This is our first year using Shopify, which we LOVE. Paying our State tax this month.
I noticed that our California orders are not calculating the correct County taxes. Just fulfilled a order in San Jose Ca and it only charge the California tax of 7.25%. San Jose County is 9.25% Yikes.
I can not find where I add county taxes to the program.
I have found a section in the Manual for Set up automatic tax rates. I do not have this option within my account. Can someone help me on how to change this.
I’m glad to hear that you have been satisfied with your first year using Shopify! Information on California’s state tax system is outlined in our documentation here:
If none of this helps, you may need to reach out to us for more account-specific support through our help center and log in to your account to create a support request.
I hope that helps! Let me know if you have any other questions.
Any word on this? Doing my state taxes for California now for Q1 2022 and noticed Shopify only collected county tax for half of the transactions? How am I supposed to file the standard 7.25% taxes when it didn’t pull proper county taxes?
If you have set up your store to collect taxes based on your Tax ID and location, then the correct tax should be applied to the orders. It’s worth noting that how and when tax is applied to an order may vary because:
If you’re unsure about whether the correct taxes have been applied, or you suspect that they haven’t been collected, you will need to consult a tax expert to confirm what tax you should be collecting and to see how to reflect that accurately in your store admin when setting up taxes.
Ultimately, Shopify does not collect or remit taxes on our merchants’ behalf as we are not a tax authority. We can only provide store owners with the tools to ensure they are tax compliant themselves.
Shopify does not have the authority to calculate, file, or remit your taxes on your behalf. We however provide you with tax reports and a sales finance report. If you need information about 1099-K forms and you use Shopify Payments, then our information on Tax reporting may also be helpful.
While there are no apps that I know of to do your taxes for you, you could certainly hire a tax expert to help you with that!
Where is it that you feel you are struggling most of all?
Could you please run through our guide to Setting Up US Taxes step-by-step to ensure that you’ve set up your taxes correctly?
I want to draw your attention in particular to the important point that if your inventory is fulfilled from a location that’s different from the address you have set in your Shopify admin at Settings > Store then you do need to create a location for your business. The Store details address is not used if you have created a location.
This is important because State, county, and city taxes are based on the origin of the purchase (the seller) but district taxes and total tax rates are based on the destination (the buyer). This is highlighted in our guide to California taxes.
Please let me know how you get on once you’ve double-checked all that please!
All of our products are fulfilled from Oregon. We have buisness owners
iliving in California and Nevada which counts as nexus. So we have tax on
for any purchase shipped to those states. All products are shipped from our
“location” to the customer. The only ones that are not shipped from us are
3rd party products that are drop shipped.
@tahoematt While I must reiterate that we are not tax experts, I should point out that:
As you can see, the location where you fulfill your orders is considered an important factor. Given that your business fulfills orders from Oregon and dropshipping, then that is not within California state and may account for why taxes are not being applied accordingly. What address do you have listed on the store? Is it based in California?
Moreover, if it is in fact California that you are liable to collect tax for, it should be noted that California uses a mixture of origin and destination sourcing rules. This means that tax may not apply for some states but be applied for others, depending on where you’re shipping to.
To be absolutely sure you have the tax rules set up correctly in your store you will need to check in with your local tax authority or a tax expert, not least of all because you appear to have several dimensions to your set-up including two owners, two states and dropshipping.
