Financing, tax rates, and accounting
I sell custom made musical instruments. I collect a deposit when the order is placed, and collect the remaining balance when it is completed and ready for delivery. Let's say the item is $10,000. I will collect a $2500 deposit initially and the remainder is due prior to delivery, a few months later. The deposit is not a "physical item" and no sales tax is collected on it. When I prepare an invoice prior to final delivery, the balance due is $10,000 minus the $2500 deposit = $7500, plus sales tax. I add the previously collected deposit as a "discount" as there doesn't seem to be anywhere else to add it. The Shopify invoice will only calculate sales tax on the $7500. Is there a way for it to calculate sales tax on the full $10,000 amount? For this example, let's say sales tax is 10%. The customer should be charged $1000 in sales tax, but Shopify will only add $750.
Another small complaint: on that invoice, since the previously collected deposit is listed as a "discount", the generated email invoice will say "You saved $2500!" which is not true.
Thanks in advance for any advice!!
Thanks so much for taking the time! I really appreciate your help. Here is what I don't understand, and maybe you can help me with this. I already have a "product" called "deposit" which is how I collect the initial deposit - in this hypothetical case $3000. It is fulfilled when the customer pays the deposit. If I create another "deposit" for 0$ and apply a $3000 payment to it, then I will have two $3000 payments in the system which will both be included in our gross sales and will affect our accounting and our income taxes. Maybe I don't completely understand your workaround here. Is there something that I am not understanding? Thanks again.
It seems that the person who offered advice, who I was replying to above, has removed their reply. They had recommended making a 0$ deposit product, adding it to the invoice, and marking a $3000 payment to it. Does anyone else have a possible solution? Thanks in advance.
June brought summer energy to our community. Members jumped in with solutions, clicked ...
By JasonH Jun 5, 2025Learn how to build powerful custom workflows in Shopify Flow with expert guidance from ...
By Jacqui May 7, 2025Did You Know? May is named after Maia, the Roman goddess of growth and flourishing! ...
By JasonH May 2, 2025