Why does Shopify charge Carlsbad city sales tax instead of Eddy county tax?

edcorusa
Excursionist
21 0 26

So, I have a few issue with the way Shopify does sales tax. My company is in Eddy county New Mexico. Our address is for Carlsbad, New Mexico, as so as it is the nearst city to our store. We are requiered by the state to charge Eddy county sales tax. But, for some reason Shopify says Carlsbad City sales tax. Not only does our Shopify store says the Carlsbad city sales tax to our customers, Shopify also charges me the city sales tax for their service and app and not the correct county sales tax. I have contaced Shopiy about this, and all I get is that they have their tax team looking into it. This has been going on for almost a month now, with no update. I get that the team is looking into it, but they can not give me any time frame of when they might reach out to me about it.

Now, I have been told that I can create a sale tax override for the customers in my state to reflect the county sales tax. Well, there are two problems. One, the override keeps round the tax rate and not using all of the decimal places. The second is that I would still be charged the city sale tax for Shopify services and apps.

As right now I can not get the wright sales tax for New Mexico customers and Shopify support, more or less, says "Sorry, you will just have to wait". This is not a way for a company to do business, when one of the primary part doesnot function right and does nothing about it.

Does, anyone have the same issue? Has anyone gotten a respone from Shopify about this?

Replies 6 (6)

CodySandone
Visitor
1 0 1

@edcorusa Did you ever get a resolution to this? I have a similar situation. 

 

My business is in an unincorporated part of the county, but Shopify is charging an additional 3% city tax automatically. They are telling me that there is no way to remove a city tax from their system so I have to continue to charge my customers the wrong sales tax. 

 

They literally told me on support chat that they cannot get that granular to remove that city so I need to figure out how to account for this on my books with my accountant. Their solution is to overcharge my customers a tax that should not be applied and just figure out the books. 

 

It is completely ridiculous so I'm really hoping I can find someone that was able to fix this problem properly. 

Candicesin
Visitor
2 0 1

I have the exact same issue! Did you ever find a solution? 

edcorusa
Excursionist
21 0 26

No, as of today they still do not supply the correct sales tax. I have had this issue also with QuickBooks Online and Amazon.com. They are pulling tax rate by zip code. So, is the zip code covers multiple sales tax regions, they are worthless. The only solution I have had is to go into and add a manual override tax rate. This will help your customers, but when Shopify bills you for their web service and any apps you have, they tax you the wrong rate. As to the state I am in, collecting more sales tax then required is a illegal. Not sure how they get away with it.

bcwaccounting
Tourist
4 0 4

I also have a similar issue.  I'm in Manhattan, KS, which spans two counties - about 75% of town is in Riley County, and the remainder is in Pottawatomie County.  My brick-and-mortar store is in Pottawatomie County, but Shopify is charging Riley County taxes.  It happens that the two counties currently have the same rate, so I'm not charging my customers the incorrect amount, but 1) the taxes are labeled incorrectly when I go to file my sales tax return, and 2) there's no guarantee that the tax rates in one county or the other won't change.

 

I have a customer that I ship to regularly that lives south of Topeka.  According to the KS Dept of Revenue, he's in the Shawnee County tax jurisdiction, but Shopify incorrectly charges Topeka tax rates.  I have similar issues with about one out of ten orders that I ship.

 

We frequently sell at a local farmer's market, which happens to be in a special tax district.  Shopify will charge the state, county and city rates correctly, but I cannot get it to charge the special district's taxes.

 

We've been using Shopify for 18 months, and I've gotten no resolution to these problems.  I spend HOURS each month looking up the correct taxes due and comparing that to the taxes we charged, especially on the orders we ship (each, of course, in a different tax jurisdiction), so that I report the correct taxes to the State.  I'm amazed that there are so many orders that are incorrect.  This is a huge liability that Shopify is exposing all of us to.

 

I'm giving up on Shopify getting it right.  I'm now looking for an app that will use an external sales tax lookup tables, to charge the correct tax rate.  I'd be grateful for anyone's suggestion on apps to consider.  My base criteria: It needs to charge my customers the right tax rate in real time, including on sales through Shopify POS, and it needs to be reasonably priced.  Does such an app exist?

edcorusa
Excursionist
21 0 26
I have looked at external tax Nexus co
Companies and have not found one that charges the right tax. Even Amazon.com charges the wrong tax rate for to me. QuickBooks is the same. Shopify uses an external company for the tax rates. It is the external companies that have the wrong information. It is dumb that they want us to charge sales tax but do not offer any way of doing it correctly. It is the whole system that is in wrong. What we should be doing is charging customers the tax rate for the place of business, not where the customer is. The taxes should be going to support the location where the business is, the road and etc. A website should be classified and just a store front for you business location.

cnrtncy
Visitor
3 0 0

I have same issue. Any solution or workaround about this problem?

 

My country’s tax rate was 8% lately and just changed to 10%. Although I changed manually to %10, Shopify calculates on checkout page like %9.134 lol. Not 8% and not 10%.