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26 Replies Latest reply: May 24, 2011 3:00 PM by sjwhitellc RSS

Florida sales tax for web business

drronin Newbie
Currently Being Moderated
I am in Florida and I am in the process of setting up a web cart for
a new online business.

I have spoken with the Florida Dept of Revenue and they say that I
must collect sales tax for all sales to parties in Florida. Also, that
sales taxes vary county by county and this must be taken into account
for each such transaction.

I wonder how businesses are handling this in their online shopping carts?
One solution is to include in the drop down menu of US states (as a buyer
is indicating their address) to include the list of all Florida counties, e.g.,
FLORIDA-PASCO, FLORIDA-PINELLAS, FLORIDA-POLK, etc. and
calculate the sales tax based on the the tax rate for each county.
This would work but it is rather clunky and obviously makes for a very long
list of states in the drop down menu.

How are other people handling this? Is there a better way?

Also, some products I may sell are digital files that can be downloaded
from the web site and others are physical items--is there a difference in
taxation for these? Are downloadable products (like an e-book) taxed?

Thanks,

Drronin
  • Re: Florida sales tax for web business
    vnavguys Expert
    Currently Being Moderated
    I have an ecommerce site in florida and collect sales tax. This is easy. In your shopping cart backend there will be a place to set up the state and tax rate for your business. When your done with that, your customers will be taxed for florida if they are florida residents, all others pay tax free. Its simple, if you have a decent shopping cart.

    Ken
  • Re: Florida sales tax for web business
    amspcs Master
    Currently Being Moderated
    You're right, it IS complicated. I'm in Florida also, and I know the sales tax rates in Broward/Palm Beach
    and Dade are not the same.

    The CORRECT way to get the right answer would be to consult with your accountant. However, I THINK the way it's handled is, the rate that applies is where YOU are located, not necessarily the buyer. But again, check with your accountant.

    AMSPCS
    amspcs@juno.com
    www.MerchantServices-help.com
    • Re: Florida sales tax for web business
      drronin Newbie
      Currently Being Moderated
      Thanks also.

      When I spoke with the FL Dept of Revenue I was told that I needed to collect sales tax based on the county in which the buyer received the goods. However, it is clear that many people believe that collecting sales tax based on the county where the business is located is ok. That would be much simpler, but not in accord with the law, it seems. So, I am trying to work wiht the added complexity, which is a headache, needless to say, but probably less of a headache than getting audited by the Dept of Revenue!

      regards,

      drronin
      • Re: Florida sales tax for web business
        amspcs Master
        Currently Being Moderated
        I hope nobody from the Fla Tax Dept is reading this. But the truth is, you're dealing with a bunch of unrealistic, selfish, clueless individials in the tax dept. . As far as collecting sales tax in either business or customer county, you can bet that, if given their choice, BOTH counties would demand their piece of the action on the same transaction. They don't care what's reasonable, what's feasable, what's fair....all they know is there are a couple of dollars to be had and THEY want it. Again, consult y our CPA and do what he/she says. Do you need the name of a good, reasonable CPA here in South Florida? I can provide same if you need it.
        AMSPCS
        amspcs@juno.com
        • Re: Florida sales tax for web business
          drronin Newbie
          Currently Being Moderated
          If you can recommend a good CPA in Lakeland, please do.

          Thanks,

          drronon
          • Re: Florida sales tax for web business
            bdh1776 Newbie
            Currently Being Moderated
            I am also setting up an e-commerce business in Florida and am running into the same problem. All counties have different rates and taxes are to be collected on the rates of the counties where the purchase was made. I have no idea how I will be able to do this with a Yahoo store so I'm hoping someone will be able to shed some light on the subject. Also, if it is somehow possible to calculate and collect differing sales taxes, then I assume a portion of the tax would not go to the state, but rather the county. How in the world would that be accomplished without it being a major headache? I spoke with a member of SCORE about this problem but he did not have a solution; only that the tax rates would be different per county sales. Any help would be appreciated. Thanks.
            • Re: Florida sales tax for web business
              drronin Newbie
              Currently Being Moderated
              You are raising yet another complex issue...Is it the web business owner's responsibility to see that each county gets its share? I don't recall the Dept of Revenue mentioning this, nor have I seen this stated anywhere, or the opposite in fact. My guess is that this is not the owner's responsibility--if it IS, then it hardly seems worth opening a web business in Florida. I suspect the state gets the whole amount and somehow gets a share back to the counties, but I hope someone here will provide a definitive answer.

              I'm not familiar with Yahoo stores. I can say that the Dreamweaver plug-in I am using for store development--Cartweaver--is a reasonably-priced, flexible, and customizable solution. And once development is done it is not too hard for a novice to maintain and run the store. One solution for the county tax problem is noted in my first post--the suggestion was offered by Cartweaver author.

