Every order in Allmoxy carries one sales tax rate. When an order is saved, Allmoxy works out which address the tax belongs to, asks its tax-rate service for the rate at that address, and stores the rate on the order. You decide where you collect tax at all with Sales Tax Presence on your Financial settings; everything else (the rate, whether shipping is taxed, the state and county split) is looked up for you. This article covers the setup and the rules behind the number, including the Canadian GST, PST and HST cases.
Applies to: every shop that charges sales tax, in the United States or Canada. Sales Tax Presence is on Settings > Admin > Financial and needs the Manage Financial Settings permission. Making a customer tax exempt is covered in Tax-exempt customers and custom tax rates.
In this article
- Set up Sales Tax Presence
- How the rate is found
- What counts as taxable
- Tax on shipping
- What you see on the order
- Report the tax you collected
- Canadian shops: GST, PST and HST
- Things to know
Set up Sales Tax Presence
Sales Tax Presence is the list of states and provinces where you collect sales tax. Allmoxy only charges tax on orders going to a place on this list; an order going anywhere else gets no tax, and no rate is looked up for it.
- Go to Settings > Admin > Financial.
- Find Sales Tax Presence and open the list. It is grouped by country (United States, Canada and others); tick each state or province where you need to charge and collect sales tax. The state your business is in is usually selected to start; add the others you ship to and collect for.
- Click Save.
If you sell into Canada, tick the provinces of the customers you sell to, not just the province you sell from. If the list is ever empty, no order on your shop is taxed, and your employees see a yellow warning on the order page asking for Sales Tax Presence to be filled in: that is the first thing to check if tax disappears everywhere at once. Check the list again after saving the Financial settings page for anything else.
How the rate is found
Allmoxy uses a sales tax service that calculates up-to-date, rooftop-level rates for your orders, in the United States and in Canada (Allmoxy's tax-rate service, backed by TaxJar). Each time an order that isn't Shipped is saved, Allmoxy sends the ship-from and ship-to addresses, the amount and the shipping, and stores the answer on the order: the combined rate, the GST and PST rates where they apply, whether shipping is taxable, and the breakdown by state, county, city and special district.
The address it uses depends on how the order ships:
- Shipped with a shipping method that has its own ship-from address: the ship-from address is the origin and the order's shipping address is the destination, so the customer's local rate applies.
- Will call (pickup), or a method without its own ship-from address: both origin and destination are your Ship From / Will Call address from Settings > Operations > Shipping, so your shop's local rate applies. A custom method set to "act as will call" is taxed at that method's own ship-from address.
- B2B drop-ship orders: the destination is the order's shipping address.
Set your Ship From / Will Call address before you rely on the rates: Set up your shipping methods. A looked-up rate for an address is kept for the rest of the month, so a rate change can take until the next month to reach an address you have shipped to before.
Two things replace the lookup: a custom tax rate on the customer's company (0 makes them exempt) and an override typed on one order by an employee with Manually Edit Orders. Both are described in Tax-exempt customers and custom tax rates.
What counts as taxable
The rate is applied to the taxable part of the order, not necessarily the whole order:
- Products are taxable unless the product is marked Exempt from sales tax on its product form (Settings > E-commerce > Products): Product settings: reference. A line copies that flag from the product while the order is a bid, and again when the line is changed or added on a placed order.
- Supplies sold on an order are always taxable.
- Itemized orders: supplies, labor (including your payroll tax uplift), overhead and other costs are taxable, except an other-cost line with its Tax Exempt box ticked. Profit is taxed in the same proportion as the items.
- Project orders: each line at its price after the project discount, unless its Tax Exempt box is ticked.
- Items bought from a B2B supplier are always taxable.
- Discounts and price adjustments reduce the tax, because they are already in the line prices.
- Deposits are not taxed separately: a deposit is a percentage of the invoice total, which already includes tax.
Credit memos, finance charges and write-offs carry no tax of their own.
