United States Taxes

A single ZIP code can have multiple sales tax rates; even neighbouring houses in the same ZIP code can have different rates. In addition, sales tax jurisdictions often overlap so that the right rate will be a combination of rates from all applicable state and local jurisdictions. There are over 12,000 tax jurisdictions in the U.S. alone.

This means that when the consumers purchase, we may not know exactly what business is fulfilling the order.

Generally, this is a great thing for consumers as taxes usually do not need to be collected as businesses are not always in the same state as consumers placing orders. If this is the case, sales tax WILL NOT be charged on the order.

To keep the consumer's credit card information safe, we pre-authorize the tax amount we may need to collect if the fulfilling business is within the same state as the consumer.

Because of this, the tax that is first collected for your order may not be the actual amount charged to the consumer's card.

Let's take a look at how Quivers calculate sales tax in the United States:

Taxes can change anytime, but various services frequently update the information for current sales tax rates. Quivers utilizes real-time tax calculations to ensure we are always calculating and collecting taxes for your business accurately.

The first principle of US taxes to consider is the business's location. If both the consumer and the business fulfilling the order are in the same state, or that state has Nexus requirements, Quivers will collect tax. Taxes are not collected if the business is not in the same state as the consumer or has a Nexus requirement for that state.

In the United States, each state has different laws which determine whether or not your business qualifies for Economic Nexus based on physical presence, gross sales volume, transaction count, or other factors. If you have Economic Nexus in a state, you will be required to collect and remit sales tax to that state. If you do not have Economic Nexus in a state, Quivers may not charge sales tax for that state (depending on the rules of that state).

You can find more details about sales tax by state according to the new Supreme Court Ruling, here.

How taxes are calculated:

There are two ways taxes are calculated, which depend on the state in which taxes are calculated. Each state, for tax purposes, is designated as an "Origin" or "Destination" state.

Origin States - These states require tax to be calculated based on where the fulfilling business is located.

Arizona
California*

California is unique. It is a "Hybrid-Origin" (a modified origin) sales tax state where state, county and city taxes are based on the origin of where the product is being shipped, but district taxes are based on the destination (the buyer). However, if a different zip code is fulfilling an order than where it is shipping, district taxes (county, city, etc.) are not charged; instead, only the default 7.25% rate is used. In California, tax is also not collected for any shipping costs that may have been collected.

TaxJar has an article which explains how sales tax calculation for California operates. Kindly click on the below link for detailed information -

https://www.taxjar.com/sales-tax/california

To further illustrate:
If you only have one location in California, then you’ll charge two sales tax rates. You’ll charge your district rate to buyers located in your district and the California state rate to buyers outside your district. On Quivers, the amount of tax you'll be given for California orders will be the total rate (7.25% for the state + district taxes) if the customer's zip code matches the zip code of any Sales Tax Nexus you have configured. If the customer is located in a CA zip code, you do not have nexus; you only pay the CA state rate since you are "out of their district", which would be 7.25%.

Illinois
Mississippi
Missouri
New Mexico
Ohio
Pennsylvania
Tennessee
Texas
Utah
Virginia

Destination States - These states require tax to be calculated based on where the consumer's shipping address is located.

Alabama
Arkansas
Colorado
Connecticut
District of Columbia
Florida
Georgia
Hawaii
Idaho
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Nebraska
Nevada
New Jersey
New York
North Carolina
North Dakota
Oklahoma
Rhode Island
South Carolina
South Dakota
Vermont
Washington

West Virginia
Wisconsin
Wyoming

The sales tax Quivers has collected for a particular order will display next to each item in the "Tax" column

United States Taxes

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