Are Shopify's New York State tax rates not accurate?

cadnorltd
Tourist
3 0 2

Hello,

we are a New York State Vendor. Is anyone else having issues with Shopify not actually using the correct tax tables for sales tax collection. They make a big deal about their precision accuracy and all the confidence we should have but their rates are just wrong in multiple jurisdictions. The easiest example is NYC. They collect 8.5% tax but the actual tax rate is 8.875% Thereby losing us money on every sale. In addition their tax reporting is just horrid. Like they have never actually looked at what a vendor has to do to file a quarterly tax report.

Replies 6 (6)

ttornstrom
New Member
4 0 0

We have been in the same boat.... "support" has been completely worthless. Most of our items are Clothing which is tax exempt in NY, but they continue to charge sales tax and on top of that charge incorrect taxes for each county as well..... 

RobinNY
Visitor
1 0 0

We are a NYS vendor as well. We ship our products to many places within NY. We have learned that Shopify eliminated our sales tax override for the 80 counties/local jurisdictions in NYS when they migrated us over to Shopify Tax on January 2 2024. They gave no warning of this migration nor did they say that the sales tax override feature would be eliminated. Honestly, I do not think they even knew about it until their customers started to complain about incorrect tax being charged for orders shipping within NYS. At first they did not even acknowledge that it was an issue. Now they are saying they are working on a fix. I initially reported this issue to Shopify support on Feb 21st. The last I heard from them was about 1 week ago. Meanwhile, I am looking for another on-line store solution. 

JMNY
Visitor
1 0 0

Dear god I think I may have figured this out - I think the issue lies more in the tax reporting in Shopify vs. how the filing looks.

 

My assumption is: the reporting shows all 4%ish tax rates, including New York State. There is a jurisdiction for New York State/NYC combined, NYC alone, and New York State alone. In the reporting, we see all of these as well broken out. Curiously New York City line item in Shopify's reporting doesn't have its code mentioned (NE 8091) which always confused me.

 

If the counties are all 4%, and New York State is also being applied at 4%, that adds up to the 8%s on the Main Schedule for what's actually taxable (all of the clothing has been subtracted already). 

 

So as long as all counties are all input, and you break out the 4% line items for New York City and New York State, that should all add up correctly (provided Shopify has collected properly, which I've read quite a bit about - seems applying "Clothing" to the Product Category is what's most required to ensure proper calculation).

 

Not a tax pro obviously so take this with a grain of salt! Doing my best with the info I have.

cadnorltd
Tourist
3 0 2

Hello,

 

yes, their reporting is confusing as heck and when it comes to the NYC area it is even more confusing. However, with enough data massaging you can now make it work. The previous issues were that A) They were not reporting to us figures that would be needed to correctly report the tax collected and B) tax calculations were not correct. 

Imogen
Shopify Staff
1711 199 300

Hi there, @cadnorltd. Thanks for taking the time to reach out to the Shopify Community here regarding your tax set up. My name is Imogen. It's good to meet you.

 

I'm sorry to hear about these issues you're having with charging taxes for your orders. As Shopify Support Staff are not tax experts, we're unable to provide you advice on what you should be charging for taxes, but we can assist with helping you adjust your settings to make sure you're charging the correct amount.

 

Please reach out to our Authenticated Support Team so we can take the time to authenticate you, and have one of our advisors jump into your store and look into your tax set up so we can see how we can help.

Imogen | Social Care @ Shopify 
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cadnorltd
Tourist
3 0 2

Hello, while I appreciate the reply, 1 year later(!), I find this response a bit disingenuous. You do not need to be tax experts BUT you are running a business site that is collecting taxes on our behalf. No one here is looking for advice on what to charge for taxes! They are looking for accuracy on what IS charged for taxes. I understand you are not AMZ or EBAY but this is not a small issue either for vendors. The implications in terms of liability, time, expense, profit margins, etc are very real. I was not even going to bother responding since I do not have anything positive to add but a response from Shopify that is a year in the making was kind of annoying. You collect plenty of fees for your service and I do not feel like this is appropriate support for those costs. Ever since covid Shopify support has gone into the tank. Maybe spend less on advertising everywhere for new clients and some of that time and money on shoring up the base that you do have. Or not. This seems to be the way of software as a service. Start out new, better, more responsive, etc, build on the backs of the early adopters, stabilize, then once you have achieved critical mass all of that goes away in the rush to just get bigger, perhaps in prep for a takeover. The rest of us just keep dodging and weaving around the growth/collapse cycle that is this industry. Yeah, I am jaded.