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How to Setup California Local Sales Tax in Shopp

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Part 1 – Introduction

In this session we show how to setup California local sales tax in Shopp and discuss the different levels of taxation within the state. In California, each individual business has to charge sales tax based on the delivery address of the purchaser so we find out what the specific taxing amounts are for each city by creating a function that intercepts the tax calculation filter and replaces the calculated tax with the specific location tax.

Video Transcript

The first thing we’re going to do is demonstrate how to create a function that sets the sales tax in California. Now it’s important that you understand that I’m not giving out tax advice and I am not a CPA or tax expert. I’m simply demonstrating here what I’ve done for other clients and what makes sense to me to do from what I’ve read. But don’t trust it for tax advice. Simply trust it for code in Shopp.

Here in the state of Washington, if I have to charge sales tax, I charge sales tax based on my location and different locations around the state have different taxation levels. Here in the city of Edmonds, we have a state sales tax and a county sales tax add on and then we have a city sales tax add on. I think we have an emergency district tax add on.

In my exact location, if I have to charge sales tax then it’s my responsibility to find out what that tax rate is for this specific place. And that’s the only one I have to master. I don’t have to worry about anybody else’s sales tax.

It does not occur to be that way in California. In California, each individual business has to charge sales tax based on the the residents or perhaps the delivery address of the purchaser. And so if you’re an internet business and you are in Los Angeles and you are selling a product to somebody that’s in Bakersfield, you have to charge the Bakersfield tax.

The net result of that is that the state of California has a list of nearly 2,000 cities that have specific taxing amounts. This is the only municipality I’m aware of that has this issue but I have been doing this for a couple of years with clients in California. In fact, it was that specific requirement that endeared Shopp to me in its very beginning.

What we’re going to do is create a function that intercepts the tax calculation filter and then replaces the calculated tax with the specific location tax. We’re going to start off with that though. First, we’re going to go to the Shopp site. Let’s see, thesisshopp.com. What we’re going to do here first is we’re going to set a specific tax amount here in Shopp.

When we go to Shopp and setup and go to taxes and at the moment, what we’re going to say is that the base sales tax, if we don’t know anything different, we’re going to charge 7.5% for… actually, I’m sorry. What we’re really going to do here is this base sales tax, the tax that we’re going to put in here is going to be used for estimating purposes only. What that means is that we want to put the highest tax rate here. For the moment, we’re going to say that the highest tax rate is 8.75% which I believe is what it is. We’ll come back and adjust this if that’s not right, 8.75%. Okay and we’re going to save changes.

What we’re going to do is we’re going to use… when we get to our estimating screen… so we come over here and look at this thing. If we edit our shopping cart, you can see that… let’s see, 90005. We’ll pretend we’re in California, 90002. Let’s try that. Estimate shipping and taxes. See that little estimate button there which needs a little bit of work but it has estimated the tax at $2.62 and the shipping at $5 so it gives this amount. And this $2.62 is 8.75… it’s $3 times 8.75 and let’s just demonstrate that…. times 0.875, $2.62.

Okay so that’s where the tax came from, from that number we entered. Now what we’re going to do is we’re going to make it so that when we proceed to checkout and we enter our city information, that this $2.62 is going to be adjusted for the actual city that we’re in and not the overall state requirement. Okay so that’s what we’re doing here.

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