My company is located in MN. I have economic nexus in about13 states, including CO. I don't have a physical presence in CO. I do have economic nexus. When setting up CO in the tax settings I am forced to enter a zip code where I have a physical presence. To get around this I just added a random zip code so it would start charing taxes in CO. Is this the wrong thing to do or what Zip code should I enter?
I recently found an error where an order shipping to a certain CO zipcode didn't use the zip code of the SHIP TO address. Rather, it used the zip code I entered in the settings when I setup the CO sales tax info. Ofcourse the taxes were calulated incorrectly and I had to refund this customer some of the taxes.
I noticed other orders in states are pulling the SHIP TO zip and calculating the correct tax rate.
Did I set this up wrong?
This is outlandish! This all requires time to be built into shopify and the supplier's apps/platforms. It shouldn't be the burden of the seller to calculate and input and build for the online store every possible sales tax nexus! In fact, it needs to be the customer's responsibility to enter their zip code and know their sales / use tax for that zip code, or the jurisdiction, etc. That would make the whole thing more efficient if the bill continues and doesn't get stamped out, which it should imo...it's reckless and overbearing. A simpler tax solution needs to be created in the law books, not this Wayfair gov pyramid scheme! If interested, here's a link to help with figuring stuff out that I found after discovering the sales tax nightmare that was initiated in South Dakota (imagine that, one state supreme court ruling deciding the future tax system of other states which were more than happy to oblige). I'm a new seller too, so the information is important since this new law is being thoroughly, yet egregiously enforced.
Since the Wayfair decision many companies are having the very same problem, physical presence is not the only criteria to have a nexus and it's tricky to set up. I'd recommend you to use a piece of software that calculate state and local sales taxes automatically such as Quaderno.
Quaderno automatically charges the right sales tax rate in every sale, updates the them when they change, and notifies you every time you surpass a sale threshold. Also, with Quaderno tax reports, tax filing is a matter of minutes not hours.
Disclaimer: I work at Quaderno. If you have any questions, please feel free t reach out. I'm happy to help.
i have the same problem and a question that if we collect sales tax for all states by the help with Quaderno, how do we deal with the money we collect of those states not surpass the threshold?
I'm working with a client who has economic nexus in 30+ states and needs to automatically calculate the tax to charge on products. However, there appears to be a hard limit on locations you can create (and reference in Shopify). Will Quaderno work around this limitation such that a customer is charged the correct tax in each economic nexus location?
With our Shopify integration, we apply the tax rates that Shopify applies in their checkout, so the client would need to be able to set up those tax rates for all of those states in Shopify first. If Shopify doesn't allow all of those states to be registered at once, this is something that would have to be addressed will Shopify.
As Shopify already offers their own tax calculator, unfortunately Quaderno cannot overwrite this with our own calculations and updates. This is a technical limitation from their side that doesn't allow third parties to modify the tax rates.
Quaderno automatically keeps track of your Shopify sales and notifies you when you reach an economic nexus threshold in a US state or a sales tax registration threshold in another country. Quaderno lets you know when taxes change, creates reports, and sends tax compliant invoices for your Shopify sales.
Should you need more information, please contact to firstname.lastname@example.org
Hope this helps!
I just asked Shopify (again) if their developers/engineers would upload my .csv file for our nexus, especially since California requires remote sellers to capture all local & special tax districts, which can only happen in Shopify if we enter every zip code. They again deferred and said they would forward this request to their developers. I've seen this same request by others as far back as late 2018. We have 24 nexus states and to get our Shopify tax collections to match Avalara, we need all nexus state zip codes in Shopify!
We use Shopify and Avalara as well but sometimes the link breaks down and it defaults to shopify, it appears. We are trying to figure out how many zip codes we can load in there as well in case it uses shopify to calculate instead of Avalara. Hopefully they can get back to you on this asap!
Shopify recently set up Destination-Based sales tax. If you're open to having all your nexus states destination-based then they can modify it on the back end. You just select your nexus states and they will charge that state's applicable tax rates. You'll have to contact support to have it set up.
Shopify recently created destination-based set up. You have to notify support you want to have it set up and be willing to have all your nexus locations destination-based. Then you just select your nexus states. It came after we spent lots of money paying someone to enter all the zip codes in our states but at least it's here going forward!