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I just got my California Seller's Permit, and I must add sales tax for my California buyers. Can someone please advise me how best to do this? I've been selling through PayPal for a year now, and I only want purchasers in California to pay sales tax, and not to apply to any out-of-state buyer. How best to do this? Thanks for any help!
Download PayPal's Website Payments Standard Integration Guide from here. The guide explains how to setup your Account Profile Tax Table calculations.
Sales Tax Tips:
Each state is different when it comes to collecting state sales tax. In many cases you only need to apply state sales tax if the customer resides in your state. Additionally, within many states there are various tax rates according to the county and town the customer resides in. For example, if someone in the state of Colorado buys from me, the tax applied is 2.9%. If the customer lives in Colorado and Summit County, the county in which I live, the tax applied is 5.77%. And if the person lives in Colorado, Summit County and the town of Breckenridge, the town in which I live, the total tax applied is 8.275%. In my senerio, per Colorado rules, sales tax is only applied to the merchandise total and not shipping. Each state is different.
In your PayPal Profile, you can setup your tax table by State and then drill down by Zip Code. The Zip Code allows you to apply various tax rates according to specific location within your state. You can also set the tax to apply to just merchandise total or to merchandise total and shipping depending on your state's tax rules.
It's best to contact your state revenue service to find out anything you have questions on. Once you have all the info you need, you can complete your PayPal Tax Table.
After everything is setup, when a customer makes a purchase on your site, before proceeding to Checkout, he or she enters their Zip code, not only does this calculate the shipping, it includes the proper state sales tax if any. And if needed under certain circumstances, you can override not charging tax in your HTML Button Code. Hope that helps.
What if I am the buyer and he State of California has contacted me about not paying sales tax for international and national purchases I made on eBay. Since I pay for everything purchased from eBay on PayPal, how do I go about paying these back taxes to the State since the taxes weren't collected during the transaction by the seller?