = () =>
+      event("checkout.session.completed", {
+        mode: "setup",
+        customer: "cus_setup",
+        setup_intent: "seti_1",
+      } as Stripe.Checkout.Session);
+
+    test("setup checkout completed → automatic tax on after the card", async () => {
+      stubSetup();
+
+      await caller().sessionCompleted(setupCompleted());
+
+      expect(updateSubscription.calls.map((c) => c.args)).toEqual([
+        ["sub_setup", { default_payment_method: "pm_new" }],
+        ["sub_setup", { automatic_tax: { enabled: true } }],
+      ]);
+    });
+
+    test("Stripe rejecting the tax location still keeps the card", async () => {
+      stubSetup();
+      stubs = stubs.filter((s) => s !== updateSubscription);
+      updateSubscription.restore();
+      const update = stub(
+        stripe.subscriptions,
+        "update",
+        (_id: string, params?: Stripe.SubscriptionUpdateParams) =>
+          params?.automatic_tax
+            ? Promise.reject(new Error("customer_tax_location_invalid"))
+            : Promise.resolve({} as Stripe.Response<Stripe.Subscription>),
       );
+      stubs.push(update);
 
-      expect(updateSubscription.calls[0]?.args).toEqual([
+      await caller().sessionCompleted(setupCompleted());
+
+      expect(update.calls[0]?.args).toEqual([
         "sub_setup",
-        { default_payment_method: "pm_new", automatic_tax: { enabled: true } },
+        { default_payment_method: "pm_new" },
       ]);
+      assertSpyCalls(update, 2);
     });
 
     test("trialing → active clears trialEndsAt", async () => {
diff --git a/packages/api/src/router/stripe/webhook.ts b/packages/api/src/router/stripe/webhook.ts
index 2760177eb..486f39716 100644
--- a/packages/api/src/router/stripe/webhook.ts
+++ b/packages/api/src/router/stripe/webhook.ts
@@ -26,7 +26,6 @@ import { removeDomainFromVercelIfUnused } from "../../lib/vercel";
 import { createTRPCRouter, publicProcedure } from "../../trpc";
 import {
   buildFromSubscriptionOrThrow,
-  canAutomateTax,
   cancelSupersededSubscriptions,
   customerIdOf,
   getCurrentPeriodEnd,
@@ -222,13 +221,25 @@ async function attachSetupPaymentMethod(session: Stripe.Checkout.Session) {
   const subscription = await stripe.subscriptions.retrieve(subscriptionId);
   if (customerIdOf(subscription) !== customerId) return;
 
-  // The setup session collected the billing address, so tax can start here.
   await stripe.subscriptions.update(subscriptionId, {
     default_payment_method: paymentMethod,
-    ...((await canAutomateTax(customerId)) && {
-      automatic_tax: { enabled: true },
-    }),
   });
+
+  // The card now carries the billing address the setup session required, and
+  // Stripe Tax falls back to it. Just try: Stripe rejects a location it cannot
+  // place, and that must not undo the card we already attached.
+  if (!subscription.automatic_tax?.enabled) {
+    try {
+      await stripe.subscriptions.update(subscriptionId, {
+        automatic_tax: { enabled: true },
+      });
+    } catch (err) {
+      console.error(
+        `Failed to enable automatic tax on ${subscriptionId}:`,
+        err,
+      );
+    }
+  }
   return subscription;
 }
 
-- 
2.51.2