Sales Tax

[Joseph42]

Customer is Sales Tax exempt, How can I deduct the sales tax from order?

[Dirk]

Hey, @Joseph42 

Great question. Has the customer already placed the order and wants the difference back to their account. Or are you preparing to invoice a customer via draft order?

If there is anything else I can help you with, please let me know.

[Joseph42]

Customer placed order, However we have not yet received the payment. Is there a way to remove the sales tax before receiving payment?
Thank You for responding
Joseph

[Dirk]

@Joseph42 In this case, you would want to issue a partial refund for the order once the order has been paid for by the customer. This allows you to refund back the difference in sales tax back to their credit card. You can learn more about issuing a partial refund in our guide.

Let me know if this helps. If there is anything else I can help you with, please let me know.

[Joseph42]

Dirk thanks, however Sales tax can not be zero’d out. Can a clause at checkout perhaps ask “Are you exempt from Sales tax, with a checkmark, and that will prevent the Sales tax being charged. Of course if we don’t receive the Exempt certificate, order will only be processed as is, upon receipt of Exemption certificate. If customer does not provide certificate, sales tax will added manually, before receiving payment.

[Sam-123]

Hi Dirk, please fix this huge SALES TAX ISSUE! Partial refunds don't adjust the correct sales tax!!

This is so unbelievable that I need to even explain this issue, it's 2023!! 

I made a screen-share that outlines the problem in clear detail. -  https://www.loom.com/share/bffc884184f140d69513171cc7e9fae2 

I feel bad for all the merchants that don't realize this is happening on Shopify. If any merchant remits the sales tax based on what Shopify says under Tax Reports they are over paying sales tax!! Essentially because Shopify doesn't do this, it's ripping off merchants without them even realizing it. 

When giving a partial refund to a customer, Shopify DOES NOT subtract the appropriate amount of sales tax which means sales tax remains the same in the reports even though a portion of this sales tax was refunded to the customer.

This results in two HUGE Problems in the Shopify Reports!!

1. Since sale tax is unchanged, its always over-reported (remitting this amount would be overpaying and ripping off merchants)

2. Shopify takes this amount out of the net amount which under-reports net sales. This means that net sales are always under-reported. 

For another example, lets say a customer is exempt from sales tax and made a purchase, then requests a refund for this amount. Let's say the sales tax is $200.

Since you can't subtract the sales tax amount Shopify will take this $200 out of net sales instead! So now sales tax will be inflated by $200 and net sales will be ROBBED of $200.

This is so unbelievable that I need to even explain this issue it's March 2023!! 

Please @Shopify I pray you read this and understand this glitch/issue on your platform.  My screen recording outlines this issue in clear detail.

[Sam-123]

It's a huge flaw on Shopify as Shopify doesn't allow you to subtract sales tax out of partial refunds.

I attached my response to Dirk below. I hope it gets fixed.