Let’s face it. Tax is boring from doing your taxes to talking about taxes unless its going to save you money. Today I wanted to switch things up a little bit and talk about tax and more specifically tax on your ecommerce website. There are 5 things to consider about taxation on your ecommerce website so let’s run through these scenarios in greater detail from charging tax on items above a specific amount to not charging tax at all.
1. Are you going to charge for tax above a specific amount?
In some tax scenarios it may make sense to charge for tax above a specific dollar amount. Some states have tax conditions for sales above a certain dollar amount and if this is the case chances are you’ll need to find a way to customize your shopping and checkout experience customers.
2. Are you charging tax on specific items or a specific group of items?
Certain ecommerce sites need to charge taxes on specific items that they sell depending on where their business is located and what is being sold. If you have a specific range of products that need to be taxed then you may fall into this category or type of item like clothing, merchandise, food items and more.
3. Are you charging tax at all?
Usually what happens with a lot of ecommerce site owners is the question of charging tax at all. For this I would suggest researching the tax laws around the business you are in for all the information just to be on the safe side. For instance, you may not need to tax if you sell downloadable items but give it your due diligence when looking into this. After all I am not a taxation expert… I’m a website expert!
4. Are you charging tax based on a state or province your customers are in?
This is a common a scenario you’ll find in ecommerce if there ever was one. Most businesses that operate in a specific state or province are subject to the taxes in the area where their business operates. Most beginner ecommerce platforms really don’t offer this level of customization so you may need a developer to address this concern or trade up to a better and more advanced ecommerce system.
5. Does your ecommerce platform take your tax concerns into consideration currently?
Depending on what you are looking for and the specifics of taxation on your ecommerce website you’ve got to ask “Can my ecommerce platform handle this functionality?” A lot of people get into an ecommerce website without ever raising this question before the website is finished and all of a sudden they are surprised that their ecommerce website cannot process transactions in the ways that they need to so this does bear some consideration when selecting an ecommerce platform.
You may face one of these scenarios or a combination of these scenarios when dealing with tax issues on your ecommerce website but remember that you can always contact a tax professional to discuss this more in depth and if you aren’t sure then save yourself the headache of dealing with the tax man when it comes to your ecommerce business.