How does shipping tax work in California?

[Alena5]

Hello!

I don't quite understand what "Shipping Tax" means and how I should set it. parameter! How will it work? I am located in California.

[Moira]

Hey @Alena5,

"Shipping Tax" refers to the tax charged on shipping fees. The amount of tax applied to shipping fees varies depending on the tax laws in your state or country.

For example, in California, sales tax is generally required to be collected on shipping and handling charges when the item being shipped is taxable.

You can set up shipping taxes in your Shopify store by going to Settings > Taxes and selecting "Charge taxes on shipping" option. You can then add a tax rate for California and specify how taxes should be applied to shipping fees.

Although we aren't tax experts and aren't able to provide tax advice, we do have some guides that you can read. Feel free to take a closer look at them below:

• US taxes reference
• How to charge sales taxes in the US
• Guide to taxes for independent contractors

While Shopify doesn't remit or file your taxes for you, we've recently launched a new feature called Shopify Tax, to help US merchants improve the accuracy of their tax calculations for local customers. If you're a new merchant, then this feature will have already been added to your store automatically, so I recommend going through our help guide here to familiarise yourself with the functionalities that Shopify Tax currently offers.

[Alena5]

Sorry, but I read all your articles, but nothing specific is written there. I still have more questions than answers. Do I have to set the tax rate myself? I thought the site independently calculates the tax depending on the state? I asked this question to my accountant, but she also doesn’t understand what exactly she wants from me on the site, because she doesn’t know the specifics of shopify.

[Moira]

@Alena5,

Yes, you need to set the tax rate yourself in your Shopify store. Shopify provides the option to set the tax rates for different states or countries, but you need to specify the tax rate that should be applied.

In Shopify, you can go to Settings > Taxes, and add tax rates for different regions. You have the option to charge taxes on shipping and handling, and also set different tax rates for different product types if needed.

It is recommended to consult with a tax professional or check your local tax laws to ensure that you are correctly charging and collecting the correct amount of taxes on your shipping fees.