US tax

Jul 24, 2009 at 4:49 AM

Since the tax in the US is different from state to state, is there a way to accomudate it or any plans to incorporate such feature?

Coordinator
Jul 24, 2009 at 7:09 AM

Hi,

Yes, Oliver Hine is looking at US tax options, so it will be incorporated, but as of yet we are unsure when.

Regards,

Dave.

Sep 3, 2009 at 7:34 PM

DESPERATELY need this feature as well.

Sep 4, 2009 at 7:16 PM

Me three... soon :)

Oct 16, 2009 at 1:17 AM

We also would like a US tax option!

As an interim, PayPal can calculate the tax based on the US State code.  You go to the PayPal site and configure the US State-level taxes. Then when the user enters a US State code in their billing address PayPal will correctly calculate the tax.

The key to making this work (as we found out with the original DNN_Store) is that the store cannot pass the &tax= parameter when it passes data to PayPal.  If it does then PayPal interprets this to mean that your cart is specifying a tax amount of zero.  We removed this &tax= parameter from the original DNN_Store's PayPal provider and we were able to use PayPal to calculate US State taxes.

We would be willing to modify and test a similar option with the NB_Store if we could get access to the NB_Store_Gateway source code (assuming, of course, that a US tax option is still some time away).  Our current thinking is that if the NB_Store is configured with the "no-tax" option then we would not pass that parameter to PayPal, and PayPal would take care of calculating the tax.  Any Actual Tax amount calculated by PayPal would be returned to the store as part of the IPN transaction which it posts to the ReturnNotifyURL.

So, is a US Tax option soon in coming?  If not, then what is the process for requesting the gateway source code?

Thanks,

Walt5

Coordinator
Oct 16, 2009 at 7:14 AM

Hi Walt5,

Oliver Hine was going to have a look at the US tax options, but I think he's been flat out on other things, that gives him a living!...so I think a US tax option may be quite a while off.   The new paypal gateway provider does have some flexability in what's passed to paypal, but I'm unsure if it'll meet your needs.  Contact me through codeplex and I'll email you  the source, the source for gateways is open source, I just didn;t want any old (or young) hacker trying to exploit any bugs that may be there, so you need to ask me for it.

Also I've no idea how the US tax system works, if you've got any documentation explaining it, it may be useful in pushing this feature forward.

Regards,

Dave.

Oct 24, 2009 at 7:13 PM
Edited Oct 24, 2009 at 7:14 PM

Dave

 

I don’t know if anyone has answered you on how US sales tax is calculated. For starters, I am not a tax lawyer or an accountant, but I will try to explain how I understand the US sales tax works. I have been searching the web before I wrote this. I could not find a real good source that really broke it down. Read this over and if someone finds an error please correct.

In the United States the Federal government doesn’t collect sales tax; this is for each state to set, and used to pay for the local services. Each state is allowed to charge the amount they deem necessary.  Stores only collect taxes for the state they are in, so if the item being ordered is shipped to the state from which it originates, sales tax is charged.
i.e. The Sales Tax is applied when the merchant is in the same state as the customer's shipping address.

So... some examples:
If my ecommerce business is in Washington (WA) then;
Billed to WA shipped to NY -> no tax
Billed to WA shipped to WA -> tax
Billed to NY shipped to WA -> tax
Billed to NY shipped to NY -> no tax
Billed to NY shipped to UT -> no tax

And naturally, any state you have a presence in becomes a state you must tax.

Wait there is more; states are broken down into counties and each county can add an additional amount. We are not done; the cities located in the counties may add additional taxes. Different states may also add more layers but you get around 7500 different tax rate in the US.

 If we are shipping to a state where you have a presence, we know to charge sales tax. So using this information we get a formula like
States Sales Tax Rate = 7.0%      
County sales tax rate = 1.0 %
City sales tax rate = .25%
The sales tax we charge is 8.25%

Hope this gives you a good starting point.

 Tom