Why is sales tax automatically refunded on pick up orders?

Haley-Jo
Visitor
2 0 0

My store has a nexus in NYS and i am registered to collect sales tax in NYS. For the last month or so, whenever someone places an order and selects “pick up,” sales tax is automatically refunded. I have searched the forums and many people are having the same issue, yet no one from support has come forward and addressed it. As a small business owner paying money every month to Shopify, this is inexcusable. Shopify needs to fix this issue immediately, AND reimburse me for the money lost from these orders that I am still responsible to pay to NYS Taxes. Also why is this the only way to contact support? I’m about to return to Woo Commerce to host my store because the support was much more responsive. Hope someone can rectify this soon. See photo. 

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Replies 5 (5)

nwaPLASMA
Excursionist
10 0 5

I was having the exact same problem and I finally got through to Shopify accounting department they explained every single order that I had a question about and every one of them made sense. I’d either not selected physical item for delivery or just didn’t understand how the tax calculation worked. Here’s some of the info I got that was helpful: 

 

It is not really a refund, it is just how Shopify Tax shows corrections in taxes that were overestimated.
 
In this case:

  • Our Basic Tax service overestimated taxes by 1%, or 37.50.
  • This amount was authorized to your customers credit card. 
  • When the rooftop accurate rate was applied at payment, this was rectified. The correct amout was collected from your customer, and the over-estimated amount shows as a refund on your payout and in the timeline. 
  • No amount was actually refunded to your customer as the correct amount was collected at payment. It is currently the best way for our system to display what is happening on these orders. 

 
If you have any questions on the above, please let us know by replying here!
 
All the best,
Merchant Tax Support

 

Sorry! I totally missed that you were asking about another order. Lets take a look at order 1874.
 
This order is for an item that was set up as non-physical. We can tell this as at the top of the order it says 'Shipping, Not required.' and lower down on the order, there is no shipping line.
 
An order for non-physical items is seen as a digital sale by the system. Digital sales are non taxable in many states. 
 
Our Basic Tax service quoted the standard tax rate for the customer's billing address. Then Shopify Tax registered the digital sale at payment and removed taxes accordingly. 
 
I see your note on the order 'For local pickup, call, text, or email us.' In this case, please set up the product as physical, and use Local pickup for online orders to have these sales taxed correctly. 
 
If you have any questions on the above, please let us know by replying here!
 
All the best,
Merchant Tax Support

Haley-Jo
Visitor
2 0 0
I’m glad they finally got through to you, but unfortunately all my products
are set up as physical using the pick-up option because they’re food items.
Hopefully the Shopify Accounting Team will get back to me soon, otherwise
I’m going to have to move to a platform with real customer service.
BreezyFile
Shopify Partner
21 1 1

Hey Haley-Jo,

Do you mind if I ask in which state you are located?  Is it possible that Shopify considers your items exempt and when you flip to in-store pickup, they are using your store's address as the shipping address and exempting your product?

matt@breezyfile.com

BrianaCreations
Visitor
1 0 0

Did you get any resolution? I also am out of NYS and just had a customer do a pickup order for 15 tumblers and after her checkout I got a notification of her sales tax refund of $18. Very frustrating to see! Any and all tips would be appreciated 

Pzcandiezshop
Visitor
1 0 0

I am in Texas and have the same exact problem with shopify refunding collected taxes automatically to the customer when taxes should be collected. All of my listed items are selected as “physical product”. Shopify system have been refunding all my orders except 1 order.