After my original post below I finally got a hold of the tax department at Shopify and they were able to explain all of this order by order in a way that made sense. Here’s some of the info I got that helped me understand how this works. I had either neglected to set up an item as a physical item that required shipping or I just didn’t understand how the tax calculation worked.
It is not really a refund, it is just how Shopify Tax shows corrections in taxes that were overestimated.
In this case:
- Our Basic Tax service overestimated taxes by 1%, or 37.50.
- This amount was authorized to your customers credit card.
- When the rooftop accurate rate was applied at payment, this was rectified. The correct amout was collected from your customer, and the over-estimated amount shows as a refund on your payout and in the timeline.
- No amount was actually refunded to your customer as the correct amount was collected at payment. It is currently the best way for our system to display what is happening on these orders.
If you have any questions on the above, please let us know by replying here!
All the best,
Merchant Tax Support
Sorry! I totally missed that you were asking about another order. Lets take a look at order 1874.
This order is for an item that was set up as non-physical. We can tell this as at the top of the order it says ‘Shipping, Not required.’ and lower down on the order, there is no shipping line.
An order for non-physical items is seen as a digital sale by the system. Digital sales are non taxable in many states.
Our Basic Tax service quoted the standard tax rate for the customer’s billing address. Then Shopify Tax registered the digital sale at payment and removed taxes accordingly.
I see your note on the order ‘For local pickup, call, text, or email us.’ In this case, please set up the product as physical, and use Local pickup for online orders to have these sales taxed correctly.
If you have any questions on the above, please let us know by replying here!
All the best,
Merchant Tax Support