Tax on shipping
There is no shop-wide switch for taxing shipping. The tax-rate service decides per address whether freight is taxable there, and Allmoxy follows it: when it is, the shipping charge is taxed at the order's rate along with the goods. On a custom shipping method with its own ship-from address, you can force tax on the shipping charge by ticking the method's Apply Tax box (this needs a switch Allmoxy turns on for your shop and a disclaimer you accept on the Shipping settings page); will call and methods without a ship-from address are never forced.
The Show Sales Tax on Shipping Fees setting only changes the display: with it on, the shipping tax is split out onto its own Shipping Tax line on the order and output pages; with it off, the one tax line includes it. The amount charged is the same either way. Because the split is worked out separately, the two lines can be a cent off from the single figure.
What you see on the order
The order page shows the rate in brackets next to the tax line, and the amount. Hover over the amount for a note on where the rate came from: the shipping address when the order was created, an address change, the company's custom rate, or an override and who entered it. Click the small info icon next to Total to open Tax Detail, the breakdown of the stored lookup (state, county, city and special-district rates, and whether freight was taxable). The breakdown isn't offered when the order uses an override or the company has a custom rate, since there is nothing to break down.
While you edit an order, the page previews the rate whenever the address, shipping method or totals change. That preview is only a preview: the tax that counts is worked out on the server when the order is saved, so the two can differ by a fraction of a cent, and a tax-service error only shows as a banner on that preview.
Once an order is Shipped, its rate and tax are frozen: no new lookup runs, and the override fields disappear. Move the order back from Shipped and the next save looks the rate up again. For the same reason, a Shipped order doesn't change when the customer's address or your presence list changes later.
Report the tax you collected
Reports > Financial > Sales Tax lists the tax on every invoice line, by charge date, with the tax code, the taxable amount and tax per line, the location it was worked out for, and the rate and amount per jurisdiction (state, county, city and so on). Tick at least one tax code in the filters, or the report stays empty. Orders with a custom company rate or an override show their total tax but no jurisdiction split. The report is described with the rest of the financial reports in Financial reports: what each one shows, and the accounting export carries the same tax code and rate on each row: The export queues and what is in the invoice CSV.
Canadian shops: GST, PST and HST
Canadian rates come from the same lookup. For an HST province, the order stores one combined rate. For a GST plus PST province, the order stores the GST rate and the PST rate separately, and the order page shows them as two lines. A customer company with Canada PST Exempt ticked (in the Financial Settings section of the company form) is charged GST only.
If the tax rate shows on your order page but not on your invoice or order summary, the output page is only printing the combined tag. Go to Settings > E-commerce > Output Pages, open the output page you want to update, scroll down to the HTML editor and find the Tax section. The existing {order_tax_rate} tag prints Canadian HST rates and US rates, so to break out your GST and PST rates add the {order_gst_rate} and {order_pst_rate} tags to your tax section, with {order_gst_amount} and {order_pst_amount} for the amounts. Save, then go back to your order and reopen the invoice output page: the rates now show. Output page editing is covered in Format output pages and cut sheets.
Two more things Canadian shops run into: tick the provinces of the customers you sell to under Sales Tax Presence, and enter postal codes with the space between the two parts (T5T 3Y4 rather than T5T3Y4), both on customer addresses and on your Ship From / Will Call address, so the lookup knows where the order is coming from and going to.
Things to know
- Presence is the master switch. No state or province on the list, no tax, even for an address the service would otherwise tax.
- Pickup is taxed at your shop. Will call and methods without a ship-from address use your Ship From / Will Call address, so the local rate applies. If a shipped order shows your local rate, give the shipping method its own ship-from address.
- The rate is stored on save. If the tax-rate service is unavailable during a save, the order is saved with no tax and no message; saving it again later looks the rate up. See Troubleshoot a sales tax rate.
- Shipped freezes it. Changing an address or the presence list later does not touch a Shipped order's tax.
- The Sales Tax report needs a tax code ticked before it shows anything.
- Don't want to charge tax at all? Allmoxy charges no tax where you have no presence. To exempt everyone everywhere, set each company's custom tax rate to 0: Tax-exempt customers and custom tax rates.