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Sales tax on S&H


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Posted

I was told (at least in the state of ohio) that we now have to tax shipping and handling - does anyone know how this can be done?

Posted

are you sure it's not just that YOU get charged tax on shipping?

if this is the case, i sincerely doubt it's a government requirement to charge it.

handling is not enforced by USPS or canada post, as "handling" usually compensates the seller's buying of the envelopes, packaging tape and labor put into packaging the order.

 

in ontario there is tax on packages going to certain locations too, but i would never dare think of charging my customer that tax, it looks petty.

just add the costs to your overall product price.

Posted

We were told that we need to start charging the customer sales tax on shipping and handling.

Is there a way to charge tax on total and not just the sub total.

Posted
I was told (at least in the state of ohio) that we now have to tax shipping and handling - does anyone know how this can be done?

 

Hi Jim,

 

I am also located in Ohio. I just launched my site 2 weeks ago...so I am very new at this. I didn't realize that tax needed to be charged on the shipping charges. Could you provide me with more info on this or a place where I could find out more about it? Thanks in advance...I really appreciate all the help I can get on starting out on the right foot!

 

(This would just be taxing OH customers only...correct???)

Posted

I am from California and I attended a seminar conducted by the IRA not too long ago. In the seminar, they made it quite clear that if your online store uses FedEx, UPS, USPS..or any 3rd party transportation company, you don't need to collect tax for shipping. You will only need to impose tax on shipping if the vehicle is operated by your online company.

 

I may be wrong, but I believe the above should apply to you too. If you think about it, won't there will be double taxation on the services provided by the shipping companies?

 

Hope this helps.

- The Jackal

Posted
I am from California and I attended a seminar conducted by the IRA not too long ago. In the seminar, they made it quite clear that if your online store uses FedEx, UPS, USPS..or any 3rd party transportation company, you don't need to collect tax for shipping. You will only need to impose tax on shipping if the vehicle is operated by your online company.

 

I may be wrong, but I believe the above should apply to you too. If you think about it, won't there will be double taxation on the services provided by the shipping companies?

 

Hope this helps.

 

 

A huge help. Thanks so much for your reply!

Posted
I am from California and I attended a seminar conducted by the IRA not too long ago. In the seminar, they made it quite clear that if your online store uses FedEx, UPS, USPS..or any 3rd party transportation company, you don't need to collect tax for shipping. You will only need to impose tax on shipping if the vehicle is operated by your online company.

 

I may be wrong, but I believe the above should apply to you too. If you think about it, won't there will be double taxation on the services provided by the shipping companies?

 

Hope this helps.

 

 

A huge help. This is what I was thinking too, but became quite confused once I read the top post. Thanks so much for your reply!

  • 1 month later...
Posted

Yeah, this seemed a little off to me too (just got the req today) since shipping doesn't feel like part of a sale to me.

 

To anyone in Washington State the law is available here: http://apps.leg.wa.gov/WAC/default.aspx?cite=458-20-110

 

 

(3) Do the business and occupation (B&O) and retail sales taxes apply to delivery charges? The measure of the tax is "gross proceeds of sales" for B&O tax (RCW 82.04.070) and "selling price" for retail sales tax (RCW 82.08.010). Gross proceeds of sales and selling price include all consideration paid by the buyer, without any deduction for costs of doing business such as material, labor, and transportation costs, including delivery charges. Thus, delivery charges by the seller are a component of these tax measures.

 

It appears to me that the seller (us) are required by WA state law to collect and pay taxes on the grand total of the order. Took a look at the Shipping Tax module (listed as Shippiing Tax I believe), but it was in French, and didn't really do what I needed. I just ended up patching ot_tax myself which entailed:

  1. Updating order->info['tax_groups']['WA Sales Tax']
  2. Updating order->info['tax']
  3. Updating order->info['total']

to include the tax for the S&H. It's a rather simple patch and anyone that wants it can have it. My apologies if I've posted out of ettiquete, I'm green around these here parts.

