According to the The Board of Equalization, we have to charge tax to California residents based on location, NOT zip codes. They have a file online you can download those tax rates here: http://www.boe.ca.gov/sutax/pam71.htm, but it only includes cities, tax rates and counties. I can’t upload this to Magento, because it isn’t in the right format. It seems magento only looks at zipcode.
Hand entering this would be crazy, especially since the rates update every quarter.
I’m not understanding how to use magento properly when I charge tax, according to the BOE, . Has any other California user been able to do this? Thanks!
This is an enormous issue for us as well. Basically, anyone who has a business and customers in California and uses Magento has no way to correctly tax customers and follow the law. This is a huge, huge problem. It’s unfortunate that the California tax laws are a headache, but there has got to be some way to implement in Magento.
This is a tremendous problem with Magento. Any California based business using Magento is going to have problems with the BOE when they report the wrong sales tax rates. I’m a bit surprised that Varien, which is based in California, setup the tax module incorrectly.
To support this we’re planning to customize the Cybersource integration and have Cybersource calculate the tax based on the line items we pass in. Cybersource as part of their service environment can do a delivery address verification and then calculate the tax based on the geo location rather than the zip.
If you do a web search of anyone who has this sort of module to calculate CA sales tax correctly, you’ll find very few--none in my opinion who are credible--outside of the big payment processors and ERP software providers. Magento isn’t alone in not tackling it. Rather than gnashing on Varien, consider writing your CA congress people. It’s beyond insane to not only do the CA calculations, but wait until you try to remit it back to them and have to divide the tax take between the origin and destination addresses. The law is bad, not the software. Hard to automate a mess.
consider writing your CA congress people. It’s beyond insane to not only do the CA calculations, but wait until you try to remit it back to them and have to divide the tax take between the origin and destination addresses. The law is bad, not the software. Hard to automate a mess.
I can’t imagine that software development could be anywhere near as difficult or slow as getting our state legislature to do something that makes any sense.
However, using a zip code for calculating the sales tax does not make any sense no matter what state you live in. There is no state that recognizes the zip code as a dividing line of jurisdiction. This is because zip codes are made up by the Post Office, which is not part of the government. There are zip codes all around the country that cross over county and even state boundaries. This is not something isolated to California. The only reason California is difficult is because we are required to pay the tax from the location of the customer rather than just paying the tax of our business location. Yes, this is a pain in the ass, but it still doesn’t change the fact that no commerce system should use a postal address to determine the sales tax.
Some shopping carts have solved this issue by creating tax zones for a county/city rather than just a zip code.
COUNTY CITY STATE TAX % COUNTY BASE TAX % COUNTY ADJ % CITY SPECIFIC % CITY ADJ %
Fresno Clovis* 7.250% 7.975% 0.725% 8.275% 0.300%
In this example, Fresno County has an additional 0.725% tax. Also, Clovis sticks on an additional 0.300% sales tax. This way, we could have a zone called CA-Fresno County-Clovis with a tax rate of 8.275% Any order coming from Clovis should be charged that much in taxes and the reports in Magento would be accurate.
In the case where there is no city match, the default state tax should be charged.
Ideally, the any commerce solution’s tax zones should be setup based upon legally recognized boundaries, not postal codes. After all, you are not paying the post office your taxes, you are paying your state, county, and city.
ouch. I can’t even imagine maintaining something like that and keeping it accurate whenever Retroville or Retro County decide to change a tax rate. In addition, based on what you’ve described, you now have to ask for the shoppers physical address, including county and accurate city/township--not their postal address (even if you use UPS and deliver to the postal address). To make the look up work, do all the counties and cities need to be prepopulated in some sort of drop down?
I’m still opting for calling a webservice that maintains and updates those rate tables on an ongoing basis and can do the geo location for us.
ouch. I can’t even imagine maintaining something like that and keeping it accurate whenever Retroville or Retro County decide to change a tax rate. In addition, based on what you’ve described, you now have to ask for the shoppers physical address, including county and accurate city/township--not their postal address (even if you use UPS and deliver to the postal address). To make the look up work, do all the counties and cities need to be prepopulated in some sort of drop down?
I’m still opting for calling a webservice that maintains and updates those rate tables on an ongoing basis and can do the geo location for us.
kara, Yes, a web service is likely the best route to go. Of course, that would then need to tie into Magento. I have found a zip code to sales tax mapping company called Zip2Tax that I am going to use in the interim to a permanent solution. sales tax should not be charged by zip code, but it is at least better than attempting to go to the FTB and show them the same tax rate for every order
This is a tremendous problem with Magento. Any California based business using Magento is going to have problems with the BOE when they report the wrong sales tax rates. I’m a bit surprised that Varien, which is based in California, setup the tax module incorrectly.
This is not a problem with Magento, it is problem with the crazy state you do business in
It seems to me that California wants to make it impossible to conduct business there with insane taxes and insane laws, no wonder they are bankrupt.
My company - AccurateTax - is new to Magento, but we have created a REST XML-based Software as a Service (SaaS) solution that provides zip+4 sales tax calculations, which also has the ability to scrub and validate US addresses to determine the zip+4 codes (since how many of us actually know our zip+4??) I’ve contact Varien as well, and will hopefully hear back from them if they are interested in adding this as a partner solution, however, if there’s enough interest from the user/merchant community we are happy to press forward with creating an integrated solution specifically for the Magento platform.
You can learn more about our offerings at http://www.accuratetax.com. We’d like to hear from Magento merchants or partners who see the value in our solution. If anyone wants to learn more you can also attend one of our webinars: http://www.accuratetax.com/webinar.html for more information.
Did anyone ever figure this California tax thing out?
According to the BOE we are not suppose to charge tax by zip code however that seems to be the only way I can get close to being legal?!?
Any suggestions… Does Magento ever plan on updating this information to be based on county? (p.s. all states taxes are based on district or county NOT zip codes)
We had to have a custom solution developed to work with the California taxes. It’s impossible as far as I can tell to use Magento in California and calculate taxes in a legal manner without some sort of custom solution stepping in to take care of it.
The AccurateTax Basic version is now available for Beta Testing for any interested storeowners. The AccurateTax service allows shoppers to simply enter their ship to/bill to information have subsequently parses that information to determine the proper sales tax calculations based on the rules of the state that the storeowner has a nexus in. The module uses the zipcode entered by the shopper to calculate their applicable sales tax rates and returns the proper percentages and amounts to the store for final checkout processing.
The data is entirely managed on our server, so there is no monthly re-work for the storeowner to deal with in getting new rates in place.
This module is a beta release at this point, so anyone who signs up now as a tester will get a 20% discount off their first three months of service, even if we ultimately don’t use you as a tester, you’ll still get the discount.
If you’re interested in participating in the beta, you can contact us at or 866.400.2444.
