Shopify tax calculations seem off

Shopify tax calculations seem off

RiftRunnersTCG
Visitor
2 0 0

I have a "toy" product that is $59.99 dollars with $4.90 shipping. I have checked the "product" option to add taxes at checkout (I don't have taxes on shipping enabled). When I go to check out, the added taxes are about $4.55, which seems a little high. Sales tax in my state (GA) is only 4%, and both sender and recipient are in this state. So the tax should be almost half of what it's charging.

Are there extra taxes that Im not aware of? Or Does shopify just slap the same median tax rate on everything, regardless of your state? Am I going to need to get an app just to change these settings or is there something within shopify's settings?

Reply 1 (1)

BreezyFile
Shopify Partner
31 1 2

Hi @RiftRunnersTCG, Georgia has local taxes, so while the sales tax rate starts at 4%, it can actually get as high as 9%. In Georgia, when you ship a product to a customer, the sales tax is calculated based on the shipping address of where you're shipping the product, so the rate can change with every order you ship to Georgia, depending on the customer's address and what their local tax rate is. 

You don't need an additional app to handle sales tax, you just want to make sure that you're using Shopify Tax, you're collecting in Georgia, and you categorize your products. 

Let me know how else we can help!

matt@breezyfile.com