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Sales Tax Not Correctly Applied?

An order came through from a customer that is in Texas, the same state as our business. Everything is set up to charge sales tax on orders that originate from Texas. However, this order was not taxed. The customer did not use a Tax ID, but he did set his shipping address to a different state.

From what I understand, this customer still owes taxes since he placed the order in Texas and has a Texas billing address. Is this an error on our end, or is this a bug?
Comments
  • brettbrett FoxyCart Team
    Hi @crystalimagesinc
    I just took a look at your account. Looks like the customer's shipping address wasn't Texas, so it's (very likely) correct to not apply sales taxes. I see your products are customized, so perhaps there's something different with that particular type of product in Texas, but it's almost always the case that taxes are applied to the shipping address, not the billing.

    Let us know if you've got documentation showing otherwise. We're always keen to learn about some random exception to the rule :)
  • It's a bit confusing, but from what I can gather, Texas is an origin-based state, meaning that sales tax is charged based on whether the customer is in the state as well. It seems my taxes are being calculated as if Texas is a destination-based state, where taxes are calculated from the shipping address.

    Here are the articles I referenced:
    http://blog.taxjar.com/charging-sales-tax-rates/
    https://www.taxjar.com/states/texas-sales-tax-online/
  • brettbrett FoxyCart Team
    edited November 2016
    @crystalimagesinc So you're right, but that's within the state. If you're shipping to another address in Texas, you charge your local tax rate. (To that end, you actually might want to turn off the automatic tax rate, and set the right rate for your location.) We do that ourselves, so if you look at your last FoxyCart email receipt, you'll see we apply the sales tax rate from Austin, not whatever tax rate you've got in your city.

    From that TaxJar blog post:
    > Also, sales tax is based on a the ship-to address.

    So you're fine in this case. Unless your accountant has told you otherwise, and unless you've actually got nexus in other states, you'll only be charging sales tax for sales you ship to Texas addresses (or that are picked up from your location).

    That help?
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