How many states does your business operate in? Do they offer tax holidays? What about tax laws based on specific product categories?
State sales and use tax laws are difficult to keep track of and collect correctly. Typically, an online merchant will need something known as “nexus.” This is a fancy way of saying they own and operate a physical store or business in a specific state. For example, if I own a retail shop in New York State and then I have “nexus” in New York, anything I sell online that ships to a customer living in New York should have sales tax collected.
This has been the standard Mountain Commerce way of allowing merchants to tax customers. Define the states you would like to tax, we look up the tax rate for the customers zip code and apply the appropriate tax.
As tax laws are being changed and tax holidays are becoming more prevalent, the time came to re-write how Mountain Commerce handles taxation. Hence, we have created the Tax Rules module. This is a new method of calculating taxes that allows for additional tax definitions using the purchase date, product price, destination state, and something we call tax categories.
For those merchants who are content with their current method of collecting taxes, fear not. The new Tax Rule module needs to be turned on by Mountain Media. Therefore, your current tax methods will remain in place and working, as you would expect, unless you tell us otherwise.
Should a merchant choose to turn on the module they will have the ability set up:
- Tax holidays for specific states and date ranges
- Different tax rates for different shipping destination states, either using our tax tables or entering a specific tax percent
- Assign products to tax categories that allow you to use different tax rates per tax category
- Only tax products that have a purchase price above a specific amount
Best of all, the tax rules aren’t permanent. Inevitably, tax laws will change and this will require a change in the process of collecting taxes. Most likely the merchant can handle any changes needed immediately. If you are having any trouble with your method of collecting taxes contact Mountain Media for support.
Happy selling, folks!