(Urgent Bug) Shop App Tax Issue for Refunds & Exchanges

Payments + Shipping & Fulfilment
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Topic summary

A critical tax calculation bug has emerged following the mandatory sales tax collection implementation by Shop App on January 1, 2025.

The Issue:

  • Orders placed before 1/1/2025 are being incorrectly taxed when processed for exchanges in 2025
  • When merchants edit pre-2025 orders to exchange items, the system automatically adds taxes that cannot be removed
  • This affects transactions that should be exempt from the new tax requirements

Example scenario:

  • Customer orders Product A (yellow) on 12/1/2024 (no tax)
  • Customer requests exchange for Product A (blue) in 2025
  • System incorrectly applies new tax rules to the original pre-2025 transaction

Urgency:
The reporter warns this could result in widespread incorrect tax collection and potential legal liability for Shopify if not resolved immediately. The discussion remains open with no resolution provided.

Summarized with AI on November 2. AI used: claude-sonnet-4-5-20250929.
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Serious and urgent issue with the new imposition of mandatory sales tax collected by Shop App starting 1/1/2025.

If a customer placed an order before 1/1/2025, but would like to exchange an item, they are now being incorrectly taxed for the order.

For example, a customer places an order on 12/1/2024 for a Product A in a yellow color. Then, in 2025, the customer writes back to exchange Product A for a blue color. When I edit the order to exchange the item, taxes are now added to the order and there’s no way to remove it.

This is a bug and needs to be fixed ASAP. Otherwise, there’s probably a big class action lawsuit waiting for Shopify for all the miscollected taxes for transactions that took place before 1/1/2025.