calculating california sales tax

[davidjamesmayer]

Folks headquartered in California - how do you charge sales tax given all the different rates by city and county? Do you just charge everyone the higher rate of 9.75% or do you manually enter every zip code? If the latter, is there a good free list to use? I can't find one on the internet.

Thanks
dave

[brassandsilver]

We charge the local rate for our county on all sales shipping within the state only.

[davidjamesmayer]

Thanks! But i thought from an accounting perspective you had to charge the correct rate for the county of the recipient. So, your rate of 8.75% is actually lower than some other counties so unless you true up you are undercharging. Am I reading this rule correctly?
thanks!

[mondo]

Your CA dept of revenue should be able to clear this up.
We're in IL and we also charge all IL residents our local rate which is higher than some but lower than other areas. When we receive our sales tax info they state what we are to charge, our our tax form has our rate pre-filled and we only pay that one rate for all IL sales.

I couldn't imagine having to pay different rates depending on customer location but apparently some states do have that.

[gigahertz6]

Folks headquartered in California - how do you charge sales tax given all the different rates by city and county? Do you just charge everyone the higher rate of 9.75% or do you manually enter every zip code? If the latter, is there a good free list to use? I can't find one on the internet.

Thanks
dave

Dave,

At the very bottom of the page there are links to download the lists in CSV or Excel format. http://www.boe.ca.gov/sutax/pam71.htm

There are over 1700 entries though! :eek: I will be starting sales in California in the next month or so too. Does anyone know if there is a tax import feature in 3dcart to manage these different tax jurisdictions??

[Evolution]

I think BaS is spot on here. I have a drop-shipper in Cali and anything that I ship to a customer in Cali. gets charged the sales tax rate in the drop-shippers county, not the recipient.

[rrw]

We started doing business in Ohio in 2001, and at that point were required to collect sales tax based on the tax rate of the delivery location. That made it a nightmare to report taxes--we had to manually go through them, use a spreadsheet, etc.

Thanks to this post I decided to revisit the issue and see if any changes had been made, and they have! As of January 1st we only have to collect sales tax based on the county from where we ship! Yeah! Guess enough internet retailers have complained, so they adopted the "Streamlined Sales and Use Tax Agreement".

[yourcablestore.com]

You are only required to collect tax at the rate in your county / district. I am in a county with no districts and no extra county tax so I only collect the default state rate of 8.25%. When something ships to another county / district your customer owes use tax. So if I ship something from my warehouse (Paradise, California) to someone in another area with no county / district taxes that person would not owe any use tax. If however I ship something to Los Angeles county where the state / county / district tax is 9.25% the customer owes the 1% to the state as use tax.

You can optionally collect this use tax for the buyer and remit it to the state (some large merchants like Uline charge tax based on your local tax rate in California) however the state does not force you to collect taxes where you do not have a business location so I am fine just charging my local rate.

Now if you are in a location like Los Angeles with a rate of 9.25% the easiest solution is to just charge everyone in the state 9.25% and sending that amount to the state.

[gigahertz6]

Yourcablestore is right. The text below was copied and pasted directly from the California State Board of Equalization website. You can read the entire article here. http://www.boe.ca.gov/sutax/faqpurch.htm

How do I know if I am required to report district taxes?

As a seller, you must collect, report, and pay the district sales tax (called transaction tax) or use on your taxable leases if you:

* Have a business location or are engaged in business within the district;
* Lease, store, or consume tangible personal property in the district; or
* Sell or lease vehicles, undocumented vessels, or aircraft that will be registered in the district.

You are engaged in business in a district if you are a retailer who:

* Maintains, occupies, or uses any type of office, sales room, warehouse, or other place of business in the district, even if it is used temporarily, indirectly, or through an agent; or
* Has any kind of representative operating in the district for the purpose of making sales, making deliveries, or taking orders; or
* Receives rental income from leases or tangible personal property located in the district.