Multiple Sales Tax Rates for (1) State

[kvmiller]

Here in Chicago, Illinois we have (at least) (3) different tax rates on products: Food (2%), General (9%), and Soda (12%). Up to now, I've only been selling "General" tax type items on my on-line store. But now I want to start selling the rest of my product line-up, which means I need to choose from multiple tax rates for the same state.

I've been using the "State Based Sales Tax" feature, and have now discovered that it allows one to only set-up (1) tax rate per state. :mad:

Is there a creative way of using the other Sales Tax features that would allow me to "create" the multiple rates?

Or, is there some module out there that is a "Super Tax" type of thing that allows you to set-up a more complex Sales Tax offering?

Thanks,

Ken

[Julie Wilber]

Ken,

I know that there was something discussed about Florida's different tax rates, but if I remember correctly, there was no solution. That was based upon zip code though.

When I get back into the office on Wednesday, I'll do a bit of research and see what I can find out for you.

[David Pontius]

We have a similar problem. We sell some items that are taxable in Arizona, but not taxable in Texas, and vice versa.
What I've seen other software do is have a "tax category" for each product, and then each state/tax category combination has it's own tax rate.
As far as I know, there's no such software for Merchant.

[kvmiller]

Julie:

Any luck on finding some information on this? I'm getting ready to add a couple hundred new products, and do not have any good way of setting the proper tax codes.

This is a pretty major problem -- hasn't anyone else had to deal with this at some point?

[David Pontius]

One thing we've done is not charge tax on anything in Texas, and then pay the sales tax ourselves. I can run a report in our processing software that shows what the tax should have been. I don't know if you have that capability.

Dave

[Julie Wilber]

I'm still looking, well actually, I have sent the call out that I need suggestions, and I have been searching through the forums. I found the thread I was thinking about, but as the ol' Magic 8-Ball says, outlook does not look good.

Mark has been cornered, and hopefully between some of the helpful suggestions of our community members and our intrepid developers we can come up with a solution.

Thanks!

[Scott McCollough]

I'll go ahead and field this one as my default test store has product-by-product taxing.

The key is to use German VAT tax.

Go into your store Settings and choose German VAT. This will give you three new tabs: VAT Rates, VAT Countries, VAT Options.

First go to VAT Countries. Since the the United States isn't part of the EU you need to add America to the list of taxed counties. If you plan to sell internationally then you'll have to add every country. Key point is to make sure that any country you plan to sell to needs to have an entry.

Next go to VAT Options. Uncheck Product Price Includes VAT. The other two regarding shipping is your call.

Last go to the VAT Rates tab. Here you'll enter all the different percentages. So for your example enter in an entry with Food as a description and 2.00 for the rate. Continue as needed.

The last step is go to each product in your store and set the tax. This should be pretty obvious by now. Go to each product, go to the VAT tab, and choose the correct rate from the drop down. Rinse, lather, repeat.

Hope this fixes ya up!

/Scott

[David Pontius]

Hi Scott,
I think that will work for Ken, since he only has to deal with one state. But it doesn't work for me, since I have to have a different rate for each state, but not every item is taxable in every state. For example, vitamins are taxable in Arizona, but not taxable in Texas.

I would suggest that Miva look into this. It seems more and more likely that online businesses will have to tax sales in each state they sell sometime in the near future.

Dave

[kvmiller]

Scott:

Thanks for the suggestions. I did try this, but the problem is that by doing this, this forces me to then charge tax on EVERY sale that I have, not just the ones in my state (IL). This is because this module charges tax based on COUNTRY of sale, and not STATE of sale.

So, while this was a clever approach, it does not solve the problem.

Does Miva have any other ways to approach this?

Like I said before, there is no way this is the first time this has come-up as there are many states with multiple tax rates. Also, like David said above, there is going to be a time in the not-so-distant future where retailers are going to need to collect sales tax for multiple states.

[Bruce - PhosphorMedia]

Ah, wait a minute. First, what do you mean you have to charge tax in AZ and TX...do you have business locations in each state? If not, then you only need to collect tax in the state in which you do business in. Second, if the state in which you do business is non-progressive or enlightened, you have two choices.

1) Use CertiTax which is a very comprehensive but expensive system.
2) Consult with a state tax accountent for suggestions. Some states let you "estimate" and pay based on sales patterns, others will let you pay out of pocket, in which case you have to figure out how to recover that cost in state (here is a hint, in state shipping is usually much cheaper...esp, if a handling charge is added.)

Welcome to your internet nightmare...but AFAIK (and that is reasonably far<G>) no other system has a better way to deal with these things.

[David Pontius]

We have nexus is 7 states.
Yes, certitax is very expensive, we looked into that.
If those wonderbrains at the SSTP (Streamlined Sales Tax Project) have their way, all internet transactions will be taxed based on the point of delivery. At that point, it becomes everyone's problem.

For Texas, we do run reports in our processing software showing what tax should have been paid, and pay it ourselves. We were just audited by the state of Texas (yes, they sent a tax collector to AZ since we have nexus), and they said that's fine.

The solution is actually fairly simple.
A product is put in a "Tax Category".
The Tax Category has a specific tax rate in each state. It may be 0% in Texas, but 8% in Arizona. That's how most software handles the issue. I don't know if there are any ecommerce programs that do this, so someday I may have to write one.

[Gazungle]

That tax fix is pretty interesting. I have a problem in NYC, clothing is taxed over $110 only. And it's only in NYC, not the whole state. Any ideas ? :)