Why is sales tax instantly refunded after order completion?

Twoskip
Tourist
5 0 2

Hello,

 

We are having some issues with sales tax being partially refunded automatically. We have a nexus in New York. The sales tax that is being in NY is being instantly refunded to the customer once the order is completed.

 

In our settings I have "this product requires shipping" on all varients, so why is it refunding that portion of sales tax after the sale is complete?

 

This is stressful as a small business owner as I will now have to cover all taxes obligations that have been refunded.

 

Thanks,

Screenshot 2024-01-28 at 8.38.56 PM.png

Replies 5 (5)

nwaPLASMA
Excursionist
10 0 5

Same issue here. Just happened today on a order placed 30m ago. Customer billing address is Arkansas (my nexas) so it should’ve charged tax but it refunded it.  I would attach a pic but it says jpeg not supported : /

Bradley21
Tourist
11 0 0

I am having the same issue. So what is the fix?

nwaPLASMA
Excursionist
10 0 5

I've been chatting with support and they haven't given me an exact answer yet, just keep explaining how the system figures tax. Question; do you know if this sale is to a town/city that shares a zip with another town city and those two have different tax rates? For example, the customers physical address is town A, which shares a zip with town B but has a different tax rate, but they list town B as their address on the order? Shopify uses rooftop calculations, not zip based calculations, I think this may have something to do with this issue.

Oldfire
Shopify Partner
21 2 1

Hi there! If you'd like an alternative refund method, you can also instead of cash refund store credits instead. What it solves here is the tax issue as you can set yourself exactly how much are you refunding (whether you'd like to include tax or not), plus accounting-wise you keep money in your business (and generate some extra by getting customer back into the store). Cheers!

Angie_Stiles
Visitor
3 0 0

Hi, Have you found a solution to this issue yet. I've been having the same one. My test-orders show it's charging sales tax, but then Shopify is deducting it after the order is complete.