Destination-based Sales Tax - An update to Zen-Cart and Virtuemart builds.

Posted by: Tom Granger

January 25th, 2009

Everyone should be well into their Q1 tax changes for destination-based sales tax.

Here in the great State of WA - the total number of records for Zip +4 to help you calculate your destination based sales tax has grown from around 50,000 such records to a whopping 104,000+ individual fields for the various tax zones. If you are not familiar with this requirement, as of July 2008 - WA State is now requiring any business who ships products within the State of Washington to collect sales tax based on the destination that the goods are being shipped to.

Usually, we are talking about a different of a fraction of a percent. E.g. the difference between one +4 zip and the other next door paying .02% more for a sub-tax like the RTA (Regional Transit Authority). However, without a way to automate the collection and reporting on such a burden - businesses face a near-impossible and expensive set of bookkeeping tasks to stay on the good side of the Department of Revenue.

Further, it is a far easier task to deal with if you can calculate the real-time sales-tax on the fly based on the shipping address and get the customer to “confirm” the shipping address right there in checkout.
Right now we’ve got a system that helps businesses with:

• OSCommerce Destination-based Sales Tax
• Zen-Cart Destination-based Sales Tax
• Virtuemart Destination-based Sales Tax

  The methodology for dealing with destination-based tax can be found here. It involves using both a real-time mapping API to determine their Zip +4 based on the address entered, then is uses the current 100,000+ tax record database available from Wa State Dept. of Revenue. The method is the same for any state using Destination-based Sales Tax - however BE AWARE that the tax data seems to be changing every quarter. Even worse, is that the formats have changed at least twice in the past year as well. Additional collumns, etc make it hard to use import scripts to standardize loading your data. All of our deployments now have a CSV upload utility to map the fields for you - but then again, we’re awesome. True story.

Entry Filed under: The Business of Development