Destination based sales tax from out of state sales on NON Shopify Plus Stores

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Shopify Staff
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@LaurenMaiman wrote:

Hi, Sophia!  Struggling with the same issue that many others here seem to have encountered - specifically that sales tax isn't calculating correctly in our home state of California (only charging 7.25% when it should be 7.75%, presumably because of a mix of destination and origin based taxes).  Other than pretending we have a physical presence in every single zip code in California (so that it calculates the county taxes correctly), what can we do?


Hi, @LaurenMaiman!

Shopify's tax settings are updated regularly to reflect the correct rates for each zip code, but if you're finding that the incorrect percentage is being charged, that's something we'll need to look into with our Technical Support team. Do you currently have more than one zip code entered for California under Settings > Taxes in your admin?

Sophia | Social Care @ Shopify
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When I've contacted support on this issue recently, I was told that my account can be set up to calculate ALL county/city/state taxes for the states that this is an issue with, but this would be an account-wide change, which means that every state that has a nexus zip code entered will apply all tax types when calculating.  I have nexus in a few states that are origin based.  Will this cause issues with the tax rates used for these states? My fear is causing further issues by trying to correct this one. 

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Tourist
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Hi CourtnieB! I have physical presence in PA and NJ (PA is an origin based state), but economic nexus in 19 other states. Sophia from Shopify reached out to me, too, but after she put me in touch with the developers, the developer told me, "With your requirements, there is no simple solution that would not cause further problems for your business, particularly because you do have physical presences in Origin states like Pennsylvania where tax must always be charged based on the origin. Adjusting state tax policy for your store cannot be done without affecting all states, such as calculating all as destination." 

 

But each state treats out of state sellers differently. Some that are origin based want you to collect as if it's destination based, and some origin based states want you to charge a flat rate. So you can't just make a blanket rule that you're going to treat all states as destination based. At least I don't think you can. I think you are correct to be hesitant for fear of other problems it may cause.

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@Sophia wrote:

@LaurenMaiman wrote:

Hi, Sophia!  Struggling with the same issue that many others here seem to have encountered - specifically that sales tax isn't calculating correctly in our home state of California (only charging 7.25% when it should be 7.75%, presumably because of a mix of destination and origin based taxes).  Other than pretending we have a physical presence in every single zip code in California (so that it calculates the county taxes correctly), what can we do?


Hi, @LaurenMaiman!

Shopify's tax settings are updated regularly to reflect the correct rates for each zip code, but if you're finding that the incorrect percentage is being charged, that's something we'll need to look into with our Technical Support team. Do you currently have more than one zip code entered for California under Settings > Taxes in your admin?



We do not. We only have 1 physical presence in California (Redondo Beach) and no economic nexuses elsewhere.

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Yes we need to treat the following states as Destination states (since
that's what they are): New Jersey, Washington DC, North Carolina, Georgia,
Indiana, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, and
Wisconsin. Also, sales tax in CA (our home state) appears to be calculating
incorrectly because we significantly under-collected tax based on TaxJar's
analysis. We have one zip code for CA entered in settings.
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@Sophia I just wanted to make sure you saw my reply about only have 1 physical location currently set up.  

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Hi, we have the exact same problem described in this thread. We have nexus in California and Nevada, and it looks like we have to enter all zip codes manually, which is an expensive man-hour cost. Did we ever get a solution or does Sophia have to contact us to do this with their support?

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I haven't heard from Sophia unfortunately so I'm not sure if she's still
individually helping people.
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You can do this yourself via the api without much work. Ended up taking 10 minutes to add all zip codes for california since we are over the $500k sales threshold from the recent wayfair law which basically says you have nexus in all california districts. You don't need shopify plus for this. We are probably getting shopify plus anyways for other reasons though.

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