Sales Tax by Zip

[mlcschris]

When sales tax by zip is enabled--what zip code is used, billing or shipping?

It seems to be using shipping. However, this is counter to our understanding of tax law--sales tax is based on state of RESIDENCE, I believe.

Please advise.

[Jim]

Sales tax within ShopSite us based on shipping address zip code.

Unless you have a physical presence (i.e store, office, salesman etc) in a state they cannot require you to collect tax for that state. Interstate commerce is regulated by the federal government and not the states themselves and there is no federal sales tax which would apply. (Disclaimer: I am not a tax attorney so you should contact your tax attorney/accountant for official info.)

[mlcschris]

But, we do have a physical presence in this particular state. Therefore, we need to charge tax to people who are also RESIDENTS of this state (ie. based on billing address, not shipping).

[Jim]

Not unless the product is being shipped to them at their residence in that state. If they are buying it and YOU sending it to a friend in another state then there should be no tax because the product is being shipped out of the state. If they buy the product and have it shipped to them and then THEY send it to their friend then there would be tax on it because they took possession of the item in their state. Again talk to a tax attorney.

[bakerman]

Sales tax within ShopSite us based on shipping address zip code.

Unless you have a physical presence (i.e store, office, salesman etc) in a state they cannot require you to collect tax for that state. Interstate commerce is regulated by the federal government and not the states themselves and there is no federal sales tax which would apply. (Disclaimer: I am not a tax attorney so you should contact your tax attorney/accountant for official info.)

Jim's response is my understanding of this too.