Not charging taxes to everyone

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Tourist
8 0 6
You do not pay or charge tax on the out of state items
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Excursionist
22 0 13
You would not file/pay tax on the item sold and shipped to a customer in North Dakota. In fact you would not even include that sale on your Minnesota sales tax return (as part of gross sales)
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New Member
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Hello!

 

I have set up collect sales taxes in NY state (NYC in particular so 8.875%) and the taxes are being calculated at the checkout but not collected by sShopify.

Clearly I am having to pay taxes I never collected.

 

I have reached out to Shopify Support however it seems impossible to get a proper answer so far?

 

Any input?

 

Thank you

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New Member
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Hello:

 

I'm having a similar issue and understand about only charging taxes where you have a physical location (Nexus) but how to you pass on that tax to the customer as it reflects the tax, holds it back from the deposit but doesn't add to check-out.  How can that be done?

 

Thanks..

 

PT

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Excursionist
22 0 13
Hi PT,

Sorry but I don't understand your question and I think the best way to clear this up is for you to email me at jerry.shopify@tsttllc.com and then setup a phone call.

Thank you,
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Tourist
7 0 0

Yes, I have the same question.  Do I file sales taxes for all items sold if in Texas or just items sold in Texas?

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Tourist
8 0 6
Just items sold in Texas ;-) If it's shipped out of state the system
shouldn't charge sales tax. That changes if your sales are over some
ridiculous number like a million dollars or something (think Amazon) but
for most of us, just charge sales tax on Texas sales.
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Excursionist
22 0 13

Hi allison,

It sounds like you're comment regarding "sales over some ridiculous number like a million dollars or something..." is referring to economic nexus laws so I'd like to provide a little clarification.  Please understand my intent is to help business owners become informed about various aspects of sales tax rules across the states so that they may then make informed business decisions about their sales tax obligations and responsibilities.  

  • These laws began being implemented in June 2018 by various states and currently all of the 45 states that have a sales tax except Florida, Kansas and Missouri have implemented an economic nexus law.  (The 5 states that do not have a sales tax are New Hampshire, Oregon, Montana, Alaska and Delaware however many cities in Alaska have implemented a city sales tax)
  • The economic nexus laws include a provision for a "small seller exception" or threshold to exclude those sellers from being required to register for a sales tax license and collect and remit sales tax in that state. 
  • This small seller exception is defined by a $ amount of sales and/or number of transactions that are calculated within either a calendar year period (for most states) or the previous 12 month period
  • Most states have settled on $100,000 of sales OR 200 transactions. However some have only a $ threshold like California which is $500,000 while a few others have a threshold of both $ and transactions like New York which is $500,000 and 100 transactions

As you can see by the last bullet point it is possible for a business to have a registration, collection and filing requirement in a state with sales of much less than $100,000 simply because they made over 200 transactions in the state.  I also recognize that the risk to the business owner for not registering may be much less than the administrative costs incurred by the business to register, collect and report a given state's sales tax. This would need to be taken into account by the business owner along with their risk for being located by a given state where they may have established economic nexus, meaning they have exceeded the small seller exception.

 

Hope you find this explanation helpful as well as anyone else reviewing it in the future.

 

Regards,

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New Member
2 0 1
Hi,

You seem to be a Tax Pro!
My store is in Santa Monica, and we sell all over the world, i also realised that customer are not charge for taxes outside of Los Angeles, is that normal as well?
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Excursionist
22 0 13

Hi Zagstore,

The best way for me to answer your questions is by phone.  If you'd like to call me at 713-858-0085 I'll be happy to help.  If you get my voicemail either leave a message or send me a text and I'll get back to you.

 

Regards,

tax_pro

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