Forum Moderators: buckworks
Where we live, the local tax is pretty low. We ordered a dining room set from a retail business and they even charged us sales tax for our zip code - saved about $60.
I have only played with a few shopping carts and those charge tax on the shipping address.
Of course, you would want to verify with your accountant as well.
-Corey
Does anybody know why many shopping carts calculate state sales taxes based upon the billing address?
It makes perfect sense. The purchaser is going to have their home address on the credit card and that is where the tax is due. For example, LL Bean is based in Maine where there is a sales tax. Out-of-staters making a purchase online (or via phone) do not have to pay the Maine sales tax because the transaction is not taking place in Maine. The easiest way to ascertain the buyer's residence is from the billing address.
There is an exception. If the product is shipped from a distribution center in the same state as the buyer's billing address, then that state will collect the sales tax.
It makes perfect sense. The purchaser is going to have their home address on the credit card and that is where the tax is due
No, that's wrong.
I believe that the majority of states require tax based on the delivery address, but as it is something that varies from state to state, you will need to check with your local sales tax office.
But going back to the original question - most (good) shopping carts will have the option to calculate sales tax based on billing or delivery address.
No, that's wrong.
You're telling us that if you operate a business in New York and sell to a person in another state, that New York is not going to get its sales tax? "No, Mr. Taxman I shipped all my producst out of state so I owe you no tax?" Think again!
Next time you make an online purchase you should see the vendor noting that state tax is due if you live in "XX" where XX is the state the business is located in. If your billing address is in that state, you pay the tax.
I am only charged sales tax on shipments to New York state.
As this is an Ecommerce forum, perhaps you shouldn't post erroneous statements about ecommerce.
It seems that there are varying views on the subject - I would suggest confirming with your accountant. I know ours has us charge sales tax to the shipping ZIP code and I know that most of our e-commerce clients charge shipping to the shipping ZIP code.
-Corey
Page 20, bottom. Point of Delivery.
As repeatedly stated, it may vary from state to state.
