Sales Tax Exemption By State Instead Of Blanket Exemption

Sneiv
Excursionist
17 1 18

We sell both retail and wholesale. Meaning that some customers submit state issued resale certificates to us for tax exemptions.

 

When a customer sends us a state issued resale certificate we set their account to tax exempt - the resale certificate laws allow us to do so in the state for which the resale certificate is issued. The problem is that this exemption is a blanket exemption and if the customer ships into a state different than the one that the one that the resale certificate is issued for they are not charges taxes when they should be. In the event of a sales tax audit, we then become liable for the sales tax (plus penalties and interest) on that order that was not collected. 

 

My question is this: Is there a way to exempt by state instead of blanket for all states? If not-  this is necessary feature, can it be implemented?

Replies 5 (5)

RebeckaGreene
Visitor
2 0 0

Were you ever able to resolve this issue? 

Sneiv
Excursionist
17 1 18

Yes, Shopify implemented a state-by-state exemption in the tax exemption portion of the customer profile.

RebeckaGreene
Visitor
2 0 0

I appreciate your quick reply. I logged into our Dev store (we are working on creating the store now) and I don't see that as an option. Do you know if that is an app or what version you are using for Shopify, we are using Shopify Plus. When I select Tax settings all there is, is a check box for Collect Tax. 

Sneiv
Excursionist
17 1 18
It's in the customer profile, not settings.

mattrlovelace
Visitor
1 0 0

I work for a contract manufacturer in TX and there are some caveats on sales tax exemption for items used in manufacturing. I purchase parts from several marketplaces. There are guidelines for what is exempt from tax, but they must be interpreted.  In my case, it is not a blanket on all items. I don't know about items for non-profit companies, teachers, and so on. If other states are similar, it can get tricky.

 

Did everyone get a sales tax certificate from each of the 45 states that tax online purchases?

I am planning for setting up my store.