Tax exempt at checkout

devumi
Tourist
19 0 1

Hello,

If we have a customer who is a reseller, we would like to exclude charges from the total price.

How can this be achieved at a checkout level?

Our idea is to have a checkbox on the cart page asking if the customer is a reseller  and if the customer checks that we would like to exclude taxes for him. We would then later verify with the customer by asking her reseller permit number and charge him taxes if we are not able to verify the identity.

Can you please help us with how to modify the code to achieve this?

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shayOwensby
Shopify Expert
169 40 83
Hello, if it were me, I’d slightly modify your described process. I would recommend having the customer create their account first and then it’s very easy for you to set them up as tax exempt.

1. Customer creates account and contacts your rep who gets their information.
2. When account is created and verified, you can go in to the Customers tab, now go to the customer and select tax exempt.

I have done what you’re saying for a couple stores in the past and they always got burned by people selecting the option to be tax exempt in checkout when they didn’t qualify resulting in lost money. Not everyone does it but even the few that do, it adds up.

Please let me know if you have any questions.
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devumi
Tourist
19 0 1

Hello @shayOwensby ,

 

Thank you very much for your valuable reply. I totally understand what you are saying. 

What was told me was that, if the user does check that he is a reseller, we are going to ask them for their reseller permit number and if they are not able to prove the identity,  we will make sure we charge them.

 

Can you please how you have achieved this at the checkout level by tweaking the code?

Thank you very much!

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shayOwensby
Shopify Expert
169 40 83
Hello,

Using the process I described, we used a wholesale app that would display wholesale pricing once they were logged into their wholesale account. If you weren’t logged in to an approved wholesale account, you would see standard pricing for the public.

This is the app we used: https://apps.shopify.com/customer-pricing

Highly recommend this app developer. Very user friendly dashboards and always offer great support if needed.

I recommend setting them up as a wholesale customer first because if you send them an invoice for the difference in tax, I don’t believe they’re obligated to pay it.
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devumi
Tourist
19 0 1

Great! Thank you so much for your reply @shayOwensby  . I really appreciate it.

You are right. The only issue is we can't make the checkout process automated and let the users buy 24/7 without any intervention.

I was told that the money we would lose if some customer tries to fake the identity is less and we don't want to compromise on reseller's experience on the website as they will be frustrated to see that they have to pay taxes. 

We are already using bold custom pricing app (but not the wholesale app), we don't have a different price for whole sellers except that they wont be charged taxes.

So just having the checkbox on the checkout page and subtracting the taxes from the total amount if the customer checks the box is what we are trying to do.

 

 

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TungDao
Shopify Partner
243 10 34

Hi @devumi 

If your customer is a reseller, you can set up tax-exempt customers to exlucde charge from the total price. Here is the writing on the topic of How to set up a tax-exempt customer on Shopify https://avada.io/shopify/docs/how-set-up-tax-exempt-customers-shopify.html

Hope it's useful to you

Avada is an e-commerce solution provider based in the heart of Vietnam where the best developers unite. Founded in 2017 by Mageplaza, Avada is responsible to complete the mission to help 1 million online businesses grow revenues.
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Hi @devumi,

I know it's been a while since your last post, but in case you or other people are still in the same boat or had questions about this topic, I wanted to provide some additional feedback based on how some of our customers currently handle the process in Shopify using EXEMPTAX, a tax exemption certificate management platform.

First, I'd like to start off by mentioning that from a compliance perspective (without getting into the nitty details and tax advice) for the most part you'll want to actually collect a resale certificate document (forms vary by state) from your customer in order to substantiate to an auditor that the transaction is a tax exempt. In most states simply having the customers resale or seller's permit number will not be enough.

As far as the flow, there a couple of additional ways of going about this: 

1.  You can utilize an exemption management platform so that during checkout if your customer clicks on a link or checkbox indicating that this is a tax exempt purchase, the customer will be prompted to fill out the correct tax exemption document using an easy integrated flow (if they weren't already exempt). This however would involve interrupting the checkout process which has its pros and cons depending on the nature of your business and desired customer experience.

This is the cleaner approach, but would require some custom development to ensure that real time tax exemption status is communicated back to your store during checkout. 

2. If you prefer to not interrupt the checkout process, your customer would complete their purchase without tax and would receive an email with a link that would allow them complete their exemption certificate using the same integrated flow. If you go this approach, integration using EXEMPTAX would very easy and we can get you up and running in a few hours.

In either case, if the customer ends up providing you with invalid data on the exemption certificate, you'd have to have a mechanism to collect the sales tax that wasn't included if the goods or services have already been delivered.  This can happen because it's not always possible to verify that a tax exemption certificate is valid without manual review and or verification of the tax id number which can only be completed after the document is generated.  

There are few details that I've left out simplify the flow, but if you are or anyone else is interested in seeing how to streamline their tax exemption certificate management processes within Shopify feel free to reach out.

 

 

 

 

 

 

 

EXEMPTAX is a tax exemption certificate management solution provider, that helps business manage their resale and sales tax exemption certificates from collection to audit in minutes.
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