How is California's local rate sales tax affecting your online store?

5 0 4

Any other stores out there impacted by the fact that Shopify Tax now charges sales tax based on local rates in lieu of the state rate irrespective of where your company is based?


My company is based in San Francisco. Any orders shipped to San Francisco are charged at the San Francisco sales tax rate. But any order outside of San Francisco should be charged at the California state rate (7.25%) per CDTFA: Since the switch to the new platform Shopify is now charging customers their local rate meaning that my store is now responsible for reporting sales tax by every city and county rather than a flat state rate. This has a significant impact and when I contacted Support today they didn't offer a workaround.


I want the old system back. It worked perfectly fine for my store.


Anyone else facing this issue in California or elsewhere?


- Lesley



Replies 5 (5)

59 2 16

Have you checked into modifying your settings in Shopify? I believe that you can override the collection and specify how much to collect. Shopify support should be able to help set that up.

2 0 1

If you sell $500,000 or more a year in California unfortunately you have to break down the sales by county and city.  I am trying to find the app that will work with quickbooks online and break this down when the sync happens?


5 0 0

Yes and I don't know what to do about it as I'm trying to file my quaterly return and hours later I'm still not done because I can't figure out what to do. It's saying I owe more than I collected and I"m not happy about it. I'd love to know what you ended up doing about this.


Shopify Partner
3 0 0

I am having the exact same problem. So I tried switching my "Tax sourcing" setting from "Destination (default)" to "Hybrid-Origin", but Shopify is still charging any Calif sale, the destination's local tax rate. 

59 2 16

We use a company that analyzes Shopify data and posts a journal entry for the collected sales tax amounts to our accounting system. Then they file and pay sales tax for us in all states. So far this has been very helpful. Feel free to message me if you want to know more about them.

We used Davo for a while for filing but that turned into a costly issue. I don't recommend using them for filing sales taxes.