Sales tax not being applied to shipping and it should be.

[DHallberg]

In Washington State shipping is always taxable.  Since Shopify Tax kicked in, orders are not being charged tax on shipping. In Settings, under Taxes and Duties I do have the box checked to Charge tax on shipping rates. 

How do I fix this???

Editing to add:  I've been with Shopify for years and the main reason was because of how accurately taxes have always been calculated. So, I tell ya', thus far I am not impressed with Shopify Tax.

[Victor]

Hi @DHallberg,

Thank you for getting in touch about this and for letting us know that you've been experiencing this issue. I would recommend reaching out to our support team about this so that you can be authenticated on your store and this issue can be investigated further. If you could provide some examples of sales taxes not being charged on shipping fees that would be helpful; our support team will then be able to escalate this to our tax specialists if taxes are not being applied correctly.

[NCTA]

Hi Victor, we are also having this issue in our online shop. I've tried deselecting and reselecting the "Charge tax on shipping rates" box several times. We are receiving the email notifications that our settings have changed, but when we test a sale it is still not collecting tax on shipping for our state. I don't know how to reach a person to discuss this issue and have tried searching the support center but no answer to why it's not working for us.

[Anonymous]

I hate the new Shopify Tax system. I opted out of it. Unfortunately it won't return my account to the legacy tax version until January 2023 so I'm forced to "try out" this new system for another month, but at least it will go back to the original way soon, which has worked just fine for me for years.

[DHallberg · Accepted solution]

An update for you. I contacted the Washington DOR for some clarification. Yes, in Washington State, shipping is taxable, but ONLY on the portion of goods sold that are taxable. So, since my main product is tea, a non-taxable product, if the entire order is tea there will be no tax charged on shipping. You need to check with your particular state.

When I input orders into Quickbooks (or hand-calculate them) I now find Shopify Tax to generally be correct. If off, it is only by a penny or two. For me, the bigger annoyance is Shopify occasionally assigning the wrong tax district, but given Washington State has around 3,300 tax code areas, I'm not surprised. Over the course of a year the shortages and overages seem to nearly wash.

I hope this helps.

[Victor]

Hi @DHallberg,

Thank you for the update and for the feedback on Shopify Tax. It's much appreciated.

Please let us know if there's anything else you require assistance with.