How does Shopify handle CA district sales tax collection?

johntreed
Tourist
3 0 2

I have been collecting CA state sales tax and Contra Costa County district sales tax on sales to customers who live in the same county as I do. Now Shopify is collecting those taxes on every CA customer regardless of where they or I live and they are making all CA customers pay about six district taxes regardless of where they or I live. Seems like that is incorrect. I need to talk to Shopify if I cannot get the answer here. But although I have used chat with Shopify recently, now I cannot find it anywhere on their web site. Currently trying to pay my quarterly sales taxes.

Thanks,

John T. Reed

Replies 5 (5)

johntreed
Tourist
3 0 2

Since no one else replied to this, I will reply myself. I called California sales tax—the government bureaucrats—1-800-400-7115.

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Unlike Shopify, they have a phone number. And unlike the image of bureaucrats, a guy promptly got on the phone with me.
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I could not figure out how to do my 1st 1/4 2023 return, but he said that since 10/1/2019, Shopify has been paying the tax directly to them so I do not have to. CA calls such companies “marketplace facilitators.”
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Really!?
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So I put Shopify on one of the nontaxable lines on the 1st 1/4 2023 CA sales tax filing form and sent it in owing n no money at all.
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I also searched for sales tax refund at the CDTFA site and got the form for getting a refund of the sales taxes I paid for the period 10/1/2019 through 12/31/2022. I filled that out, signed it, and snail mailed it to the address on that form.
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I still do not know why Shopify is charging every CA customer for sales tax in Los Angeles (2.25%!) and for my county tax for all CA customers, not just the ones in my county. They did not do that before 1/1/23.

spinspirit
Tourist
5 0 0

I'm having the same problem. However when I go to taxes in the Financial Summary and click on Taxes, it gives a report and in that report it says "not filed". This new tax stuff is making me loose my mind. I'm not sure if what the guy told you is correct. BUT if it is 

johntreed
Tourist
3 0 2

I have now talked to a third guy (Raj Kohli) at California Department of Tax and Fee Administration. He said the first guy I talked to there was wrong. Shopify is not a “marketplace facilitator.” Amazon is. Raj walked me through amending my first quarter 2023 sales return and I filed it and paid my taxes.
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Because I could find no way whatsoever to communicate with Shopify by phone or chat like I used to, I wrote a snail mail letter to the CEO of Shopify Tobias Lutke. I said your calculation of sales tax for my CA customers is quite wrong. Please fix it or tell me how. I also said I enclosed a sample of the incorrect sales tax collection.
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Then when I went to find one, there was no such order. All my 2023 CA orders had been retroactively redone correctly by Shopify. I recall no communication from Shopify telling me that, but I’ll bet they sent one somewhere.

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With regard to district tax in CA, apparently the law is your customer has to pay it through you to your (merchant’s) county and to the county where they live. So in my case, I charge all CA customers the state portion of the sales tax, then two Contra Costa County (where I live) district taxes and the district tax for my CA customer’s city and/or county.

 

One general complaint: I guess ending 800-number support and chat support save money on expenses and could thereby increase Shopify’s bottom line. But they overdid it. We must have some way to get support. Shopify is not the only fish in the online-store sea. If a competitor of theirs did not overdo cutting back on providing support to merchants, we should be moving to one of those stores to avoid finding ourselves in a screw-up like this one again and Shopify having nothing but an unlisted number for “support.”

rachelb5499
Tourist
5 0 3

I'm SO glad you posted this. We've always just paid/charged a customer for the CA tax and our local taxes to every customer...Not how it is now that you've mentioned below:

"With regard to district tax in CA, apparently the law is your customer has to pay it through you to your (merchant’s) county and to the county where they live. So in my case, I charge all CA customers the state portion of the sales tax, then two Contra Costa County (where I live) district taxes and the district tax for my CA customer’s city and/or county."

In fact, the form we get from California is a "short form" and doesn't even give a way to report all these random tax percentages for districts, etc. Do you mind me asking what form you use to report and did you find anything online to help you figure out how to fill it out correctly? (Almost all of our online sales ARE Marketplace Facilitator sales. We really don't make enough in CA sales on Shopify to pay for a monthly service like TaxJar so I'm doing my best to try to figure this out and pay what we need to this year to CA.)

FBUD
Visitor
1 0 0

Look for the Schedule A Excel Workbook located on the CDTFA website. You fill in the amount for each district and then upload the completed sheet.