Shopify US Tax Table Limited to Zip Code vs. Zip+4

Tourist
5 0 3

Shopify - Can you please update your tax table to accurately calculate taxes for jurisdictions that fall within the same zip code, but have different tax rates.

I have several customers that are in the same US Zip Code.  That Zip Code has 2-3 different cities that fall within the 5 Digit Zip Code, however, each city is being charged the same Tax.  In reality, each city within the Zip Code has a different tax rate that varies from 7.5% to 8.9%.  Customer who should be charged 7.5% and are being charged 8.9% are complaining and asking for that amount to be refunded.  This causes a number of issues for us including a poor customer experience and headaches accurately collecting, reporting and paying sales taxes each month. 

I believe the fix for this is to use tax rates based on Geolocation street addresses and or Zip Code plus the four-digit specification code, that separate cities, therefore allowing for accurate taxation. 

Many thanks in advance and comments and solutions are always welcome. 

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Community Manager
Community Manager
2000 128 272

Hi Craig, 

Nick here from Shopify! 

Really good point and question. Currently, the best solution to this is via the Plus Shopify plan as well as Avalara is included - and this includes address based rate calculation, which is not always ideal. By letting us know how this affects you and the difference it makes to your business, we will pass it to our tax/development team for future consideration.

Kind Regards, 

Nick

Nick | Social Care @ Shopify
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Tourist
3 0 0

Hi, Nick,

 

I'm having the same problem. I need to collect taxes in each jurisdiction (state, county, municipality) to which we ship an order. Our business and fulfillment resides in TN, but we have to pay taxes based on the zip code +4. I can not figure out how to set this up accurately in Shopify. I set up a "presence" in each state that we have a tax burden (and salespeople) in by choosing any zip code in the state, but then I found out that Shopify was only charging taxes for each order to that state based on that zip code and not the destination zip code, which resulted in some people over or underpaying the taxes due for their shipping location, which our tax department has to reconcile begrudgingly.  I chatted with a Shopify guru this evening on this subject and they suggested that I delete all the states that I set up a presence in. But I tried to put through a test order and found that it is only charging tax in TN based on the tax rate for our office, and not charging taxes at all for out-of-state orders. How can I fix this to charge tax based on the zip code to which the order is shipping?  

 

Thanks,
Jason 

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Tourist
3 0 0

Also, NIck, yes, please pass this along to your tax guru. Shopify really should have a solution for this. Available, up-to-date tax tables perhaps or an integration with a tax engine?  How much is Shopify Plus if I need to upgrade just to accommodate this feature?

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New Member
1 0 1

@Nick - I have the same issue as Craig. Please add my vote to getting this taken care of by your tax/development team. Really this seems like this is an issue for everybody who uses your platform, theoretical. Regardless of the specifics of my (or my clients') business, the store needs to charge tax correctly.

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