CA taxes being collected do not match up with Shopify's online special tax rules

FPTu
New Member
1 0 0

I'm in Southern California operating as a sole proprietor working from home. I sell computer programs online and these are digital items that are emailed and not shipped.  

I'm using Shopify to process all of my Credit Card payments. I have a recent credit card transaction to a customer in Merced, which is in Northern California. Please see the attached pic to show how the taxes were charged.

 
screen_cap_shopify_tax_issue.jpg
 
Here's what is on the Shopify website:
 
State tax website Sourcing Taxable shipping Local taxes
California Department of Tax and Fee AdministrationHybridNoYes

 

Special tax rules

California uses a mixture of origin and destination sourcing rules. State, county and city taxes are based on the origin of the purchase (the seller), but district taxes are based on the destination (the buyer).

Here's the link to this info: https://help.shopify.com/en/manual/taxes/us/us-tax-reference#california

My store is set up as Hybrid. 

I'm wondering why Shopify is charging city and county taxes based on the buyer's location? Quickbooks does not like this and when I try to correct it it's giving me warnings. I think Shopify is not collecting the taxes correctly, but I'm not 100% certain. Please help clarify this. Thanks!

0 Likes
LRoel
New Member
3 0 0

I have the same problem - hopefully we can get an answer 

Tax ImageTax Image

 

Thanks! 

0 Likes
pracdrp
New Member
1 0 0

I am having the same issue with Shopify charging district tax to buyers in non-districts.  Is there anyone out there that has done their sales tax return with many district taxes with the reports Shopify offers.  I have done sales tax returns with just about all the districts in Ca for 30+ years and can't figure out how Shopify is calculating their reports. 

There has to be someone out there that can tell me how to obtain a taxable sale report.  We use shopify plus.

Thanks in advance

0 Likes