Sales Tax

[Lt5]

Hello! 

I’m just starting out and have a question about the sales tax. My company is set up for IL and I’ve tested my address in IL for a test order and everything showed up fine. Now I have a potential 

customer in GA asking what the total amount would be with shipping and taxes. I put in her address and it’s not generating any sales tax. Is that correct? 

[Candlestore]

@Lt5;

The old way of doing this was the Sales Tax was based on where the business is located and the sale was made in person.  When items were shipped its on the buyer to pay sales tax where they are located.

The new way is it depends on the state with all these online sales and shipping to out of state customers.  States were loosing money from the loss of sales tax.  Some states Collect the higher sales tax rate then split some amount with the state that the prduct was shipped to.  So in my State of Pa, any online sale from my location to anyone in Pa pays the state sales tax.  Once my item is shipped to another state no Sales tax is collected.    These tax laws are ever changing and if you have a location in another state you need to collect taxes based on you locations not just your headquarters.  

The best way to get to you final answer would be to talk to your accountant for your state to see what is required for you in your State(s).  Every state is different so what is correct for me may not be for you.

[MayaP · Accepted solution]

Hello @Lt5,

Thank you for reaching out! As @Candlestore  mentioned, tax reporting requirements can vary by state. We recommend consulting with an accountant or tax professional to ensure you're adhering to the appropriate rules and regulations. If you need anything else let us know!