email me at john@johnchristensenwebdesign.com

I’m going to start with a quick plug for my company’s product offering and then just give you some general advice on your problem.

My company offers a line of products (http://www.gotsst.com) specifically designed to solve the problem of calculating and charging the correct sales tax rate for the Washington State Streamlined Tax requirement. All of our solutions are designed for very low cost implementations. Specifically, we offer a web service based solution that is very easy (for a programmer) to integrate into your existing website – this product takes an address as input and return the correct tax code and tax rate for further processing. The web service starts at a cost as low as $60/quarter, but that doesn’t actually cover the programming required to get this integrated with your shopping cart. We also offer a series of products that integrate with common small business accounting packages (like Intuit’s QuickBooks) – these products are designed to calculate the correct sales tax rate for invoices or sales receipts that are entered manually by you.

Now for the general advice on addressing your problem: The Washington DOR put on a whole series of public meetings prior to the adoption of the streamlined sales tax in an attempt to educate the business community. I attended many of these meetings throughout the state (mainly to plug our products). The recurring theme throughout all of these meetings was that many small online retailers simply don’t have the technology (or resources) available to correctly calculate and charge the correct sales tax rate. The DOR clearly understands this issue and even indicated that they had been trying to work with companies like PayPal to help them solve this problem – but to no avail. Anyways, all of that said, if you don’t have the resources available to solve this problem via programming, then I strongly recommend that you simply contact the WA DOR and ask them for an evaluation of your situation (they may do this over the phone or onsite). The result of the evaluation will almost certainly be a compromise – something along the lines of charging a flat tax rate for your WA purchases and then calculating the correct rate and paying the difference when you file your taxes. I really believe that the DOR will work with you on this problem – particularly if you’re proactive about it.

A couple of other notes:

-The State of Washington used to have (not sure if it is still available) a $2000 tax credit that was available for businesses to cover either implementation or service costs associated with moving over to the new streamlined sales tax. Should you decide to tackle this problem yourself, you should check to see if this credit is still available.

-If you’d like, you can send me some information about your shopping cart application. I’d be happy to contact your shopping cart vendor to see if they have an interest in integrating their product with my company’s service.

Sorry for the long response – hopefully some of this information is useful to you. Don’t hesitate to shoot me an email with any questions.

Regards,

Ken
ken@snowcapsoft.com

Your shopping cart is written in PHP, so adding the functionality shouldn’t be a problem, though I say that without having actually seen any of the code behind your shopping cart. *heh*

There are two issues that have to be dealt with. The first is that you can’t rely on the customer. What I mean is that the tax rates can vary based on the Zip+4. Sometimes, it varies a lot, based on which side of a city or county boundary a house lies on. If your customer doesn’t know his full Zip+4, then you need to be able to look it up based on his address.

That will probably involve a post office database and associated address normalization. Honestly, if you’ve got a mail order business, you should be doing that already, anyway. (This is going to cost you a periodic subscription fee.)

Second, when you have the full Zip+4, you do a lookup in the DOR database to find the appropriate tax rates. They have tools that let you do this over the internet nowadays, or you can setup a local database (your web host probably allows mysql if they allow PHP) and then you just have to update it quarterly.

All of this back-end stuff would happen BEFORE submitting to PayPal.

It gets worse. The forms you submit to the DOR monthly require you to break down your payments based on zip code groupings (location codes). That means you’re going to want some kind of reporting utility also, unless your volume of orders is small enough that you don’t mind going through your orders database by hand once a month and adding them up yourself.

The best solution of all would be to contact the vendor of your shopping cart and see if they offer a module that handles all of this for you. If not, then you’re left with hiring someone to custom code a solution for you and integrate it with your shopping cart.

Though one simple way to handle it is to figure out the highest rate in the state, charge everyone that, and hope that nobody notices that some people are being overcharged…

I’ve done this for my employer’s website; the caveat being that we own and control all of the servers in-house. We’re not hosted by an ISP, so I was able to do some things that might be more difficult if you aren’t able to easily add software to your web server.

My email address is scott@cjhunter.com if you have specific questions you’d like answered about how I solved this problem for our setup.

Scott Schultz

Has anyone used PayPal to process payments? How do you collect the right WA sales tax? We have not gone live yet so haven’t had any sales. I’m totally overwhelmed with how to do this.

Any suggestions on how to incorporate this via PayPal?

Has anyone taken the appoach to look at each zip code group and then just apply the highest rate of that group to just that zip code and drop the +4?

I’m building a site for someone in WA in joomla/virtuemart… can anyone help me integrate this… um… brilliant technology?

Any software that may be developed to solve these issues won’t help me, because I don’t have a shopping cart on my website. Oddly, a large percentage of people ordering my products don’t know what they want in the first place… so how can they “add to cart” before getting answers to at least a dozen questions. When I ask customers what their sales tax rate is – most of them don’t know, so I rely on the DOR website to calculate it for me. This is a huge nuisance.

If a customer wants my products, he/she will now have to drive down to my shop and pick up their order. Simple as that. 99% of my internet-based sales are to out-of-state destinations, so it won’t hurt me that much.
I feel sorry for all the people wasting their resources to try to comply in good faith with the Washington State’s “experiment” that is going to end up costing everybody a lot of time and worry. Not me! Enough’s enough!
I wonder how many of the Legislators who voted to implement this stupid arrangement even know what it entails. If I had my say on the subject, here’s what I would vote YES for: Going back to the “origin-based sales tax”, with only one sales tax rate in the State; that rate being set for the entire year without all the changes each quarter. That’s too simple – but how happy it would make all Washington Retail businesses!

Check us out – Bright Spectrum (www.brightspectrum.net)

The flat rate is the best system. Some may argue that they pay a lower sales tax where they live and it’s not fair. To them I ask, “When you go out of your town or county, do you expect to pay a lower tax?” I don’t think so; you pay what the next town or county charges.

One rate for the Internet State Tax, the average works out to 8 %. A little higher for some, and a little lower for others. In the end the State of WA gets there monies, and does away with my headache.

My take on this is that they intended to perform standardization as well, but somebody realized that the license on their address processing software didn’t allow it (the CASS software we use internally has such a license – it can serve unlimited users as long as the info doesn’t leave the firm), or someone just decided it would be bad for the government to effectively be competing with the private sector in the area of address correction.

This is the kettle of fish that small businesses are in. To do it right, you really need to invest in an address standardization system, subscribe to regular updates, and keep a database of the tax rates and locations, also updated regularly.

You’re also depending on the DoR site to be working correctly 24/7. At the moment, that doesn’t seem to be the case. After some discussion here, I decided to code in a call to the DoR service as a backup in case the internal server is down or can’t resolve the address. Starting around 2:00, the DoR service stopped responding correctly. This morning, it was fine again.

I guess it’s a good thing that they’re supplying some sort of solution for businesses but I’d a bit leery about having to rely on it. Of course, until SSUTA actually goes online, you could really just ignore the whole issue, charge everyone 9%, and deal individually with anybody who wants a refund of the pennies they might have lost due to being overcharged on their sales tax.