Sales Tax Boot Camp for WooCommerce Sellers & Developers

SALES TAX BOOT CAMP FOR
WOOCOMMERCE SELLERS & DEVELOPERS
with JENNIFER DUNN
Put a lid on sales tax.

GOALS
• Cover some tax basics
• Connect sales tax to Shopify
• Share next steps
• Resources for help in the future
• Questions!! (use the chat section to the left)
Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 2

3
QUICK INTRO:
● Chief of Content & Community at TaxJar
● Writes the TaxJar blog
● Not a CPA or tax professional
● Talked to thousands of online
sellers, pros, auditors, states
● Here to help you make informed decisions

WHO WE TALK WITH EVERY DAY
• People making a living online
• Multi-channel sellers who want to be educated
• Developers trying to help their clients with sales tax
• Trying to determine where they have nexus
• Sales tax is being collected in different accounts
• Filing returns is a frustrating, waste of time

”
“
“I want sales tax
to go away!”
3/2/16Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 5
– Average TaxJar Customer

SALES TAX BASICS

CHAOS PREVAILS
• No federal laws or governing body (yet)
• 45 states (and DC) = 46 sets of laws
• Nexus
• Taxability
• Rates
• Due dates

WHAT’S TAXABLE?
• Tangible items are taxable
• Common exceptions are clothing and food
• Services are mostly not taxable
• Are the tides changing?
• Shipping, gift wrapping can be taxable

PASS-THROUGH TAX
• Pay what you collect
• Never pay out of pocket!
• Online sellers are ‘collection agents’

AUTOMATE!
Starting is the hardest part

WHAT THE HECK IS NEXUS?

NEXUS IS WHEN/WHY YOU CARE
A presence / connection in a state that’s
significant enough for you to be required to
comply with their sales tax law

WHAT’S THE RIGHT TIME TO
COLLECT SALES TAX?

GOLDEN RULE OF COLLECTION
Collect sales tax when the item sold is shipped
to a state where you have nexus

MEET JOE SELLER
• Based in Akron, OH
• Only has nexus in OH
• Complying in 1 state

Akron, OH Lakewood, OH
Collect sales tax
NEXUS SALE

Collect sales tax
REMOTE SALE
3/2/16Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc.
Boston, MAAkron, OH

Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc.
HOW MUCH SALES TAX
SHOULD I COLLECT?

COLLECTION LOGIC: SOURCING
• State where item is shipped determines tax rate
• Tax rate usually = sum of applicable rates
• State
• Local
• Other (i.e., education, transportation)

ORIGIN VS. DESTINATION SOURCING
• Origin-based state
• Tax rate = seller’s location
• One rate for entire state
• Destination-based state
• Tax rate = where item is shipped
• Variable rate

Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc.Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 37
RUNNING A
WOOCOMMERCE STORE
& SALES TAX

START IN TAXJAR
Sign up for 30-day free trial
www.taxjar.com
(No credit card required)

INSTALL THE TAXJAR PLUGIN

SALES TAX AUTOMATION PLUGIN
TaxJar takes the following input from your store:
● Seller’s city, and zip code
● Transaction amount
● The city and zip code where item is being shipped
● Any shipping fees charged

SALES TAX AUTOMATION PLUGIN
And returns an accurate sales tax rate (including state, county, city, special
tax) based on:
● Seller’s Nexus – does Buyer’s city and zip code cause nexus?
● Local sales tax sourcing laws - depends on if the buyer’s state is origin-
based or destination based
● Shipping taxability laws - shipping is not taxable in every state

MORE INFO & INSTALL INSTRUCTIONS
www.salestax101.com

FILING RETURNS
Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc.

HOW OFTEN DO I FILE?
● Filing deadlines usually tied to sales volume
• The more you collect, the more often you pay
● Frequencies: annual, semi-annual, quarterly, monthly
● Deadlines typically fall on 15-30th of the month

FILING TO THE STATES
• Combine and file a single return per state
• Not separate returns per channel
• File zero returns!
• When you’ve collected $0 in sales tax

PAY ON TIME = $$
Some states have discounts
for on-time payment
• Generally between 1-2%
• It’s free money!

PAY MORE IF YOU’RE LATE
All states have penalties for late payment
• Booo!
• Late payment charges
• Interest on what wasn’t paid

FILING IN DESTINATION STATES
• Huge pain!
• States rely on you to divide up the money collected
• Calculate taxable sales & sales tax collected by jurisdiction
• Gets worse if you’re multi-channel

HOW ARE YOU FEELING?

HOW DOES TAXJAR HELP MY
CUSTOMERS?

PRICING BASED ON API CALLS

JUST ASK YOUR CUSTOMERS:
●In which state(s) do you have nexus?
●From which zip code will you be shipping?
TaxJar handles everything else!

WHAT ARE YOUR SALES & TAXES COLLECTED BY STATE?

HOW MUCH SALES TAX DID YOU COLLECT BY JURISDICTION?

Thousands of happy customers, including...

Helpful resources
62
youtube.com/taxjar
For visual learners
salestaxcommunity.com
Talk with 5,000 other store owners and tax pros!
blog.taxjar.com
Content just for ecommerce & sales tax

CALL US!
855-800-6681

• 30-day free trial (no credit card required)
• Monthly or annual subscriptions
• Pricing based on transaction volume
• Starts at $19/month for 1k transactions
• $19.95 per AutoFile return
Start a FREE 30-Day trial

WE LOVE QUESTIONS!

Sales Tax Boot Camp for WooCommerce Sellers & Developers

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