Incorrect tax rates return from TaxJar for Colorado #2833
Comments
samnajian
changed the title
iyut
changed the title
|
After doing some investigation and testing, the issue seems not from the plugin. The plugin seems display and save exactly what the rates return from the TaxJar. The issue here is because the TaxJar rate return is inconsistent. CMIIW, I think the rate return for Dolores, Colorado need to be consistent whether it's using 5 digits postcode or 9 digits postcode. At the moment, I'm trying to contact TaxJar support to ask about this issue. I'll update here if I have any reply from them. |
|
@samnajian , I just got a reply from TaxJar :
Based on what they say, it seems the most accurate tax will be by using 9 digit zip codes. |
|
#2825 might be related to this as well. The same 5-digit zip code can have more than one tax rate, so TaxJar needs more information about the address in order to return the rate that applies to that specific location. |
This makes sense to me, as it seems we can't do more about it. What do you think about this approach @laurajohnsonwoo || @MatthiasReinholz ? |
Hmmm I don't think most Americans know their 9-digit zip code. I have no idea what mine is! That would add too much friction to the checkout experience. From TaxJar:
Is there a reason we can't use the full street address? |
|
Unfortunately, using the full street address in the original ticket does not provide the correct rates from TaxJar. An order was placed with the address and was charged 7.3% instead of 3.3% Full address with 5 digit zip: https://d.pr/i/ZEVn0G Ref: 9142961-zen |
|
With @hayley-king's help we checked 2 other tools, https://colorado.ttr.services/ and https://www.avalara.com/taxrates/en/state-rates/colorado.html |
|
If we add the notice to the checkout, should we include a link to USPS to help users find their 9-digit zip code? |
|
One other thing that we can do for this issue is probably trying to implement the address validation feature like WC Shipping has in this PR. Address validation could help adding 9 digit zip code into the address field. However, it might take a lot of time to develop and testing as well. |
@iyut We don't want to add more features to WCS&T, let's work on more low-input solutions. |
Hi @samnajian @hayley-king @laurajohnsonwoo will that be ok if I go ahead with the suggestion above? |
@iyut it makes sense to me, what do you think @laurajohnsonwoo ? |
|
More discussion on this in 9230840-zen |
|
Daniel from TaxJar responded to the ticket above (9230840-zd-a8c) with some more detailed information about Colorado tax rates. It doesn't look like simply using your 9-digit zipcode is enough to correct this issue. Instead, there are complex rules here that are based on the business' entered address. Taxes are only charged within the business' home city and county, which is apparently (according to the merchants) not how Colorado Home Rule Cities actually do it. Plus, this becomes very complex for companies that either a) have a nexus in Colorado but don't have a physical presence, or b) have more than one physical location, which TaxJar doesn't actually support. Here is what Daniel said in that ticket: Colorado has quite a complicated sales & use tax process. Here is a general overview which would apply to most sellers. Please note that this is not a comprehensive account of all scenarios. Colorado Sales Tax: Colorado Retailer's Use Tax: Please note that the above applies generally to sellers with only one or zero locations in Colorado - sellers are typically required to collect sales taxes in all jurisdictions they have selling locations in, but we do not yet support multiple selling location filing in CO. Colorado also has home rule cities which may have slightly different rules regarding nexus in their jurisdiction and when a seller is required to collect. If you have any questions regarding a home rule city, we suggest contacting the city directly. Due to the complexity in Colorado's home rule sales tax collection and the lack of uniformity between counties, we don’t support automatic sales tax collection or reporting for Colorado home rule cities. You can see this reflected in your Colorado report on your TaxJar dashboard, where the report section lists home rule cities that require self-collection. There is a manual workaround that can exclusively be implement through a custom integration with our API for sales tax collection purposes within those jurisdictions. One way to collect in multiple Home Rule Cities would involve using the nexus_addresses If you add the nexus_addresses parameter, please note that you need to enter in all of your nexus states for that parameter, not just your Colorado nexus addresses. Our system will only look at those states when deciding if you need to collect tax. We will ignore the addresses in your Business Profile and State Settings in TaxJar when that parameter is present. If you match the shipping/to_address with the nexus_address, we will collect Home Rule taxes. This is a manual development your engineering team can implement for Colorado. This approach allows for accurate tax collection for Home Rule cities based on your specific nexus configurations. As we cannot give legal advice, please consider the following to be informal guidance. So not sure what we should recommend going forward. It appears that businesses selling with a nexus in Colorado, who are either not physically located in Colorado or have more than one physical location in Colorado, will require some custom modifications in order to use TaxJar properly. |
|
Also wanted to add two additional ideas I had here that might work:
|
|
Just another update to say that it looks like this is going to be an ongoing issue for any merchants that:
For now, TaxJar will continue to collect Home Rule city taxes only in the narrow case of:
Otherwise, Home Rule city taxes will not be applied. For any WooCommerce support staff reading this, there is an internal post with additional summary information and brainstorming about how to handle this on the WooHappy blog. It's linked on this ticket: |
|
Hi @lynnjat7, Thanks a lot for the useful information you have shared above.
We actually have taken the
Yeah, I also believe 9-digit zipcode won't be enough to correct all Colorado tax issue. But with limited parameter or option that we have ( such as: shipping address and store address ) I feel like it can narrow down the tax calculation issue.` |
WCS&T seems to be returning incorrect tax rates for Colorado. I'm able to get the correct rate (3.3%) using the TaxJar calculator but only when I either use the zip + 4 or include the street address. It seems the rates on the site only take the city and zip into account. Confirmed the issue in a test environment changing the shop address to the merchant's address.
Merchant's config:
I have not entered any tax rates manually. The Automated taxes have been enabled this whole time and the standard tax rate table populates with a new tax rate anytime someone makes an order. Several more orders were placed yesterday and you can see that there are new rates in the tax table that I did not put there. I've included screenshots of the tax settings, general settings, new table table and checkout page below. The tax is still being figured at the 7.3% rate. Please let me know if you need anything else.
What's been done and confirmed the issue:
WordPress Environment
System Status Report
The text was updated successfully, but these errors were encountered: