Sales Tax


Ways to Manage Sales Tax

UltraCart provides four ways to manage sales tax.  They are listed below with their pros and cons.

MethodProsCons
UltraCart Managed
  • Default Method
  • Easy to setup
  • No additional Fees
  • United States only
  • Basic sales tax collection
Self Managed
  • All countries
  • Fine grained control of minute details
  • Manual setup of everything
  • Time intensive setup
  • Requires external tax tables
Avalara
  • Easy to setup
  • Complete tax solution
TaxJar
  • Easy to setup
  • Complete tax solution
  • Requires TaxJar plan
  • See TaxJar for additional restrictions
Sovos
  • Easy to setup
  • Complete tax solution



UltraCart Managed

The default and easiest way to collect sales tax for U.S. merchants is to allow UltraCart to manage tax collection. 
UltraCart Managed Rates is the defaulted selection unless another Sales Tax integration is selected.

Important Notice Regarding UltraCart Managed Rates

Important Note

Required Steps:

  • Activate UltraCart Managed as your tax provider.
  • Select all states where you wish to collect sales tax.


Activating UltraCart Managed as your tax provider

Selecting states to collect tax

Click the Settings button for UltraCart Managed.  On the settings screen, select a state and click the plus button to add it to the list of states where tax is collected.  When finished, click the Save button.


Editing State Level Options

You can edit the configured states to modify the state level options, by clicking the "pencil" icon:

State Level Options

Select the options you wish to enable or disable:

Then click the OK button to save the changes.

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Self Managed State Editor Settings

FieldDescription
Tax ShippingWhen enabled, Tax will be applied to Shipping cost for the selected shipping method.
Tax Gift ChargeWhen enabled, Tax will be applied to any configured Gift Charge configured in the gift giving configuration page.
Tax Gift WrapWhen enabled, Tax will be applied to any configured Gift Wrapping fee's configured in the in the gift giving configuration page.



Self Managed

Self managed sales tax collection allows merchants to configure every level of sales tax collection for both domestic and international sales.  

Required Steps:

  • Activate Self Managed as your tax provider.
  • Configure U.S. states for tax collection
    • Add counties to each state
    • Add cities to each county
  • Configure other countries for tax collection


Activate Self Managed as your tax provider


Configure U.S. states for tax collection

WIthin the settings for Self Managed, select a U.S. state from the drop down and click the plus button.  This will add it to your taxable states.

Self Managed Options

For self managed, you must either supply the tax rate for the state and local jurisdictions OR select the "Use UltraCart Managed Rates". 
The dialog window displays the following following settings:

FieldDescription
Quickbooks CodeSelf managed tax states may provide a custom QuickBooks Code for assigning a tax rate within QuickBooks.  All other tax providers merely send down the actual state, county, and city names to QuickBooks and the tax jurisdictions are automatically created.
Use UltraCart Managed Rates

Allow UltraCart to manage the Tax rates, eliminating the need to manually configure the rates for the State/County/City & Postal Code levels.
(*This option combines the best benefits of the UltraCart Managed option while also supporting the configuration of non-USA sales tax rates.)

Tax ShippingIf active, shipping is added to the taxable subtotal amount
Tax Gift WrapIf active, any gift wrap is added to the taxable subtotal amount
Don't collect state taxIf active, the state tax rate is not collected, while the other jurisdictions may (or may not) be collected
Don't collect county taxIf active, the county tax rate is not collected, while the other jurisdictions may (or may not) be collected
Don't collect city taxIf active, the city tax rate is not collected, while the other jurisdictions may (or may not) be collected
Don't collect postal code taxIf active, the postal code tax rate is not collected, while the other jurisdictions may (or may not) be collected




After saving, the state will appear in the list of states configured for taxation.


Click the plus button at the right of the state to add county tax rates.   The process is the same as the state tax rates.



Once the county is saved, click the plus sign next to the county to add city rates.


The Add City dialog contains the same fields as the state and county.   Repeat this process for as many states, counties, and cities needed.


If you need to add postal code tax rates to a city, click the plus sign at the right of the city and follow the same process as the other jurisdictions.

Configure other countries for tax collection

Other countries are located to the right of the screen.   The process for other countries is the same except it begins at the country level.  




Avalara Configuration


TaxJar Configuration


Tax Exempt Customers

For tax exempt customers you will need to utilize UltraCart's customer profiles functionality.  Customer profiles can be marked as tax exempt.  Typically merchants will allow tax exempt customer profiles to signup as wholesale customers and upload their tax exemption certificate (link available under Operations → Customer Profiles → Settings).  Please note that if you're utilizing TaxJar and Avalara you will also need to perform additional setup to link the UltraCart customer profile to the tax exempt profile within their tax management system.

Troubleshooting


Logs

Avalara and TaxJar record important communications for review.  Shopping cart tax calculations are not stored to logs, but any operation against an order is logged.  This means the final tax calculation is stored, as well as any transaction notifications (order placed and order refunded).

Within the Avalara and TaxJar settings screens are log buttons.  Clicking either button will display a log history.


The log files will contain the request and response make to the tax service.  

Here is an example.  If the logs fail to assist you in solving any problems, notify UltraCart support and involve them.

Reporting

The "Custom Period Sales" report contains sections pertaining to the Sales Tax collected for the orders during the reporting period.

To run the Custom Period Sales Report, navigate:
MAIN MENU → OPERATIONS  REPORTING  (REPORTS SECTION) CUSTOM PERIOD SALES

  • Sales Tax by State - (This section shows the sales taxes collected for the state level sales tax jurisdictions.)
  • Sales Tax by State / County - (This section shows the sales taxes collected for the State & County level jurisdictions.)
  • Sales Tax by State / County / City - (This section shows the sales taxes collected for the State ,County & City level jurisdictions.)


Frequently Asked Questions

Q: Where can I review a summary regarding the recent changes to the laws and regulations pertaining to Sales Tax collection for online merchants?
A: A great place to start is here: https://www.avalara.com/us/en/learn/sales-tax/south-dakota-wayfair.html
(*Please make sure to consult your CPA/Tax Professional to ensure that your business is in compliance with all tax jurisdictions, as this is outside the scope of the UltraCart service.)

Q: How can I determine the number of sales and revenue per state for a particular time period?
A: The custom period sales report (located under Operations > Reporting) has a section for Sales by US State which will provide those details.

Q: How is Sales Tax calculated if the item being sold is not shippable?
A: The sales tax calculation will use the customer billing address to calculate sales tax, if tax is being collected.

Q: How can I investigate the sales tax calculation in an order? 
A: Please review the troubleshooting section earlier in this document. You can use the tax rate calculation tool to compare the recorded sales tax in an order. If a discrepancy is observed, then you can further troubleshoot the calculation by viewing the logs to see the underlying calculation details.