Sales Tax Boot Camp for WooCommerce Sellers & Developers

SALES TAX BOOT CAMP FOR WOOCOMMERCE SELLERS &

DEVELOPERSwith JENNIFER DUNN

Put a lid on sales tax.

GOALS

• Cover some tax basics• Connect sales tax to Shopify• Share next steps• Resources for help in the future• Questions!! (use the chat section to the left)

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QUICK INTRO:

● Chief of Content & Community at TaxJar

● Writes the TaxJar blog

● Not a CPA or tax professional

● Talked to thousands of online sellers, pros, auditors, states

● Here to help you make informed decisions

WHO WE TALK WITH EVERY DAY

• People making a living online• Multi-channel sellers who want to be educated• Developers trying to help their clients with sales tax• Trying to determine where they have nexus• Sales tax is being collected in different accounts• Filing returns is a frustrating, waste of time


”“

“I want sales tax to go away!”

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– Average TaxJar Customer

SALES TAX BASICS


CHAOS PREVAILS

• No federal laws or governing body (yet)

• 45 states (and DC) = 46 sets of laws• Nexus• Taxability• Rates• Due dates


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WHAT’S TAXABLE?

• Tangible items are taxable• Common exceptions are clothing and food

• Services are mostly not taxable• Are the tides changing?

• Shipping, gift wrapping can be taxable


PASS-THROUGH TAX

• Pay what you collect

• Never pay out of pocket!

• Online sellers are ‘collection agents’


AUTOMATE!

Starting is the hardest part


WHAT THE HECK IS NEXUS?


NEXUS IS WHEN/WHY YOU CARE


A presence / connection in a state that’s significant enough for you to be

required to comply with their sales tax law

WHAT’S THE RIGHT TIME TO COLLECT SALES TAX?


GOLDEN RULE OF COLLECTION

Collect sales tax when the item sold is shipped to a state where you have nexus


MEET JOE SELLER

• Based in Akron, OH

• Only has nexus in OH

• Complying in 1 state

Akron, OH Lakewood, OH

Collect sales tax

NEXUS SALE

Collect sales tax

REMOTE SALE

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Boston, MAAkron, OH

Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc.

HOW MUCH SALES TAXSHOULD I COLLECT?


COLLECTION LOGIC: SOURCING

• State where item is shipped determines tax rate

• Tax rate usually = sum of applicable rates• State• Local• Other (i.e., education, transportation)


ORIGIN VS. DESTINATION SOURCING

• Origin-based state• Tax rate = seller’s location• One rate for entire state

• Destination-based state• Tax rate = where item is shipped• Variable rate


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RUNNING A WOOCOMMERCE STORE

& SALES TAX

START IN TAXJAR

Sign up for 30-day free trial

www.taxjar.com(No credit card required)


INSTALL THE TAXJAR PLUGIN


SALES TAX AUTOMATION PLUGIN

TaxJar takes the following input from your store:

● Seller’s city, and zip code

● Transaction amount

● The city and zip code where item is being shipped

● Any shipping fees charged


SALES TAX AUTOMATION PLUGIN

And returns an accurate sales tax rate (including state, county, city, special tax) based on:

● Seller’s Nexus – does Buyer’s city and zip code cause nexus?

● Local sales tax sourcing laws - depends on if the buyer’s state is origin-based or destination based

● Shipping taxability laws - shipping is not taxable in every state


MORE INFO & INSTALL INSTRUCTIONS

www.salestax101.com



FILING RETURNS

Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc.

HOW OFTEN DO I FILE?

● Filing deadlines usually tied to sales volume• The more you collect, the more often you pay

● Frequencies: annual, semi-annual, quarterly, monthly

● Deadlines typically fall on 15-30th of the month


FILING TO THE STATES

• Combine and file a single return per state• Not separate returns per channel

• File zero returns!• When you’ve collected $0 in sales tax


PAY ON TIME = $$

Some states have discountsfor on-time payment

• Generally between 1-2%• It’s free money!


PAY MORE IF YOU’RE LATE

All states have penalties for late payment

• Booo!• Late payment charges• Interest on what wasn’t paid


FILING IN DESTINATION STATES• Huge pain!

• States rely on you to divide up the money collected

• Calculate taxable sales & sales tax collected by jurisdiction

• Gets worse if you’re multi-channel


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CA SCHEDULE B

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HOW ARE YOU FEELING?


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HOW DOES TAXJAR HELP MY CUSTOMERS?


Free 30-Day Trial

54Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc.

PRICING BASED ON API CALLS


JUST ASK YOUR CUSTOMERS:

●In which state(s) do you have nexus?●From which zip code will you be shipping?

TaxJar handles everything else!


WHAT ARE YOUR SALES & TAXES COLLECTED BY STATE?

HOW MUCH SALES TAX DID YOU COLLECT BY JURISDICTION?


January 11, 2016Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 59

INTEGRATIONS

Thousands of happy customers, including...


Helpful resources

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youtube.com/taxjarFor visual learners

salestaxcommunity.comTalk with 5,000 other store owners and tax pros!

blog.taxjar.comContent just for ecommerce & sales tax

CALL US!

855-800-6681


• 30-day free trial (no credit card required)

• Monthly or annual subscriptions

• Pricing based on transaction volume

• Starts at $19/month for 1k transactions

• $19.95 per AutoFile return


Start a FREE 30-Day trial


WE LOVE QUESTIONS!

WHAT ARE YOUR SALES & TAXES COLLECTED BY STATE?

Education

Sales Tax Boot Camp for WooCommerce Sellers & Developers