Weekend pop-up shop out-of-state...now website orders are charging tax to that state

[strw411]

Hello!

We’ve been using Shopify to host our website for a while, and everything is great. We charge tax in the state in which we have a nexus, and the sales tax calculates correctly.

We just created a location for a pop-up shop we have this weekend, but noticed our website is now charging sales tax to our online customers in that state. We don’t have a nexus there! We registered for a temporary sellers permit for the 3-day event, and at the conclusion of the event, we will no longer collect tax in that state.

Is there any way to get Shopify to STOP collecting sales tax on orders to this state from our website? At the conclusion of the event, we will deactivate the location and delete the tax from our “settings”, but during the event, we do want to charge it.

Additionally, our website adds tax to the product total. Due to the “cash” nature of the pop-up event, we like to build the tax into our price instead (so we are dealing with nice round numbers and not counting pennies on the fly). Can I set-up shopify tax settings to build tax into the price in one location, but add it on elsewhere? I know I can pick one or the other, but haven’t figured out how I can do both simultaneously.

Thanks
Ryan

[Victor_5]

Hi Ryan,

Thank you for reaching out on this and for providing a detailed explanation of your issue here.

When you’re selling in a state, even if it’s only for in-person sales, you will likely be required to collect sales taxes for all orders received during that period. This may depend on which state you’re selling and I’d recommend checking out this TaxJar article which goes over this in some detail. I’d also suggest speaking with a tax professional about this in order to be sure of your responsibilities when it comes to collecting and paying sales tax.

Once your pop-up event is complete, you can deactivate or delete the location after reassigning your inventory. However, you will still need to go to your tax settings and delete the location from here. Once this is done, sales tax charged to customers due to this location will no longer be charged. When you initially add a location it will automatically add it as a location in your tax settings, but it does need to be manually removed after the event.

In Settings > Taxes, you will see an option to “Show all prices with tax included” which you can check or leave unchecked. It is not possible to have this unchecked for online orders and checked for POS orders, unfortunately, however I will be able to submit this as feedback to our development team as I can appreciate this being a useful option for you.

I hope this has helped explain things but please do let me know if you have more questions!

Kind regards,

Victor | Shopify Social Care

[tax_pro]

Hi Victor,

I’m a state and local tax professional specializing in multi-state sales and use tax and have a question about using the tax option to “Show all prices with tax included” … When the option is enabled does the buyer’s receipt include a statement like “tax included in price” or something similar? If so what is the exact wording? The reason for asking is because the states that do allow a seller to include the tax in the price instead of separately stating the tax amount also require the seller to include a statement on the buyer’s receipt like “tax included in price”.

There are also plenty of states that do not allow this option but require the seller to separately state the tax amount. So does Shopify’s option apply to all states where the seller has enabled sales tax or can the option be enabled on a state by state basis?

Thanks in advance for your answers and helping me to better understand the tax features in Shopify.

Regards,

Jerry

[Victor_5]

Hi Jerry,

Thank you for your response. I’ll be happy to explain some of the tax processes within Shopify below.

Enabling the option to display prices with taxes included will have different effects on the POS and the online store, which I will detail separately. First, with this option enabled on the POS, you’ll see the listed price at checkout with a breakdown of the taxes below. I will provide you with an example from my test store for a $5 product:

This will show you a breakdown of the taxes prior to the sale. Once the sale is processed, you will then have the option to email a receipt to the customer. If you choose to do this, they will then receive an emailed receipt that also includes a breakdown of the taxes charged on the order:

You’ll notice here that there’s no message that states that tax is included within the price of the product, but this can be added in manually. If you head to Settings > Notifications in your Shopify admin, you will see a template called “POS and mobile receipt” - if you click on this, it will bring up the HTML template for this email that can then be edited. You can add in any verbiage you’d like here and it will then be included in all POS emails sent moving forward. To do this for printed POS receipts, head to Settings > Customize receipts within the POS app and you will see options to add additional text here too.

For the online store, the wording that displays will depend on the theme you are using. On my test store I have the Simple theme installed, and by default there will be a message saying “Tax included” when I visit the product page:

When I proceed to the cart, there is a message that specifies that taxes are included:

Finally, at checkout, there is then a message showing how much of the order’s total is tax:

This wording is very easy to edit and can be done through the theme’s language editor. I can get here by going to Online Store > Themes in my admin, and by then precessing “Actions” and then “Edit languages” next to the theme I want to edit. Once in the theme editor, if I search for “taxes” I will see the fields for three pieces of wording I have described above:

From here it’ll then be possible to edit the wording about taxes to include whatever is required. Like the emailed POS receipt, you can also edit the online receipt which is called “Order notification” in Settings > Notifications.

The option to include taxes within the prices of products is one that is site-wide, so it cannot be toggled on for some states and not others. If you were to enable this option in your tax settings, this would therefore apply to every product on the site and the POS, irrespective of where the customer is buying from. Generally we see US merchants not enable this option as it can’t be specified on a state-by-state level. I will however also submit this as feedback to our development team as I can see why this flexibility would be a big help.

I hope I’ve been able to explain our tax processes in more detail but please do let me know if you have any follow-up questions.

Kind regards,

Victor | Shopify Social Care

[LenaTBoutique]

Thank you for your response to the above question! I too wondered how to “inclulde tax in the price” for my POS. I wasn’t certain if I turned on this feature for my website that it would work for my POS too. I need it for POS, but not my website, so I do wish I could separate the feature for “website, POS or both”. Now I will always have to remember to turn it on for POS days and turn if back off when my pop-up is over.

I do have a question related to this. In the “include tax in prices” mode, does Shopify capture the tax that is included in the price under analytics like it does when tax is added at the end of a purchase? I need to make sure that the taxes paid are still being captured even when they are included in the price of the product. I hope my question is clear. Anxiously awaiting your response. Thank you!

[Victor_5]

Hi @LenaTBoutique ,

Thank you for your questions. Could you tell me a little bit more about your business, and why you want taxes to be included in your prices for in-person sales and not for online sales? With more information I will do my best to explain how best to approach your taxes set up in relation to your product prices.

In terms of your analytics, the amount of tax charged on each order will be reflected in your reports regardless of whether or not taxes are included in your prices or if they are added to your prices at checkout. We have more information on tax reporting on the Shopify Help Center.

[LenaTBoutique]

Hello! I’m going to respond to your question, “why you want taxes to be included in your prices for in-person sales and not for online sales?” At my pop-up sales (in-person sales) I hate dealing with coins. When tax is collected the total price inevitably ends up including change (coins). It’s a pain to take enough coins to make change when customers pay in cash and it take time to gather the correct change. If the tax was included in the price, I would only have to deal with bills, not coins. Understand? In other words, if something cost $5 with the tax included and the customer gives me a $10 bill, the change would be $5. But, if something cost $5 and with tax it is $5.35 and the customer pays with a $10 bill, I owe the customer $4.55, making me have to come up with $.55 in change. (coins) It would be nice to have this feature for POS only. Thank you.