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How to Fix Incorrect Sales Tax on In State and Out-of-State Orders in Webgility Desktop

This article helps Webgility Desktop users resolve issues where sales tax is incorrectly applied to out-of-state orders in Webgility Desktop. It explains how sales channels typically calculate tax based on the merchant's configuration and outlines step-by-step verification and remediation procedures to ensure taxes are only charged on orders shipped to the store’s home state (e.g., Massachusetts), maintaining compliance and a smooth customer experience.

Overview

Ordering platforms often calculate sales tax based on the merchant's tax configuration. A common requirement is to charge sales tax only on orders shipped to the store’s state (e.g., Massachusetts), while exempting out-of-state orders. When tax is incorrectly downloaded or applied to out-of-state orders, it impacts compliance and customer experience.

This guide outlines step-by-step verification and remediation procedures for addressing the scenarios where taxes are being incorrectly applied to out-of-state orders.

Understand the Tax Configuration

  • Store base location: Confirm your business address/state (e.g., Massachusetts).
  • Platform tax settings: Review the tax rules or mappings for destination-based taxation.
  • Tax provider integration: Check if third-party tax services (e.g., Avalara, TaxJar) are enabled and correctly mapped.

Diagnostic Steps

  1. Review Existing Tax Rules
    • Go to Connections > Accounting/POS/ERP > Sync Settings > Sales Tax in the admin panel.
    • List all tax rules/zones. Note if there are state-specific overrides.
  2. Simulate Orders
    • Create test orders to both in-state (e.g., Massachusetts) and out-of-state addresses.
    • Confirm that tax is charged on MA addresses only.
    • Document any instances where the platform downloads/applies tax to other states.
  3. Check Tax Provider Mappings
    • In third-party tax integrations, verify which states are mapped for collection.
    • Review API credentials and jurisdiction tables for Massachusetts-only mapping.
  4. Audit Platform Updates
    • Review recent updates or patches that may have altered tax logic or mapping defaults.

Remedial Actions

  1. Correct Tax Rules and Zones
    • Remove or disable any tax zones for states other than Massachusetts if not needed.
    • Ensure the Massachusetts tax zone includes only pertinent zip codes.
  2. Update Tax Provider Configuration
    • For providers like Avalara, restrict mapped jurisdictions to Massachusetts.
    • Reauthorize or refresh connection to ensure mapping changes take effect.
  3. Test and Validate
    • Repeat order simulations after adjustments.
    • Confirm only in-state orders apply tax.

Additional Tips

  • Periodically review their tax mapping after system or plugin updates.
  • Consult a tax professional to verify compliance with tax laws.