Application of tax for dropship wholesaler in California (Shopify Tax, Avalara, etc.?)

Shopify Partner
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I'm looking to see what others in the same situation are using to solve the issue, since it doesn't seem like this is something Shopify Tax can actually handle.


This is for the dropship wholesaler in California, not the retailer dropshipping goods they do not stock.


California tax code states "A drop shipper may calculate the amount subject to tax based on their retail selling price of the tangible personal property plus a mark-up of 10 percent".


This means we're essentially asking Shopify to perform two different calculations for the cart at once. The first is to sell the product at a discounted price to a wholesale customer, and the second is to charge the customer tax based on that wholesale price plus 10%. Of course, this is nexus-based but that should be assumed since we are way beyond that at this point.


Can anyone confirm this is a situation Shopify Tax can or cannot handle? What about Avalara? Other solutions?

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