Square Online Tax Nexus Questions

[StorypillarMeg]

Hey Everyone,

Square Online questions round 2 …

State Tax Nexuses (Nexi???):

-Is there a portal that tells me how much tax is collected for each state? 

-Am I responsible for keeping an eye on each state’s tax nexus limits, or does Square automatically collect sales tax regardless of whether or not I am located in the same state as the item's destination?

-Are the nexus limits calculated by where the buyer completes the transaction, where the item is delivered, or both?

Thank you in advance for any tidbits of insight you’re able to share.

-Meg

[JJ_]

-Is there a portal that tells me how much tax is collected for each state? 

You can find all Tax Reporting by visiting the Square Dashboard > Reports section. Once there you will see your Taxes Reports

-Am I responsible for keeping an eye on each state’s tax nexus limits, or does Square automatically collect sales tax regardless of whether or not I am located in the same state as the item's destination?

Square will apply and charge taxes per the Merchant's Settings and for this reason, we recommend reaching out to an Accountant or the Revenue Department of your State for them to better explain your Tax liability and how to proceed. Once you have that information you can set Square Online Taxes to meet your requirements. 

-Are the nexus limits calculated by where the buyer completes the transaction, where the item is delivered, or both?

As mentioned earlier Taxes will be calculated based on your settings but debited based on the Buyers location. 

I hope this information is helpful!

[StorypillarMeg]

Very! Thanks.

-Meg

[StorypillarMeg]

Hello again,

I will definitely reach out to a tax professional, but I stumbled on even more questions that I'm wondering if you can answer in the meantime:

-Do I need a tax certificate or resale license before operating my online store?

-Still confused about sales tax. You said it's calculated based on where I am located, but charged based on where the customer is. Is that where the customer has the item delivered, or where the online transaction takes place?  What does that mean when I remit the sales tax? Do I owe both my and my customer's state even though it sounds like it's only charged based on where they are?  

-It seems that some states charge sales tax on shipping and some do not.  I can't manually calculate and apply this as customers are placing orders, so how can I account for it?

Thanks again for any help you can offer.

-Meg

[_Violet]

Hi @StorypillarMeg - Violet here, following up for JJ_. It looks like you still need help with this, so I kept the ball rolling on your inquiry.

A "tax certificate or resale license" is not required before opening and operating your Square Online store.

The amount of sales tax charged on an online purchase is determined by applying the tax rate to the total price of taxable items in an order. Depending on business needs, you can include tax in the item price, charge tax on shipping and delivery fees, and use item-level tax rates for pickup, local delivery, and self-serve orders. You can configure the sales tax set up either manually or automatically. To learn more, please see this article from our Support Center.

I hope this information is helpful but please do let me know if you have any additional questions.

[StorypillarMeg]

Thanks!

-Meg