CoOp Taxes Wrong Location?

[Ken]

So, first off @Candithank you for refunding the buck or so each time I place an order. And I know protocol is to handle this through customer service. But... we've done it over and over, maybe @Cory can help? I don't want to pay taxes to a city in the next valley. Zip code 84062 is not in Wasatch County nor is it in Wallsburg City (part of the angst is that Wallsburg is a Mountain Castle community full of the uber-rich). Hopefully my venting can get you some help. Is this an isolated thing or does your billing system have a problem?

[Cory]

The internet has a problem. Internet taxes was sprung on businesses when laws passed, with lawmakers having no idea how it would actually work. Thus every state did their own system.  We use Shopify, one of the largest platforms in the world. There are 2 companies who handle taxation via internet businesses. Both are overwhelmed. You've got taxes changing daily for them to keep up with country wide. Then on top of that you have systems like Google and USPS changing zip codes division lines, and you'll get a customer now flagged for an incorrect county.

Take something that hass been as long standing as the IRS system, delays and problems with taxes the last couple years. Now apply that to taxes at a county level, every county wants money but essentially no one wants to do the work to get it working correctly. Essentially it's not a big enough problem for any government entity to properly get this lined up and businesses are left in the dark.

Meanwhile businesses get to hire an accountant to deal with this. I now have businesses licenses is many states, tax due dates that vary, first of the month, middle of the month, monthly on the date it was registered, once every 3 months, once every 2 months etc.

On top of all of that, not every business has to pay taxes, and not every state has the same rules. Some are by country, some are by city, some is just a state tax. Then on top of all of that to even qualify if you owe money in that state, you have to do X revenue, or X amount of shipments. This also changes, in the past 3 years we've seen many states change the requirements.

Most businesses I know are just sticking their head in the sand and charging no taxes, and now are shocked with back taxes being owed with penalties.

As of 2 years ago all parties involved were "working on it" which they had been for 18 months at that point. Then covid happened, and it's now the excuse as to why it's not being completed.

Trust that in a perfect world, I don't want to charge you an improper tax. However there is no system that is accurate. My favorite is when it's under collecting cause then I just get to pay the difference.  A county updates their rate, doesn't make it into the systems of these companies, and then when the accountant runs the data, we'll be short sometimes by many thousands.

Don't even get me started on, filing taxes in like 100 counties/states and fighting off their claims of you didn't pay, oops our system broke, oops etc. It's basically a nightmare. My apologies to you Ken, all our available options have let us down, and the same 2 companies that interface with our platform interface with all the other platforms.  Short of building out a custom solution for millions we are stuck like most other businesses.

[Ken]

On 9/13/2021 at 8:48 PM, Cory said:

The internet has a problem. Internet taxes was sprung on businesses when laws passed, with lawmakers having no idea how it would actually work. Thus every state did their own system.  We use Shopify, one of the largest platforms in the world. There are 2 companies who handle taxation via internet businesses. Both are overwhelmed. You've got taxes changing daily for them to keep up with country wide. Then on top of that you have systems like Google and USPS changing zip codes division lines, and you'll get a customer now flagged for an incorrect county.

Take something that hass been as long standing as the IRS system, delays and problems with taxes the last couple years. Now apply that to taxes at a county level, every county wants money but essentially no one wants to do the work to get it working correctly. Essentially it's not a big enough problem for any government entity to properly get this lined up and businesses are left in the dark.

Meanwhile businesses get to hire an accountant to deal with this. I now have businesses licenses is many states, tax due dates that vary, first of the month, middle of the month, monthly on the date it was registered, once every 3 months, once every 2 months etc.

On top of all of that, not every business has to pay taxes, and not every state has the same rules. Some are by country, some are by city, some is just a state tax. Then on top of all of that to even qualify if you owe money in that state, you have to do X revenue, or X amount of shipments. This also changes, in the past 3 years we've seen many states change the requirements.

Most businesses I know are just sticking their head in the sand and charging no taxes, and now are shocked with back taxes being owed with penalties.

As of 2 years ago all parties involved were "working on it" which they had been for 18 months at that point. Then covid happened, and it's now the excuse as to why it's not being completed.

Trust that in a perfect world, I don't want to charge you an improper tax. However there is no system that is accurate. My favorite is when it's under collecting cause then I just get to pay the difference.  A county updates their rate, doesn't make it into the systems of these companies, and then when the accountant runs the data, we'll be short sometimes by many thousands.

Don't even get me started on, filing taxes in like 100 counties/states and fighting off their claims of you didn't pay, oops our system broke, oops etc. It's basically a nightmare. My apologies to you Ken, all our available options have let us down, and the same 2 companies that interface with our platform interface with all the other platforms.  Short of building out a custom solution for millions we are stuck like most other businesses.