              Regards,

              drronin
              • Re: Florida sales tax for web business
                bdh1776 Newbie
                Currently Being Moderated
                drronin,

                I, too, had thought of the solution of adding all the counties tax rates into the cart but thought that there must be an easier solution. I'm not even sure if Yahoo has the capability of doing it that way. I wish I was able to use Dreamweaver, but I'm not familiar with it. I'm trying to learn some HTML but at this point I have so many additional topics to research before commencing with the business that I'll have to put that on the back burner for now. I'm going to put a call into the Dept. Of Revenue tomorrow and see what they say about the county tax issues. I absolutely want to set the ecommerce biz up legally but it seems like no one has the answers. I'll post tomorrow and let you know if I get any answers.

                Barbara
              • Re: Florida sales tax for web business
                bdh1776 Newbie
                Currently Being Moderated
                drronin,

                Spoke with Dept. of Revenue today and the Discretionary Sales Surtax that is collected at the county level is distributed by the state to the individual counties after a business submits their sales tax. That's one headache that we don't have to deal with, although it requires a business to submit their sales tax with a long form that is broken down into counties. Businesses would then input the sales tax they received from sales from each county. AAGGH!

                http://dor.myflorida.com/dor/forms/2008/gt300015.pdf
                The above website offers detailed information about sales tax in Florida and may be helpful to you.

                http://dor.myflorida.com/dor/forms/2009/dr15dss.pdf
                The above site lists each county within Florida and their Discretionary Sales Surtax. This rate can also change every year.

                Again, I think the only way to be able to collect the proper taxes is to have a drop down with each county but that seems like such a pain. I can't believe I haven't come across a solution from other online businesses in the same situation but I am starting to believe that many of them collect taxes based on THEIR location, rather than the customer location.

                If anyone has any additional input I would be happy to hear it.

                Thanks.
                Barbara
                • Re: Florida sales tax for web business
                  bdh1776 Newbie
                  Currently Being Moderated
                  Spoke with another Florida merchant. He handles this problem by setting 7% as his default in the system, since that is the major tax rate. Then he adjusts all the other zipcodes accordingly. Major work because it is now done by zipcodes, rather than counties but that is the way his system is set up. It looks like that's the way I would also have to do it in Yahoo. This would then eliminate the need for drop down menus for your customers, making it an easier checkout for them. Hope this helps.
                  • Re: Florida sales tax for web business
                    drronin Newbie
                    Currently Being Moderated
                    Barbara,

                    Thanks for your investigation.

                    Though a lot of work, the zip code approach is appealing. But, isn't it the case that some zip codes areas cross county lines?
                    Maybe I am wrong. Hope so. If this is the case, then zip codes would not always give the correct sales tax.

                    Like you I have been surprised by how few people seem to know the facts about the proper way to handle the FL sales tax. No doubt that
                    the massive amount of work involved has been a barrier.

                    Thanks again for your efforts and suggestions.

                    drronin
                    • Re: Florida sales tax for web business
                      bdh1776 Newbie
                      Currently Being Moderated
                      You are correct about some zips crossing county lines. The merchant I spoke with said he had to be careful of that but there were only a few zips that this applied to.

                      Not to add another log to the fire, but is anyone aware if Florida requires sales tax on shipping within Florida? I thought not, but I'm getting differing opinions. I thought if it was invoiced as a separate charge, then no shipping taxes applied but I may be wrong. Still researching that.
                      • Re: Florida sales tax for web business
                        drronin Newbie
                        Currently Being Moderated
                        He says he has to be careful of that--sounds like it must be done manually, but what is an efficient way of doing that?
                        Is knowing the city enough to assign the right zip and find the right county or are some of these zips also across city lines? If not by city, then by city and street?

                        When he has an order from one of these zips, does he just have to look at a detailed map each time? Sounds almost impossible to accomplish with software, and when you have real time credit card approval for amounts that include sales tax, how do you handle these errors?

                        Thx.

                        drronin
                      • Re: Florida sales tax for web business
                        drronin Newbie
                        Currently Being Moderated
                        Barbara, have you settled on the zip code approach to calculating sales tax? Does it have shortcomings?

                        Also, did you find out about tax on shipping?

                        Thx,

                        drronin
                        • Re: Florida sales tax for web business
                          bdh1776 Newbie
                          Currently Being Moderated
                          Unfortunately since I've been working on other concerns, I put the sales tax issue aside for the time being (not that that will make it go away!) and will deal with it later. Any news on your end?

