How is Sales Tax calculated?

Understanding how sales tax is calculated on your order

How is sales tax calculated on my order?

Sales tax is calculated based on where you take possession of or receive your goods, not where your billing address is located. This follows state and local tax regulations across the United States.

Important: Tax will only be calculated if the state has been added in the Tax Locations page of your store settings. If you're shipping to a state not configured for tax collection, no tax will be charged.

Why isn't tax based on my billing address?

Your billing address is used for payment processing and fraud prevention only. Sales tax is determined by the location where economic activity occurs—where you physically receive or pick up your items. States collect tax based on where goods are consumed, not where your credit card bill is sent.

Sales Tax by Fulfillment Method

Shipping

Tax is calculated based on your delivery address (where the package is shipped).

In-Store Pickup

Tax is calculated based on the store location where you pick up your order.

Curbside Pickup

Tax is calculated based on the store location where you pick up your order.

Local Delivery

Tax is calculated based on your delivery address.

DoorDash Delivery

Tax is calculated based on your delivery address.

Uber Eats Delivery

Tax is calculated based on your delivery address.

Instacart Delivery

Tax is calculated based on your delivery address.

Understanding Tax Locations

Sales tax is only charged when your order is delivered to or picked up in a state that has been configured in the store's Tax Locations settings. Here's how it works:

The Two-Step Tax Rule

  1. Step 1 - Is the state configured? The store checks if the delivery/pickup state is in their Tax Locations.
  2. Step 2 - What's the exact rate? If YES, tax is calculated using the specific city/county rate of the delivery address.

✓ Tax IS charged when:

  • Delivery address is in a state configured for tax collection
  • Pickup location is in a state configured for tax collection
  • It doesn't matter if it's a different city or zip code than the store

✗ Tax is NOT charged when:

  • Delivery address is in a state NOT configured for tax collection
  • Even if the state is nearby or the billing address is in a tax state

Important Examples:

  • Same state, different city: Store in Las Vegas (Nevada) ships to Reno (Nevada) → Tax charged at Reno rate
  • Different state, not configured: Store in Nevada ships to California, but California not in Tax Locations → No tax charged
  • Billing address doesn't matter: Billing address in Texas, shipping to Nevada (configured) → Nevada tax charged

Example Scenarios

Scenario 1a: Shipping - Tax Charged

  • Fulfillment method: Shipping
  • Store location: Las Vegas, Nevada (89101)
  • Store collects tax in: Nevada (89501)
  • Shipping to: Reno, Nevada (89501)
  • Billing address: Portland, Oregon
  • Tax charged: Reno rate at 89501 (delivery zip is configured)

Scenario 1b: Shipping - No Tax Charged

  • Fulfillment method: Shipping
  • Store location: Las Vegas, Nevada (89101)
  • Store collects tax in: Nevada (89501)
  • Shipping to: New York, New York (10001)
  • Billing address: Reno, Nevada
  • No tax charged (zip 10001 not configured in tax locations)

Scenario 2a: In-Store Pickup - Tax Charged

  • Fulfillment method: In-Store Pickup
  • Store location: Las Vegas, Nevada (89101)
  • Store collects tax in: Nevada (89101)
  • Your home: Reno, Nevada
  • Billing address: Portland, Oregon
  • Tax charged: Las Vegas rate at 89101 (store pickup zip is configured)

Scenario 2b: In-Store Pickup - No Tax Charged

  • Fulfillment method: In-Store Pickup
  • Store location: Los Angeles, California (90001)
  • Store collects tax in: Nevada (89101)
  • Your home: Los Angeles, California
  • Billing address: Nevada
  • No tax charged (store pickup zip 90001 not configured in tax locations)

Scenario 3a: Curbside Pickup - Tax Charged

  • Fulfillment method: Curbside Pickup
  • Store location: Henderson, Nevada (89014)
  • Store collects tax in: Nevada (89014)
  • Your home: Las Vegas, Nevada
  • Billing address: California
  • Tax charged: Henderson rate at 89014 (store pickup zip is configured)

Scenario 3b: Curbside Pickup - No Tax Charged

  • Fulfillment method: Curbside Pickup
  • Store location: Henderson, Nevada (89015)
  • Store collects tax in: Nevada (89014)
  • Your home: Las Vegas, Nevada
  • Billing address: Nevada
  • No tax charged (store pickup zip 89015 not configured in tax locations)

Scenario 4a: Local Delivery - Tax Charged

  • Fulfillment method: Local Delivery
  • Store location: Henderson, Nevada (89014)
  • Store collects tax in: Nevada (89101)
  • Delivery to: Las Vegas, Nevada (89101)
  • Billing address: Arizona
  • Tax charged: Las Vegas rate at 89101 (delivery zip is configured)

Scenario 4b: Local Delivery - No Tax Charged

  • Fulfillment method: Local Delivery
  • Store location: Henderson, Nevada (89014)
  • Store collects tax in: Nevada (89101)
  • Delivery to: North Las Vegas, Nevada (89030)
  • Billing address: Nevada
  • No tax charged (delivery zip 89030 not configured in tax locations)

Scenario 5a: DoorDash Delivery - Tax Charged

  • Fulfillment method: DoorDash
  • Store location: Reno, Nevada (89501)
  • Store collects tax in: Nevada (89431)
  • Delivery to: Sparks, Nevada (89431)
  • Billing address: California
  • Tax charged: Sparks rate at 89431 (delivery zip is configured)

Scenario 5b: DoorDash Delivery - No Tax Charged

  • Fulfillment method: DoorDash
  • Store location: South Lake Tahoe, California (96150)
  • Store collects tax in: California (96150)
  • Delivery to: Stateline, Nevada (89449)
  • Billing address: California
  • No tax charged (delivery zip 89449 not configured in tax locations)

Scenario 6a: Uber Eats Delivery - Tax Charged

  • Fulfillment method: Uber Eats
  • Store location: Las Vegas, Nevada (89101)
  • Store collects tax in: Nevada (89102)
  • Delivery to: Las Vegas, Nevada (89102)
  • Billing address: Texas
  • Tax charged: Las Vegas rate at 89102 (delivery zip is configured)

Scenario 6b: Uber Eats Delivery - No Tax Charged

  • Fulfillment method: Uber Eats
  • Store location: Las Vegas, Nevada (89101)
  • Store collects tax in: Nevada (89102)
  • Delivery to: North Las Vegas, Nevada (89030)
  • Billing address: Nevada
  • No tax charged (delivery zip 89030 not configured in tax locations)

Scenario 7a: Instacart Delivery - Tax Charged

  • Fulfillment method: Instacart
  • Store location: Carson City, Nevada (89701)
  • Store collects tax in: Nevada (89701)
  • Delivery to: Carson City, Nevada (89701)
  • Billing address: Oregon
  • Tax charged: Carson City rate at 89701 (delivery zip is configured)

Scenario 7b: Instacart Delivery - No Tax Charged

  • Fulfillment method: Instacart
  • Store location: Carson City, Nevada (89701)
  • Store collects tax in: Nevada (89701)
  • Delivery to: Reno, Nevada (89502)
  • Billing address: Nevada
  • No tax charged (delivery zip 89502 not configured in tax locations)

Key Takeaway

Sales tax follows the physical location where you receive your goods, not your payment information. This ensures compliance with state and local tax laws.

Still have questions? Please contact our customer support team for assistance.

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