Accurate Online Sales Tax Calculations

April 2019
pennies for the taxman
Pennies for the taxman.

While online sales have traditionally been free from sales taxes, recently states have been implementing complex online sales tax rules in the wake of a 2018 Supreme Court ruling allowing them to do so. Most states still don’t require sales tax on out-of-state purchases (unless the business makes more than $100,000 in sales in that state each month). However, many states are now requiring sales tax on all in-state purchases, and the sales tax rates are dependent on the customer’s city and county address, not the business address. This has caused a nightmare of complex sales tax calculations and submissions – particularly burdensome to small businesses such as ours.

Fortunately, our WideRange Galleries websites can now help alleviate some of this burden with seamlessly integrated TaxJar address-based sales tax calculations in the shopping cart. This is an optional feature for WideRange Galleries websites; if you want to activate it, just go to the Cart Settings page in the admin and choose the option to charge sales tax. Once you do that, you need to set up a few configuration settings on the Sales Tax Settings page, then you’re all set! You don’t need to have a TaxJar account or pay any additional fees; it’s already all integrated and included.

Once you activate sales tax, your customers will see a shipping address form in the cart which they will fill out prior to payment checkout. The cart checks if the customer’s address is in your state, and if so it will calculate the exact tax amount based on their shipping address, including the exact city, county, and state tax rates. The accurate sales tax amount is then listed and added to the cart total prior to payment.

Additionally, since sales tax is typically only charged for physical shipped goods and not services, you can turn off sales tax on a product-specific basis. For example, if you sell workshops on your website, you’ll want to turn off sales tax for those items on the Products > Modify page in the admin. Digital products are taxed in some states but not others; refer here to find out if your state charges for digitally downloaded products.

Whether or not you choose to charge sales tax is up to you. If you make a lot of in-state sales, particularly with numerous small dollar items, then charging accurate sales tax will be hugely advantageous. On the other hand, if you mainly do out-of-state sales and/or big ticket items, it might be simpler to just not charge sales tax and absorb any sales tax fees that you may owe each month.

* If you are using Stripe for payment processing, in order to charge sales tax you must configure your business address in your Stripe account. See here for Stripe sales tax configuration instructions.

Please contact me if you have any questions!

Posted in Features and tagged Sales.

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