                          More bad news. Check out Florida rules 12A-1.045 regarding transportation. Sounds like the seller has to add on tax for shipping charges. Spoke with Dept. of Revenue and they said taxes must be collected on shipping charges. I mentioned about the charges being invoiced separately on the bill but they said that if the purchaser doesn't have a choice as to whether they can pick up the merchandise, then the seller must charge tax on the shipping. Makes you not want to do business in Florida.

                          Does anyone have a breath of sunshine to add to the tax issues?

                          Barbara
                    • Re: Florida sales tax for web business
                      drronin Newbie
                      Currently Being Moderated
                      I've just checked some resources and it appears that a single zip code may be in up to 3 different counties. I don't have a FL
                      zip code map, but nationally about 15% of zip codes are multi-county. Probably FL is no exception. So, figuring sales tax by zip code my prove to be inaccurate.

                      drronin
  • Florida sales tax for web business
    Chafu Newbie
    Currently Being Moderated

    As a business based in Florida, we are confronting the sales tax situation with our new website. The solution we have decided on is that when a user enters Florida as State on the registration page a  "required" new field labled "County" pops up on the form. It is a simple drop down list of all the counties in Florida. The user simply picks the appropriate county and that's it. When checking out the site does a lookup of the tax rate for the appropriate county and adds the tax to the invoice.

  • Florida sales tax for web business
    TahoePineWorks Newbie
    Currently Being Moderated

    I get pretty lucky as my web host already has a sales tax program in the shopping cart for every state In my latest research and speaking with our book keeper. You only have to charge sales tax from the county that you are in. You don't have to charge sales tax based on the location of the person that is purchasing just your city/county, etc. Hope it helps. Good luck

    • Florida sales tax for web business
      Lightstogo Newbie
      Currently Being Moderated

      What is your web hosting company working on a new website? Also we are planning a move to Florida with a web based business this is important to figure out ahead of time.

       

      Ty 

      Donna

    • Florida sales tax for web business
      drronin Newbie
      Currently Being Moderated

      Sorry to say I think your bookkeeper has it wrong. The last word is the Florida Dept of Revenue--check directly with them.

      Good luck,

      drronin

      • Florida sales tax for web business
        TahoePineWorks Newbie
        Currently Being Moderated

        Hi drronin,

         

        I would think not. Take the following for example. If your business is in section "A" you charge tax for that section, right? If your customer lives in say...Section "C" They are only going to pay the sales tax of your buisness location listed in section "A". Even the BOE confirms that the charge of sales tax is the tax of which the business is located. Just like if a customer is in New York, they are not going to pay New York sales tax, they are going to pay the sales tax in your location, right?  To me, it seems the state of FL has made things difficult. How many tax rates do you have? If they are giving you issues with sales from website, can't you break the purchase down per zip code then? Seems like a pain, really. Let's be honest...Unless your making millions from website, I really would not worry about to much right from the get go. We all know the first few years of buisness is a right off, loss, etc. After all take a look at all the eBay sellers, do you think they are paying sales tax?

         

        Best of luck

        • Florida sales tax for web business
          drronin Newbie
          Currently Being Moderated

          Tahoe,

           

          Let me guess--you haven't called the FL DOR yet, have you?

           

          For a web biz in Florida, you charge sales tax according to the county in which the goods are received.

           

          Chafu, above, has a good system.

           

          As you say, Tahoe, it is not simple. And you are right that your liablity for undercollecting might be small. However, I think

          the DOR can levy fines for those who ignore the legal way of doing things.

           

          In all seriousness, it is worth a toll free call to the DOR to get the skinny right from them.

           

          Best,

          Drronin

  • Florida sales tax for web business
    sjwhitellc Newbie
    Currently Being Moderated

    drronin has it right. It IS cumbersome and tricky.

    We are (very) small business owners in Florida. It's a lot of work being legit and official.

    We do only internet sales on eBay mostly.

     

    This website is full of informational links, especially at the bottom:

    http://dor.myflorida.com/dor/taxes/sales_tax.html

     

    But this table clearly states you charge the tax of the county you are shipping to:

    http://dor.myflorida.com/dor/taxes/discretionary.html

     

    Also, you can lookup the sales tax rate by address on this site:

    https://geotax.state.fl.us/dorPubIdx.jsp

     

    We are thinking of just charging a flat 7% rate and then charging case-by-case or "eating" the additional 0.5% that may be applicable in some counties.

     

    Since we use eBay it can be tricky to change the sale amount once the item is purchased.

     

    Tax on shipping? I saw in a thread above that it is charged if there's no local pickup option. Does this mean if we offered local pickup (whether or not they choose to use it) that we could not charge tax on shipping?

     

    So much to learn.

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