Thank you. You guys do a great job. I remember when the laws passed in Utah requiring taxes on internet sales, I didn't think much about how it would impact domestic retailers (mistaking believing someone had thought past "we want the money"). My first thought was the e-bay guys from faraway, I'm guessing it didn't impact them at all. 

[ARMYVET]

The govt. could fix this if they just had a single national sales tax rate. Yes for some it would go up an bit while Im sure that for others it would go down a bit. This way no matter where in the country you are...your paying the same as everybody else is.

Then tax all internet sales. Right now some do and some dont. Doing so levels the Playing field nationally.   Business would save tons of money in accounting costs and those savings should be able to be passed on to the customers in lowered prices for goods.   

Of course the Govt could also eliminate all the BS spending but we will definitely not go there.

[Tihshho]

On 9/14/2021 at 8:14 AM, ARMYVET said:

The govt. could fix this if they just had a single national sales tax rate.

Sadly this isn't a solution since sales tax is a state/local tax. The Fed. Government cannot dictate taxation standards to state/local Governments. 

[JettsPapa]

On 9/13/2021 at 9:35 PM, Ken said:

So, first off @Candithank you for refunding the buck or so each time I place an order. And I know protocol is to handle this through customer service. But... we've done it over and over, maybe @Cory can help? I don't want to pay taxes to a city in the next valley. Zip code 84062 is not in Wasatch County nor is it in Wallsburg City (part of the angst is that Wallsburg is a Mountain Castle community full of the uber-rich). Hopefully my venting can get you some help. Is this an isolated thing or does your billing system have a problem?

I had a similar experience with my last order (except I didn't get the refund).  I don't mind the state sales tax, but I live in a rural area and shouldn't be paying city sales tax, and I was charged taxes for a city about 200 miles away.

[Ken]

On 9/14/2021 at 10:16 AM, JettsPapa said:

I had a similar experience with my last order (except I didn't get the refund).  I don't mind the state sales tax, but I live in a rural area and shouldn't be paying city sales tax, and I was charged taxes for a city about 200 miles away.

I do feel a little silly fussing about a few bucks here and there (and haven't the last couple orders) but if I'm going to pay taxes I want them to benefit what they're supposed to. My zip defaults to an area similar to Sundance and Park City but with 20-40 acre lots $$$. I think they can pay for their own roads. I didn't realize what a weird mess the CoOp is dealing with.

[Tihshho]

On 9/14/2021 at 6:47 PM, Ken said:

I do feel a little silly fussing about a few bucks here and there (and haven't the last couple orders) but if I'm going to pay taxes I want them to benefit what they're supposed to. My zip defaults to an area similar to Sundance and Park City but with 20-40 acre lots $$$. I think they can pay for their own roads. I didn't realize what a weird mess the CoOp is dealing with.

The issue now is that the same district will most likely get the tax still, but it will come from the CoOp 

[Pete]

For anyone interested in what I assume @Cory is having to work with, here's a simplified version of the tool that runs in the background of any e-commerce transaction you encounter that's trying to collect taxes. Put in your home address and you'll likely see 3 or more tax jurisdictions (usually city, county and state plus any special jurisdictions) that it thinks you fall into. Each of these has to be updated all the time.  It's a nightmare.

https://www.avalara.com/taxrates/en/calculator.html

Avalara is a HUGE vendor to technology companies trying to keep tax rates up-to-date and they make a TON of money off everyone despite their data only being semi-accurate.

 

[lefty o]

im sure it has to be an absolute nightmare with every state being different, different taxes by county, and even by city. there is just no fathomable way to stay on top of it and be 100% accurate. i know for sure all those zip code deals on websites arent accurate as they always want to change what city i am actually in, to one close by but actually in a different county. its aggravating enough to have to keep telling checkout systems that the city i put in is actually the right city because some dolt wingdinged the software to say it isnt based on zip code. taxes, i wouldnt even want to deal.............

[Torrey]

I used to have my own company ( a side business) and shipped everywhere in the US, plus territories, plus a few countries. 

 

This was before the internet, so I had to get a tax code booklet each quarter, look up the tax rate, and do the invoice accordingly. 

I know the hastle, and it's only gotten worse.

I loved filling orders for people in Oregon, zero sales tax!

Cory, you have the patience of saints, and so does Candi!

[NanoNano]

The first job I had out of college in '97 was working for an extremely well funded sales organization.  The Vertex tax tables we purchased were full of errors back then as well.  So...accurate sales tax collection on mail-order purchases is a problem that's been around since last century.

Edited September 19, 2021 by NanoNano