California Tax Rates

THanks for the advice from the folks in California. I am not the book keeper, just the store web person. I appreciate the real world info, because I am not in Caifornia, but the web store is. I have read several California Tax Board pamphlets, they are very confusing and vague.

I think the Zen Cart tax module would take forever to modify for 84 districts. I know it's to to my client to report fairly - so I can only hope their accounting is accurate. Charging the max. at 7.75% would mean returning so money to some clients. It will be up too them.

What a nightmare.

CharlieO

On the California Board of Equalization's website, you can find Tax Tips for District Taxes (pdf). This document's third section is "Sales Across District Lines".

It's reasonably clear to me from this that a small web-based retailer (that is, one with offices, warehouse space, and so forth in only a single tax district) is required to collect the additional district tax only for sales within its own tax district; for sales within California but outside the business's tax district, only the statewide sales tax is required to be collected by the retailer.

It may be that some single-location retailers are in multiple local tax districts, since both cities and counties can levy additional sales taxes...

Thanks. This is the same way I understood it when I read it a while ago.

Also, regards shipping to another district - the document says that no "tax usage fees apply" if you ship via common carrier - USPS, FedEX etc.

That's what we do - I think if you trucked or delivered personally to another tax district you would need to add that.

I think we are on the right track - I think.

Charlieo

Like clanmesa, I really need to implement county-specific tax rates in zencart (for CA). So if anyone has done this, or has advice on it, I'd really appreciate it.

If I figure anything out, I'll post it here.

Thanks!

For what it's worth, we're now considering two solutions, either of which I think would work.

1. Enter each county as a 'zone' and define the tax through the usual Zencart mechanism. For example "CA - Alameda County", "CA - San Francisco County", etc.

2. I downloaded the "Local Tax Module" (from downlaods > older contributions > order-total > ot_local_tax_v1.0.zip). It only allows you to define a single tax rate (with mutliple associated zip codes) that overrides the state rate. But I'm considering modifying it so that you could define different sales tax rates for different zip codes. Then "all" I'd have to do is somehow map the state's zip codes to tax rates, and it should key taxes automatically off the customer's shipping zip code.

I don't know yet which route we'll choose, but I think either should do the trick.

Hey jae,
I have some experience with both options and wanted to pass along what I learned in case it might be of help to you.

Option 1 - The issue with this one is that some of the shipping modules don't like anything other than a two character zone. So "CA - Alameda County" may cause you some problems, but you can have the module check the destination state for that kind of entry and replace it with the correct two characters. I had to make some corrections for both the FedEx module and the DHL module, but I got both to work correctly.

Option 2 - This one is obviously more complicated. I do have something that I expanded on using one of the local sales tax modules. There is no admin interface with it other than to turn it on or off (I just don't have the necessary zen cart understanding to write an admin interface for it). So all the data had to be directly entered into the MYSQL database. So far the module is very rough, but here are the basics: It has two tables, a "rules" table and a "rates" table. The rules table is to define what zones have a local tax and what to base the tax on(city, zip or county). The rates table has the corrisponding rates to those items per zone. So far my testing indicates that it works for city and zip, but I have not finished the county part because county isn't a previously definded field in zen cart and would require some signifigant modifications to the front end of the cart to either use the suburb field or to create a seperate county field. At this point I have not had the time to attempt either.

In any case I am happy to share what I have with you, I have tested it with a unmodifided version of Zen Cart 1.3.0.2.

In any case good luck.
LadyHLG

As the lady suggested, I am using a modified local tax module that uses the suburb field. I modified the entry form so it asks the user to enter the county if in the same state the store is located. The php file then contains a array with all the associated counties and the effective tax rate. So far it works ok, but leaves alot to the customer to enter the correct information. I have contacted the original author of a "true" county tax module, but unfortunately - 1) it is for the 2.7 branch and 2) he is too busy to allow time to update the package to the currant format. So until someone with true expertise, and much more time than I have can build a mod that truely fits for this type of tax issue, I think I (we) maybe forced to use fixes, as described here. Do a search in this forum thread to find my local tax issue post - it may help. I posted a text file of one of the php files that works for me.

CK

Quoted directly from http://www.boe.ca.gov/pdf/pub44.pdf.

"The following example illustrates when retailers should collect and report district use tax:
A retailer in Santa Clara County makes a taxable sale of property which is delivered to and used by the purchaser in Alameda County. Even though it is subject to the general sales tax, the sale would be exempt from Santa Clara County district taxes because the property was delivered outside the county. However, use of the property in Alameda County makes the sale subject to the district use tax in Alameda County. If the retailer is engaged in business in Alameda County and delivers the property to the Alameda County location, he or she is responsible for reporting district use tax. If the retailer is not engaged in business in the county, the purchaser is responsible for reporting district use tax."

How I interpret this:
If the purchaser is in your tax area, charge your area's tax rate.
If the purchaser is in CA but out of your tax area, charge 7.25%. The consumer is then required to report and pay their district's use tax. (By the way, has anyone as a consumer EVER reported your tax-free internet purchases to the BOE? lol)
And we know, if the sale is outside CA, no tax is charged.

This last reply seems like a very simple solution to our California issue. It also makes total sense, seeing as it would be very very hard, not to mention ridiculous, for a retailer to have to research tax rates of all of California's counties...

Any thoughts on this?

This information is very helpful - We set our taxes for 8.25 %, but are in Southern Cal. --

But, does anyone know if there a way to record/collect all the total tax paid on orders from within the admin area of the cart? -- a way to single out all orders that paid California tax and to collect those totals to send to the state? There is an area of reports, but the reports only list sales and orders. If there isn't a feature in the admin, is there a module that would collect such data or a way to set up a new module to collect that data as part of the "reports" area? I'm not a writer, but this would be a most helpful feature, especially when it comes to doing book-keeping.

Thanks,
Kinget

clanmesa:

If you collect too much in sales tax, you have to return it

I'm currently going through the process of becoming legal in the State of California, and THIS is only partially true. If you overcollect on taxes, you must either give the overcharged amount to the State, or return it to the customer. Either is an option, according to BOE's website, which I just checked yesterday.

It looks like there's a lot of misinformation going around about California sales tax. I, for one, will be asking the BOE, and while I'm happy to post what I find, I recommend you call them yourself. Get a first and last name of whoever you speak with, and keep this information with your taxes. :)

kinget:

This information is very helpful - We set our taxes for 8.25 %, but are in Southern Cal.
Just today, a Client in San Fransisco told me his Accountant stated Local Tax was 8.50%. That is what will be charged within his Store.

Also, I noticed Tax was being collected on the Product Price "and" Shipping Cost.
Is that normal in CA or the USA itself? (I'm from Canada and we do things differently. :blink: )

That varies by state. New York requires tax to be collected on shipping as well as products. A few states don't even have sales taxes. (They get their money in other ways.)

Website Rob:

Just today, a Client in San Fransisco told me his Accountant stated Local Tax was 8.50%. That is what will be charged within his Store.

Also, I noticed Tax was being collected on the Product Price "and" Shipping Cost.
Is that normal in CA or the USA itself? (I'm from Canada and we do things differently. :blink: )

As far as CA, you only need to collect tax on the product price if.....(1) you use a common carrier (USPS, UPS, etc.) AND (2) the invoice clearly shows a different entry for S&H. If your invoice does not clearly state that $x.xx is for S&H, then you need to collect on the total price.