Shopify is charging sales tax in cities where I do not have a store?

MJ_Stewart
Visitor
2 0 1

I have a small online store.  The only location of my business is San Diego, California.  Why is Shopify suddenly collecting city and district tax for some of my customers located in other districts in California?  My sales level does not meet the economic threshold ($500,000) to charge all district taxes.  I realize if a customer is in San Diego, it is Ok to charge them San Diego County taxes, but I do not know why Shopify is charging other cities/district taxes also.

 

How can I fix this?

Replies 9 (9)

Greta
Shopify Staff
1167 122 148

Hi there, @MJ_Stewart!

 

Thank you for your post, I'm happy to look into this with you. 

 

I first recommend checking over your tax settings to see where you are collecting taxes. You can find this by logging into your Shopify admin and navigating to Settings Taxes and duties and selecting United States in the Manage sales tax collection section. From that page you'll see which regions you're collecting taxes in and you can remove unnecessary ones. If you'd like to read more about US taxes on Shopify and the steps to setting up taxes in this help document

 

Additionally, when you are set to collect taxes in a certain state/region, Shopify automatically calculates which taxes to charge based on your information and the customer's location. If you do believe there's been a mistake, feel free to get in touch with our live support team through the Help Center and we can take a look at the order in question. 

 

Please let me know if you have any other questions! 

Greta | Shopify 
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MJ_Stewart
Visitor
2 0 1

Thank you for your reply, Greta.  My set up is correct, I still do not know why Shopify is charging CA district taxes if I do not meet the economic threshold of sales ($500,000).  A follow up question:  does Shopify provide a report showing total sales by Region, and City?  I see there is a Sales Tax Report showing totals by Region, Name, Tax Rate, and Amount Collected, but it does not show the Sales these numbers are based on.  How can I pull this information from Shopify?

CloudlabSam
Shopify Partner
556 46 92

Hi there,

 

You could start with the Sales Over Time report and set the date setting as follows with whatever date range you wish to report on.

 

Screen Shot 2023-01-17 at 9.12.53 AM.png

 

Then you can add the Shipping City and Region.

 

Screen Shot 2023-01-17 at 9.12.59 AM.png

PHB1US
Visitor
1 0 0

I only have Shopify Basic.  Is the Sales Over Time report included?  Or do I need to upgrade?

CloudlabSam
Shopify Partner
556 46 92

You would need to upgrade to the Shopify level to get the Sales reports.

 

You could also use our Report Toaster app to get this and a lot of other reporting. We have a free tier that might get you through for a while. Feel free to install and reach out to support if you need help.

Greta
Shopify Staff
1167 122 148

Hi there, @PHB1US!

 

Thanks for your question. Yes, as @CloudlabSam mentioned, the Sales over time report is only available on the Shopify plan or higher. If you're looking for a report to help you when doing your taxes, I recommend checking out this help document which goes over the reports that merchants typically use when remitting their taxes (and these reports are available on all plans).

 

If you have any more questions, just let me know and I'd be happy to help.

Greta | Shopify 
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Greta
Shopify Staff
1167 122 148

Thank you for getting back to me, @MJ_Stewart!

 

If you believe sales taxes are being charged incorrectly, I recommend getting in touch with our live support team via the Help Center so we can investigate the orders further.

 

For your sales report question, I recommend using the Sales Over Time report that @CloudlabSam mentioned as it will include the information you need. Alternatively, you can check out our help document on tax reporting to find the reports we recommend referencing for tax remittance (and these reports are available on all plans).

 

Please let me know if there's anything else I can help you with!

Greta | Shopify 
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volley44
Tourist
6 0 4

I'm having this same issue in Illinois (I don't even have a business address in this state).. I collect state tax, however out of state sellers aren't supposed to be charging city and county tax, however Shopify keeps charging city and county tax (not just the state tax) even though I didn't request this.  Online sales support doesn't know how to tix it.. Put in a ticket 30 days ago and just get new support reps that are completely clueless.  Please help!

Victoria
Shopify Staff
2221 152 259

Hi, @volley44.

 

Thank you for reaching out and joining the thread. 

 

I would like our authenticated Support to take a more detailed look into this, as the tax is not being charged correctly. If you already have an existing support ticket, I recommend replying directly to it. If you're unable to locate this ticket ID within your email inbox, you can create a new support request through the Shopify Help Center

Victoria | Shopify 
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