Products with Taxable and Nontaxable Items

evergreengbco
Tourist
6 0 3

Hello,

 

I sell gift packages that include both nontaxable food items and taxable gift items. Is there a way that I can indicate the retail price of the taxable item(s) so that Shopify calculates the sales tax for that item only versus the entire gift package? If not, what would be the best solutions to work-around it so the customer is charged the correct sales tax amount?

 

In case it helps, my current theme is Debut and my website is: https://evergreengiftbasketco.com.

 

Thank you for your help!

Replies 13 (13)
builder51
Tourist
5 1 0

I have this same question, but I have not found a solution. Would you mind posting how to resolve this?

evergreengbco
Tourist
6 0 3
Hi!

I haven't received a solution for this yet from Shopify. I did try a bundle
building app but it didn't resolve the issue either as my choices were
still to either charge tax on the entire bundle or none at all.

I'm in California and consulted with our state tax department for guidance
for this "all or nothing" situation and was advised to charge sales tax on
the whole gift if the gift contained taxable items and remit the collected
tax to the state when I file my sales tax return. I assume these rules may
vary by state so I'd recommend consulting with your state too (if you're
not in CA). It's not ideal but hopefully there's a better solution for this
soon.
builder51
Tourist
5 1 0

Thank you for your reply. Seems like this would be an easy fix. 

Jroyce1180
Pathfinder
86 4 18

Hello, this is an interesting problem. I am a developer working on making an app for Shopify and was curious how common this issue was. Do you currently use any of the leading tax apps and do they have any facility to solve this? (TaxJar, Avalara, Taxify, etc.)? 

 

Jroyce1180
Pathfinder
86 4 18

Would it work if the shopping cart was split into two transactions - one with taxable items and one with the exempt items? 

builder51
Tourist
5 1 0

I don’t use a tax app. 

builder51
Tourist
5 1 0

This might work. My specific issue is selling gift baskets that are taxable and now I’d like to up sell customers by adding a gift card to their order that is nontaxable. 

Jroyce1180
Pathfinder
86 4 18

It sounds like you will need to customize your checkout procedure in order to accomplish this. See the Checkout API. Here is a diagram of the flow:

 

shopify-vault

evergreengbco
Tourist
6 0 3

If the gift card and gift basket are two separate products in one order, that should work with taxes being calculated appropriately for the gift basket only. I have a "create a gift" option where customers can add multiple items in one order and the tax has automatically calculated for the taxable items only. It is with pre-designed gift baskets that I have the issue since I can't separate the taxable/non-taxable products within the gift basket or manually enter the taxable amount when setting up the product. 

starcross
New Member
1 0 0

We are also located in CA and dealing with this same issue - and it's becoming more pressing, now that the Holiday season is approaching. Have you figured out a work-around, or has Shopify offered any suggestion? It seems hard to believe that this isn't a more common issue. 

 

Thanks!

 

evergreengbco
Tourist
6 0 3
I haven't received any new suggestions yet. I agree, it's hard to believe
it isn't a more common issue. It would be ideal if there was a field to
enter the taxable amount. I can't imagine it's just CA.. For now, I'm just
following the guidance from the state.
Bellagala
New Member
3 0 0

We're having this issue as well. We're bundling together products which consist of taxable/non-taxable services & products related to wedding. (i.e. a wedding photographer & DJ package that is one product, but the DJ is non-taxable & the photography is taxable). We're located in MN. 

electronicsound
New Member
1 0 0

We need a solution to this problem too. One product containing taxable and non-taxable elements. Or a bundle of products with tax on some and not on others...