Sales tax bug

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New Member
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I contacted Shopify about this bug last week, but have not received a response.  There is a bug when checking out that allows the customer to avoid paying the county sales tax.  For instance, in California, if I try to check out and enter the zip, it calculates the correct sales tax (some stores you have to select a country before it does it).  Wanna save a little bit of money? Then select the state and voila! it changes the sales tax to the state rate (excluding the county).  This is happening on our site that isn't live yet, but I was able to confirm it here:

http://littersf.com/

How do we get this fixed?

 

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Shopify Staff
Shopify Staff
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Hi Tim,

Kiersten from Shopify here! Though you have noticed something very interesting about the US sales tax laws, this actually isn't a bug in our system. When it comes to US sales taxes, there are two different types of states - Origin and Destination states. This article explains the difference. More specifically though, within these Origin states is California, which has very different sales tax rules from all other states. Here is an example of how it works: 

Example:

Sale from LOS ANGELES, LOS ANGELES county (California, 90001)
Shipping address in MALIBU, LOS ANGELES county (California, 90263)
State and County taxes are charged.

Example:

Sale from LOS ANGELES, LOS ANGELES county (California, 90001)
Shipping address in DEATH VALLEY, INYO county (California, 92328)
Only State tax is charged.

If a customer is purchasing from within California, but not within the same county - they don't pay county tax, just state. If they are in the same county, the county tax is then charged! 

I hope this clarifies - please do let me know if there's an example of something different you have seen. :) 

Cheers! 

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New Member
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Hi Kiersten,

Thank you for the reply.  That's very interesting.  I think some of our confusion comes from this admin interface which shows that the tax rate as 8% when the amount charged is 7.5% (the State rate).

Tim

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Shopify Staff
Shopify Staff
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Hi Tim,

You've got a great point! In this case, I believe that's due to the Municipality taxes which also don't need to be charged if not within the same Municipality. That being said, it does seem confusing based on the order you sent along to me so I'll talk to some of my colleagues and see if there's anything we can do about it. :) 

Have a great week! 

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New Member
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Thanks for your help.

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