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Sales Tax Boot Camp for WooCommerce Sellers & Developers

Demystifying sales tax collection, reporting and filing for WooCommerce sellers and developers. Fore more, try a 30-day no-risk free trial of TaxJar. www.taxjar.com

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Sales Tax Boot Camp for WooCommerce Sellers & Developers

  1. 1. SALES TAX BOOT CAMP FOR WOOCOMMERCE SELLERS & DEVELOPERS with JENNIFER DUNN Put a lid on sales tax.
  2. 2. 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. 3. 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
  4. 4. 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 Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 4
  5. 5. ” “ “I want sales tax to go away!” 3/2/16Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 5 – Average TaxJar Customer
  6. 6. SALES TAX BASICS Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 6
  7. 7. CHAOS PREVAILS • No federal laws or governing body (yet) • 45 states (and DC) = 46 sets of laws • Nexus • Taxability • Rates • Due dates Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 7
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  9. 9. 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 Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 9
  10. 10. PASS-THROUGH TAX • Pay what you collect • Never pay out of pocket! • Online sellers are ‘collection agents’ Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 16
  11. 11. AUTOMATE! Starting is the hardest part Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 17
  12. 12. WHAT THE HECK IS NEXUS? Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 18
  13. 13. NEXUS IS WHEN/WHY YOU CARE Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 19 A presence / connection in a state that’s significant enough for you to be required to comply with their sales tax law
  14. 14. WHAT’S THE RIGHT TIME TO COLLECT SALES TAX? Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 27
  15. 15. GOLDEN RULE OF COLLECTION Collect sales tax when the item sold is shipped to a state where you have nexus Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 28
  16. 16. MEET JOE SELLER • Based in Akron, OH • Only has nexus in OH • Complying in 1 state
  17. 17. Akron, OH Lakewood, OH Collect sales tax NEXUS SALE
  18. 18. Collect sales tax REMOTE SALE 3/2/16Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. Boston, MAAkron, OH
  19. 19. Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. HOW MUCH SALES TAX SHOULD I COLLECT? Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 32
  20. 20. 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) Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 33
  21. 21. 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 © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 34
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  24. 24. 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
  25. 25. START IN TAXJAR Sign up for 30-day free trial www.taxjar.com (No credit card required) Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 38
  26. 26. INSTALL THE TAXJAR PLUGIN Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 39
  27. 27. 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 Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 40
  28. 28. 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 Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 41
  29. 29. MORE INFO & INSTALL INSTRUCTIONS www.salestax101.com Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 42
  30. 30. Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 43 FILING RETURNS Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc.
  31. 31. 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 Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 44
  32. 32. 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 Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 45
  33. 33. PAY ON TIME = $$ Some states have discounts for on-time payment • Generally between 1-2% • It’s free money! Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 46
  34. 34. PAY MORE IF YOU’RE LATE All states have penalties for late payment • Booo! • Late payment charges • Interest on what wasn’t paid Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 47
  35. 35. 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 Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 48
  36. 36. 49 CA SCHEDULE B
  37. 37. 3/2/16 50
  38. 38. HOW ARE YOU FEELING? Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 51
  39. 39. 3/2/16 52
  40. 40. HOW DOES TAXJAR HELP MY CUSTOMERS? 3/2/16Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 53
  41. 41. Free 30-Day Trial 54Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc.
  42. 42. PRICING BASED ON API CALLS 55Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc.
  43. 43. JUST ASK YOUR CUSTOMERS: ●In which state(s) do you have nexus? ●From which zip code will you be shipping? TaxJar handles everything else! 56Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc.
  44. 44. WHAT ARE YOUR SALES & TAXES COLLECTED BY STATE?
  45. 45. HOW MUCH SALES TAX DID YOU COLLECT BY JURISDICTION? 3/2/16Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 58
  46. 46. January 11, 2016Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 59 INTEGRATIONS
  47. 47. Thousands of happy customers, including... Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 61
  48. 48. 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
  49. 49. CALL US! 855-800-6681 Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 63
  50. 50. • 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 Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 64 Start a FREE 30-Day trial
  51. 51. 3/2/16Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 65 WE LOVE QUESTIONS!
  52. 52. WHAT ARE YOUR SALES & TAXES COLLECTED BY STATE?

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