How do I setup taxes when shipping from multiple states?

[Guest]

My business resides in one State and I sell a few products of my own. I'm expanding my catalog with drop shipping sources.

 

Here's what I'm trying to do:

1) Apply taxes to my products to customers purchasing from my state.

2) My drop shipper is in another state. Apply taxes to customers from the drop shipping state for those products only.

 

I plan on continuing to make further drop shipping connections but only after I figure out this issue.

 

I thought I setup the zones, classes, and tax rates properly but when I test a cart with a mix of my products and drop shipping products osCommerce is displaying both tax rates and applying each separately to my order. This lets me know that I setup the products properly but I'm ordering from a test account that is based in my state, so I should only see tax on my products. The drop ship products should be tax free to my test account.

 

Here is how I setup my tax zones, classes, rates in osCommerce. Please let me know what I'm doing wrong or is my logic off on how taxes should be applied?

 

Zones > United States: (2)

* State#1

* State#2

 

Tax Classes: (2)

* My Products

* Drop Shipper

 

Tax Rates: ( 2 )

Rate #1 Settings:

Tax Class Title: My Products

Zone: United States

Rate: X%

Description: State#1 Tax

Priority: 1

 

Rate #2 Settings:

Tax Class Title: Drop Shipper

Zone: United States

Rate: Y%

Description: State#2 Tax

Priority: 0

 

Thanks in advance,

Max

[jhande]

Hey Max,

 

I'm not sure how you would go about setting different tax rates for different products based on where they will be shipping from.

 

But...

 

Have you checked about your state's tax laws and liabilities?

How about with the drop shipper(s)?

 

The reason I ask...

Usually sales tax is charged according to the regulations where the item sold from (your shop/your state).

Some drop shippers can make life easier, they act as a wholesaler to you and a delivery service. Meaning that the responsiblity of taxes falls onto your shoulder since you actually sold the item.

For those drop shippers that charge a higher tax rate to you (since you processed the order) than your state would charge, calculate the difference into the item price. I'd prefer not to do business with such drop shippers, but that's just me.

 

So in other words...

If item A sells for $10.00 from drop shipper AA and your state charges 6% tax but the drop shipper charges 8%, include the 2% into the price. So now the item cost $10.20 and you charge your 6% tax = $10.80.

 

That would make life easier too if you had to charge a different tax rate per where the item delivers.

 

Just my "thoughts" since I don't deal with drop shippers or tax.

 

-- Edit --

 

I'm not positive but I believe the osC tax zones and rates where intended for calculating the destination of the item, not the from who. So you might have troubles unless you can do something like I mentioned above.

 

But I'm sure within the next couple of days someone with more knowledge on this topic might know the correct way of setting it up.

[kliksys]

I had the problem of needing to charge sales tax for various states depending on my supplier. Some even charge sales tax for all states. Found this on another post and thought I would share as I had hell finding myself. Key step is in stage 4, I was adding everything under one state. Thanks to Ricky for info;

-------------

1. goto to Tax Classes create a class (if one not present) call it "Taxable Goods"

2. goto Tax Zones create 3 zones folders call them 7P, 8P, 14P5, for 7%, 8%, 14.5% respectively.

3. goto to Tax Rates, create 3 rates for 7%, 8%, 14.5% and for each assign the equivalent zone. Put a description on all like "State Sales Tax" that description will come up on the confirmation page and its good to be consistent for each state.

4. ok now start entering the countries/states to the equivalent zones. So goto Tax Zones, double click the tax zones folder for each zone to get to the sub-entries level. Clicke insert, select country & zone accordingly. So Canada Ontario for example will go under the 8P zone folder.

 

Then once you have a product set with Taxable goods the tax will be added. Shipping is different and you should done with the tax first. Once this is working you could start differentiating with the HST,GST etc. although in my case I keep it as total tax.

[Guest]

I had the problem of needing to charge sales tax for various states depending on my supplier. Some even charge sales tax for all states. Found this on another post and thought I would share as I had hell finding myself. Key step is in stage 4, I was adding everything under one state. Thanks to Ricky for info;

-------------

1. goto to Tax Classes create a class (if one not present) call it "Taxable Goods"

2. goto Tax Zones create 3 zones folders call them 7P, 8P, 14P5, for 7%, 8%, 14.5% respectively.

3. goto to Tax Rates, create 3 rates for 7%, 8%, 14.5% and for each assign the equivalent zone. Put a description on all like "State Sales Tax" that description will come up on the confirmation page and its good to be consistent for each state.

4. ok now start entering the countries/states to the equivalent zones. So goto Tax Zones, double click the tax zones folder for each zone to get to the sub-entries level. Clicke insert, select country & zone accordingly. So Canada Ontario for example will go under the 8P zone folder.

 

Then once you have a product set with Taxable goods the tax will be added. Shipping is different and you should done with the tax first. Once this is working you could start differentiating with the HST,GST etc. although in my case I keep it as total tax.

 

 

Now this is encrouching on spam. See your original post here

 

 

Chris