Shopify Taxes

[mec720]

I just started selling on my online store. We are based out of New Jersey and are registered to collect taxes in NJ. However, I sell mostly clothing and some accessories. In the state of NJ, clothing is tax exempt. I have categorized all my products to reflect clothing and accessories where applicable.

However, I've experienced some issues with the way Shopify charges my customers taxes. For some orders made within NJ, it does not charge taxes on the clothing items (which is accurate), however, there have been some orders made within NJ that it charged taxes on even though all the items were clothes and they were ordered and delivered to a NJ address. 

Has anyone had a similar issue? I don't want to inaccurately be charging my customers tax when there shouldn't be tax charged because they are in a tax exempt state. I was under the impression that Shopify sorted this issue out for you (especially after categorizing your products), but maybe I am wrong and have missed an additional step.

Appreciate the help! Thank you!

[Elias]

Hey, @mec720.

Thank you for reaching out and bringing this to our attention!

If you're seeing that the tax override is working for some orders within NJ, then it's safe to say that the clothing tax override was setup properly. However, as the sales tax is affected by several factors in the US, then this may also be an expected behaviour and we may recommend consulting with a local tax advisor. 

In the US, the sales tax that you should charge is affected by the following factors:

• The location that your product is shipped from
• The location that your product is shipped to
• Where you're registered to collect tax
• Item taxability
• Buyer exemptions

That being said, if you're confident that some of these orders have been charged the wrong taxes, then it looks like we'll need to access your account in order to get a closer look at the affected orders. While we're unable to provide account-specific support via the Shopify Community, we'd be happy further assist you through live chat or emails. Please visit the Shopify Help Center and login to your account to create a support request.

I noticed that you're a new member of our Shopify Community! Once you've resolved the tax issue with our live support team, I'd love to hear more about your experience so far and share some resources to help you get started. Do you have a marketing plan prepared for your clothing and accessories store?

[SKU]

We are experiencing the same issues recently.  Some NJ orders were processed without sales tax and some NJ orders were charged with sales tax.  This just started happening recently.  Do you have any further explanations or solutions?

[Elias]

Hey, @SKU.

Thanks for joining the thread and posting this question.

I understand that you're seeing some discrepancies with the sales tax for orders placed in and/or from New Jersey. However, it's important to note that there are several factors in the US that determines how the taxes are calculated, and this can vary between states. These factors include: 

• The location that your product is shipped from
• The location that your product is shipped to
• Where you're registered to collect tax
• Item taxability
• Buyer exemptions

If you'd like to learn more about tax liability, then we'd recommend taking a look at our guide. Nonetheless, we'd encourage consulting with the local tax authorities or a tax professional in order to verify that you're charging your customers the correct tax rates and ensure that you're filing and remitting your taxes correctly.

That being said, if you believe that your tax rates are correct and there's an error on some of these orders, then it looks like we'll need to access your account in order to get a closer look at the problem. While we're unable to provide account-specific support via the Shopify Community, we'd be happy to further assist you through live chats. Simply visit the Shopify Help Center and login to your account to create a support request.

I noticed that you're a new member of our Shopify Community as well and I'd love to hear more about your business. What types of products are you selling? Do you have a marketing plan prepared for your store?