[thelist] E-commerce: Sales Tax lookup service

Joshua Olson joshua at waetech.com
Wed Dec 3 12:21:33 CST 2003

----- Original Message ----- 
From: "P. Barrett Little" <barrett at designercode.com>
Sent: Wednesday, December 03, 2003 12:12 PM

> I am building a shopping cart which requires sales tax rate lookup. With
> some US states having as many as 150 counties, this functionality will
> require the use of a 3rd party lookup service. I have found a number of
> services for enterprise applications, all of which are cost prohibitive.
> Does anyone have a preferred service or method of solving the problem?


There are a couple things that will help with this:

1.  Make sure you are clear on the need to collect taxes.  The basic rule is
that you need to collect taxes only for orders that are picked up or
delivered to a state where you have a business or business-front that is
required to collect taxes.

So, if you have only one store-front in Georgia, but are shipping to New
Mexico, the sale is tax free.

2.  Most states have their own lookup tables and forms for submittal of
taxes.  These are, as you've indicated, broken down by county and you'll
need to figure out which county each sale is in.  Most states have some
collection point that will redistribute the taxes out to the individual
counties, and may even be able to figure out for you which county based on a
partial address.  Contact the DOC for each state to see.

3.  Most DOC's will recommend that you collect the maximum tax for all sales
to any given state, which is the sum of the state base tax plus the optional
taxes counties can impose.  Each state will probably have different handling
procedures for any surplus, so check.

3.  If you open a corporation in a sales tax-free state (such as Oregon) and
do all sales under this corporation, then you can alleviate this need to
manage taxes.

Good luck,

Joshua Olson
Web Application Engineer
WAE Tech Inc.

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