:: GPG Available on request ::

"Only when you drink from the river of silence shall you indeed sing. And when you have reached the mountain top, then you shall begin to climb. And when the earth shall claim your limbs, then shall you truly dance." - Kahlil Gibran

  • 2 weeks later...
Posted
  1. Updating order->info['tax_groups']['WA Sales Tax']
  2. Updating order->info['tax']
  3. Updating order->info['total']

 

In CA, the law states that you have to charge tax on Handling, not Shipping. We just gind it easier to charge tax on the whole thing...

 

 

Kog - trying to follow your patch cause mine isn't working. Could you detail your patch just a little more so i can follow along?

 

TIA.

  • 2 weeks later...
Posted

Kog, I'm interested in your patch...could you please share it? Wisconsin requires us to collect and pay tax on shipping cost, too. I've been banging my head on the wall for days, trying to get this to work. Any info you could give would be muuuuch appreciated. Thank you! :)

 

~Mag

Posted

Maybe I missed the point, but if you want to charge tax on the shipping you just have to change the order in the order total module.

 

Go to

 

admin>>modules>>order total

 

and assign:

 

subtotal:1

shipping:2

tax:3

total:4

 

It charges in the order it sees the items. If it sees "shipping" before "tax", then tax gets charged on the shipping. The way I have it, subtotal is just the total of the merchandise (without tax, or anything). Seems to work fine.

Posted
Maybe I missed the point, but if you want to charge tax on the shipping you just have to change the order in the order total module.

 

Go to

 

admin>>modules>>order total

 

and assign:

 

subtotal:1

shipping:2

tax:3

total:4

 

It charges in the order it sees the items. If it sees "shipping" before "tax", then tax gets charged on the shipping. The way I have it, subtotal is just the total of the merchandise (without tax, or anything). Seems to work fine.

 

This is the way I have it set up, but it still only taxes the actual product. Shipping is not taxed. :(

 

~Mag

Posted
This is the way I have it set up, but it still only taxes the actual product. Shipping is not taxed. :(

 

~Mag

 

In your osc Admin->Modules->Shipping make sure you assigned a tax class for each shipping module. And that tax class is properly defined. Like "Taxable Goods". And the Shipping Zone selected covers the delivery address of an order. If in doubt se the Shipping Zone to "None" for testing.

Posted
In your osc Admin->Modules->Shipping make sure you assigned a tax class for each shipping module. And that tax class is properly defined. Like "Taxable Goods". And the Shipping Zone selected covers the delivery address of an order. If in doubt se the Shipping Zone to "None" for testing.

 

Thank You!!!!!!!!!! For some reason I had to remove and reinstall the modules, but then this worked perfectly!!!! :wub: (w00t)

  • 1 month later...
Posted

Through my distributer I get charge a $5.00 handling fee if the order is under 150$, so instead of chargning my customers a "handling" fee, i use the "low order fee" in the admin-modules-order total section, this way i guess its not classified as a handling fee but more of a penalty which i "assume" i dont need to charge tax for.

 

As for the post of above about changing the order of your totals so tax figures on anything above it in the customer order screen, I tried this and its not true, if you dont set the shipping module your using to charge tax on it, then it wont charge tax on shipping.

  • 2 weeks later...
Posted

I'm in California and I ship over the USA. I ship via UPS and charge my customers the UPS shipping charges plus a handling charge (all combined into one shipping line item). It appears that the law in California states that shipping chargers collected above what it actually cost you to ship should have sales tax applied. That means that the handling plus my UPS discounts would then be taxable. It is a huge pain to try to track...

 

I'm basing this on this California doc: State BOE - Shipping and Delivery Charges

Posted
I'm in California and I ship over the USA. I ship via UPS and charge my customers the UPS shipping charges plus a handling charge (all combined into one shipping line item). It appears that the law in California states that shipping chargers collected above what it actually cost you to ship should have sales tax applied. That means that the handling plus my UPS discounts would then be taxable. It is a huge pain to try to track...

 

I'm basing this on this California doc: State BOE - Shipping and Delivery Charges

 

Yes you are absolutely right.

 

Tracking is not as hard as you think. If you have been doing your accounting, there's no need to do anything special to break down each transaction.

 

E.g.

You company would have been taxed on Total Income received (handling + customer charged shipping) - total expenses (actual shipping). All these are lump sum figures.

- The Jackal

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