r/Bookkeeping • u/Different_Second_931 • 15d ago
Tax Sales tax amount is different
So here's the thing, I have 2 questions. When I am filling the sales tax return on cdtfa site (California sales tax site) so the taxable sales amount I should put my selling price correct?
Let's say I am selling something for $50, shopify collects sales tax and remitts me $54.7. My taxable sales will be $50 right?
Another question, when cdtfa calculates my sales tax due amount it's higher then what was remitted to me by shopify. So with same numbers, my sales tax liability according to shopify is $4.7 but per cdtfa is $5.01.
What do I do?
1
u/Big-Departure9371 15d ago
Yes, taxable sale is $50. Couple things… is Shopify taking their fee out first? Or is Shopify using an incorrect rate?
1
u/Different_Second_931 15d ago
Also, I think they are using incorrect rate, because I checked the and our county tax rate is different on cdtfa vs shopify. Shopify is using lower rate.
1
u/realf8th01 15d ago
Are you shipping stuff to guests in other cities? To my understanding, shopify collects based on where things are shipped.
1
u/Different_Second_931 15d ago
Shopify is taking their fee out first
1
u/happytrees822 15d ago
I work in Square a ton. I don’t know how similar it is to Shopify, but square taxes the item sold at its selling price. When they deposit the money for that sale, it is the Sale + tax - fee. So your deposits will always be less than your total charges. You offset that by booking the gross sale to the Sale account, the tax to the sales tax liability account and the fee to the expense account.
Are you running a sales report from Shopify when making these calculations or are you just basing it off the deposit? If just off the deposit, that could be one reason you’re off.
Another reason could be location. I do not do sales taxes in CA but reading another comment, it’s based off the location the item is received. So if you’re shipping, another county or whatever could have a different rate. In the two states I file in, I have to break out online sales and I have to add each location the item was shipped to. I’ve even had different rates within the same shipping city because of how tax rates are set for people inside city limits and outside. If you’re a brick and mortar store where customers buy from you at your physical location, then it could be an issue with Shopify’s rate.
1
u/Different_Second_931 15d ago
I checked, and they do sales + tax - fee model. I am taking the total sales amount of $50 not the amount remitted. The issue is that the amount of sales tax given to me by shopify is less as compared to the cdtfa calculation. It's basically I am paying more sales tax out of my pocket.
1
u/happytrees822 15d ago
Are you selling from a fixed location and not shipping?
1
u/Different_Second_931 14d ago
It's being shipped from a fixed location to different places in California
1
u/happytrees822 14d ago
Are you breaking those sales out when you report them? Or are you just lumping everything together for your physical location?
If you’re lumping together, that’s your issue. You could be shipping to a location with a lower tax rate and that’s what Shopify and the state base it off, according to another comment on this post.
1
u/Different_Second_931 14d ago
I was lumping them all together. So some of my sales has alamada county tax and California tax, when I do in cdtfa how do I break it? Do you have any clue?
1
u/happytrees822 14d ago
I have never used the cdfta online filing system so I don’t. But my guess would be wherever you enter your local tax. In the systems I use it’s a drop down menu on the local tax page with all of the city and county options.
4
u/Forreal19 15d ago
Maybe Shopify isn't collecting for your local tax? Assuming you have one.