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California Sales Tax Calculating Incorrectly

I've seen a similar issue raised in a few other threads, but don't see an official response so here's my specific question. I have set up my cart to calculate sales tax automatically based on Region = California. My business is physically located only in Berkeley, CA. We have no other locations in CA. The cart is calculating sales tax based on the state rate + district rate for all CA addresses. But sellers in California are only required to collect the district rate when shipping to an address in a district in which they have a physical location. For all other shipments to CA addresses (which is 99% of my CA shipments) it should only be using the base 7.5% state rate. I don't want to collect any more taxes from my customers than I'm legally required to.

For more clarity on this, see this detailed explanation: http://blog.taxjar.com/sales-tax-for-california/ -- particularly item #4, which lays out the proper way to for CA businesses to collect sales tax on in-state shipments.

The tax set up doesn't seem to ask where my business is physically located, which is a very important detail for CA sellers. Is there a fix for this on the horizon? Or perhaps I don't have something configured properly? Thanks...
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Comments
  • fc_adamfc_adam FoxyCart Team
    @Leafcutter,

    Good question - I'm going to ask another team member who is more familiar with the US tax side of things to get back to you on this. He'll be in touch soon.
  • brettbrett FoxyCart Team
    @Leafcutter, this is something we actually just learned about last week. I'd never been aware that California was so unique wrt how it applied taxes.

    Unfortunately, we don't yet have a way to automatically do this. Our automatic rates are the rates for particular locations, but don't take into account district boundaries and such.

    Depending on where you are and how many districts you're in, you could disable the automatic and do something like this:
    Say you're in San Diego. Tax there is 8.0%. That's 7.5% CA state and 0.5% San Diego. You could create a CA state tax and a San Diego city tax in FoxyCart, and you'd be good to go.

    It's worth noting that the district taxes for different districts is still supposed to be paid. But it's a use tax, so it's supposed to be paid by the purchaser. And we all know that pretty much never happens. If you do collect the full district tax and remit it to the state, I'm pretty sure they wouldn't mind, but you could submit your plans to them (info on that TaxJar link) to get approval. Similarly, you could get approval for the approach I mentioned above.

    We'll take a look on our end to see if our tax rate provider has any better option for California, but I don't think they do.
  • @brett,

    Thanks for the follow-up. Just to close the loop here, my read is that to accurately collect sales tax for a county-wide tax district, we'll have to set up separate add-on "Local" tax rates for each city in the county, since there's no county-level "tax type." That's not too much work, so we'll go that route.
  • fc_adamfc_adam FoxyCart Team
    @Leafcutter,

    That's right - let us know if you run into any other troubles.
  • CliffSCliffS Member
    edited November 2015
    Leafcutter is right - I live in Oakland, probably few blocks away from him. Your solution seems to work OK for us.
    Thanx!
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