Tax not collected

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I just made my first sale with my website and tax was not collected. It is an out-of-state order (I’m in Ca and customer in NV) and the tax should be 8.27%. How do I fix this before it happens again?
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Shopify Staff
Shopify Staff
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Hey, @Chelseainca.

 

Elias here with Shopify Support. Thank you for reaching out.

 

That’s so exciting! Congratulations on your first order! I can appreciate you for being diligent with your taxes and I can understand that the US taxes can be a little tricky, as each state has varying laws for collecting taxes. There’s a function that will automatically calculate the taxes for your store, this is kept up to date by our tax experts to help ensure you are collecting the correct sales taxes. Are you using this function in your store?

 

An important note is that not every out-of-state customer will be required to pay CA taxes, as the tax rate you charge is based on either destination state or origin state taxes. Though we can only provide technical support, as we are not professional tax experts -  I’m happy to share some resources that may be able to help you out. Our guide for taxes in the US, will help explain the tax sourcing in the US for destination state or origin state taxes. It’s also worth noting that some out-of-state customers, who do not need to pay taxes in CA, may be subject to pay import duties and fees in their state. ‘The Seller’s Guide to eCommerce Sales Tax’ by TaxJar is a great resource to help understand the sales tax in the US. That being said, if you believe you should be collecting taxes for your customer in NV, I do recommend speaking with a local tax expert to help make sure you are collecting the correct taxes and confirm this.

 

If you have any other questions or if a tax expert indicates that your taxes are incorrect, feel free to let me know in this thread and I’d be happy to take a look!

Elias | Social Care @ Shopify 
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Thank you for replying Elias. I think I am using the tax function for USA, in “tax regions “USA is “collecting “. Maybe the tax is not applicable for this purchase. I’ll cross my fingers that it’s working correctly and see what happens next time. Also, “Rest of world “is “not collecting “, do you know what the Number for the Country Tax is supposed to be?
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Shopify Staff
Shopify Staff
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Hey, @Chelseainca.

 

Thank you for the follow-up. You can create a test order using your address and see if the tax is being applied properly at checkout. Since your store is in CA and your address is within state, you should see the taxes applied before completing the checkout. It may be harder to check with out-of-state customers as the US tax varies by state, based on the tax sourcing. 

 

As for the Rest of world, it’s likely that you don’t need to collect tax from them as well. Unless you have a physical presence in a specific country, non-US customers are likely not required to pay US taxes as they are subject to import taxes in their country. That being said, each country will have a different country tax as well. For this reason, I would encourage checking with a tax expert so you can make sure that you are collecting the right taxes. 

 

If you have any other questions on taxes, don’t hesitate to let me know!

Elias | Social Care @ Shopify 
 - Was my reply helpful? Click Like to let me know! 
 - Was your question answered? Mark it as an Accepted Solution
 - To learn more visit the Shopify Help Center or the Shopify Blog

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