How do I handle taxes and shipping costs?

Free Member
ahartzell
Posts: 5
Joined: 04 Jun 10
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4 Jun 10 03:55:09 am
Hey everyone, I'm VERY new to selling online and dropshipping. I have two big questions:

1. How do I handle taxes when selling online? How do I figure rates for specific areas? Which areas do I even charge sales tax for? Most of the stuff I've bought online has never been taxed. Some websites only charge tax for CA. How do I know what to do?

2. How do I figure shipping costs for each purchase especially since I will probably have more than one dropshipper? I'm in AR, but what if someone in TX buys a product from me that is shipped from my supplier in DE (for example). Or someone in CA buys something shipped from TX. How do I figure all these different shipping rates into the price?

Thanks in advance!


Andrew
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Free Member
eapendaniel
Posts: 3
Joined: 03 Jun 10
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4 Jun 10 04:59:36 am
About the tax part, if both seller and buyer are in the same state then the sales tax of that state applies. You charge sales tax to a buyer from AR. AR sales tax+the local tax of your county. Hope I'm right.

Free Member
ahartzell
Posts: 5
Joined: 04 Jun 10
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4 Jun 10 05:07:12 am
Ok - so unless they are in AR, I don't charge? How do I know where they're from?

I'm using Zen Cart by the way...


Andrew
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Full Member
grace-salehoo
Posts: 331
Joined: 15 Jun 06
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4 Jun 10 07:49:39 am
I haven't used Zen Cart myself, but from reading their help, what I understand is this:

You can set up different geographical zones, and assign different tax classes to those zones.

So if you have a drop shipper in TX, set up a zone for TX and assign the sales tax rate for TX. If you have another drop shipper in AR, set up a one for AR and assign it a tax rate.

I assume people have to fill out a few details at checkout, like their country and state, so the software will use that data to automatically calculate their final total.

These articles will hopefully answer both your tax & shipping questions:

Tax

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Shipping
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Grace

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