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#1 07-05-2018 21:48:41

jonaha
Member
Registered: 11-01-2006
Posts: 189

Sale Tax

We the new requirement to collect sales tax in every state. Will there be a plug in for V9 to be able to collect the tax based on zip code?

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#2 07-06-2018 07:05:42

webmaster
Administrator
From: York, PA
Registered: 04-20-2001
Posts: 19144
Website

Re: Sale Tax

That is not necessary.  Just used System / Component / Settings / Tax Settings to check off the localities in which taxes should be charged.  Also, enable the Tax Nexus setting there.  You can check the rates for localities using System / Localities / States and Provinces.


Nick Hendler

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#3 01-04-2019 12:18:05

Iceit88
Member
From: Erie, PA
Registered: 11-19-2003
Posts: 543
Website

Re: Sale Tax

Nick, any further thought on this given all the recent changes?  Some locations such as California have district and city taxes that may need to be taxed in addition to the state rate if certain sales thresholds are met. The tax is different all over the state, and if you meet the threshold.  Also, individual products may be taxable in one state now and not another.  A plugin could allow rates and products to accurately be taxed in the thousands of locations a larger seller may now need and also make reporting and filing easier.

Also, wondering how others that may now have an Economic Nexus in additional states are handling this in the software?


Bryan

Hat Trick Sports, LLC


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#4 01-04-2019 16:50:13

webmaster
Administrator
From: York, PA
Registered: 04-20-2001
Posts: 19144
Website

Re: Sale Tax

K9 operates with the ability to use Nexus or not.  When it's using Nexus, for items to be taxable they have to be shipped from and to a taxable location.  When Nexus is off, for items to be taxable they have to be shipped to a taxable location (origin doesn't matter).  Further the software has the ability to add state/province entries for municipalities that require different tax rates to be applied within states (New York is a prime example of this).  We're pretty much covered in K9 no matter which scenario you're running into.  Based on your explanation, I think you're looking to run with Nexus on.


Nick Hendler

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#5 01-04-2019 23:29:47

Iceit88
Member
From: Erie, PA
Registered: 11-19-2003
Posts: 543
Website

Re: Sale Tax

Thanks, that helps a bit but I still have some issues that I believe may not be addressed in the software.  With the new Economic Nexus laws, we now will need to collect sales tax in California (which we have no physical location) and Pennsylvania our home state.  Sounds simple but far from it.  It is possible with a little more growth this will jump to 5 or more states in the near future. 

Here is issue 1: For at least 1 product we sell the item is tax exempt in PA but taxable in California. I don't believe the software can account for this?  This gets more confusing as additional states may be added to the tax collection mix.  What is taxable in 1 state may not be in another where a company has nexus.

Second Issue: To make things worse it is possible (still need to run some data to determine this requirement for our company) that depending on a customers location in CA the tax rate could be different based on their ship to location (City, District, Zip Code possible even to the street level??? https://www.cdtfa.ca.gov/taxes-and-fees … m#Retailer ).  I understand if we had a fixed location we could add an additional tax location in the software to collect at that rate, but how can it determine in real-time (similar to shipping rates) the tax needed on an order.

Scenario:
Product A shipped to a customer in PA Tax Exempt Product, not taxable
Product A shipped to a customer in CA-  Los Angeles 9.500% Sales Tax
Product A shipped to a customer in CA- San Diego 7.75% Sales Tax


Bryan

Hat Trick Sports, LLC


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#6 01-07-2019 09:12:08

webmaster
Administrator
From: York, PA
Registered: 04-20-2001
Posts: 19144
Website

Re: Sale Tax

Things like clothes and shoes are not taxable here in PA and I assume those are the kinds of things you're running into.  For the second issue, if you add 'California - Los Angeles' (in the format State dash Locality with CA as the abbrevation) as a State/Province, it will show up in the State/Province listing for customers, and rate as California for shipping.

For your first issue, we don't have a solution currently.  This is something we've not run into or heard of.  Are you 100% sure the case you laid out is correct, and your accountant has verified the logic you're presenting here.  If this is the case, we may need to adjust the tax exempt logic to accept localities instead of a boolean (true/false) value.


Nick Hendler

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#7 01-07-2019 13:25:29

Iceit88
Member
From: Erie, PA
Registered: 11-19-2003
Posts: 543
Website

Re: Sale Tax

Yes, some products such as clothes, food, and in our circumstance Medical Supplies have varying exemption rules depending on the state.  (Example: Clothes are taxed in NY but not in PA).

Here is a tax solution provider I am looking into possibly implementing to help manage all the difficulties of the location and product tax reporting.  Could be as simple as a Mod that allows the product tax identifier to be entered in the K9 back-end product setup? 
https://www.taxjar.com/api/
https://developers.taxjar.com/api/guide … art-guides

"What Products and Services are Subject to Sales Tax?
States vary greatly on the products and services they tax. For example, most states do not charge sales tax on food sales, but a few (Arkansas, Virginia, West Virginia, and Tennessee) do charge sales tax on food.  Prescription drugs are exempt from sales taxes in almost every state, while most states charge sales tax on non-prescription drugs, and Illinois levies a 1% tax on non-prescription drugs. Most states charge sales tax on most products sold in the state, but sales taxes on services vary widely."


Bryan

Hat Trick Sports, LLC


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#8 01-08-2019 08:05:11

webmaster
Administrator
From: York, PA
Registered: 04-20-2001
Posts: 19144
Website

Re: Sale Tax

For complex scenarios like this, we have had clients use TaxCloud - and we have a nice integration with them (not publicly available, but we can install it as a custom job).  If you're looking into third party solutions to calculate and manage taxes, TaxCloud is very nice and we have much of the work done, so I'd recommend you look into that and let me know what you think.


Nick Hendler

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#9 01-08-2019 11:57:19

Iceit88
Member
From: Erie, PA
Registered: 11-19-2003
Posts: 543
Website

Re: Sale Tax

OK, Sounds good will be in touch regarding a possible Tax Cloud implementation.


Bryan

Hat Trick Sports, LLC


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