How does sales tax work when shipping internationally?

How does sales tax work when I am shipping a good internationally?

 

 

For example, if I live in LA, the sales tax is 9.5%. If I am shipping to someone in Texas, then do they pay the 8.25% sales tax, or the LA 9.5%?

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@InspiraMerchadi I’m assuming that LA stands for Louisiana, and so a shipment from LA to Texas would be interstate, not international.  If that is the case….

 

If the customer picks up the item at the seller's location, tax should be collected for the state in which the seller is located. If the item is shipped to the customer, then tax applies for the delivery state, whether that is the same state where the seller is located or a different state. (From https://www.salestaxinstitute.com/sales_tax_faqs/where_to_collect_sales_tax)

 

Once you collect sales tax for another state, you are also responsible to file a sales tax return with them and pay the sales tax you collected.  This can get very complicated very quickly, since you have to have a sales tax account for every state you ship to.  There are, however, great apps that you can link to your Square account to take care of all of this for you.  These apps calculate the correct sales tax that you need to charge, and then are responsible for filing and remitting that to each state on time.  Trust me when I say that you DO NOT want to try to do this yourself, just like you don’t want to ever try to process your payroll yourself.  You’ll go insane quickly.

 

Go to your Square Dashboard, then head over to the App Marketplace.  Search for “sales tax” and you’ll see apps like Davo and TaxJar that automate the process for you, and keep you legal and fully compliant.  This is an area you might want to discuss with your accountant or tax advisor, because they might have ideas about what would work best for you.

 

Best of luck,

Chip A.
Square Expert & Innovator and member of the Square Champions group. (But NOT a Square employee, just a seller like you)

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