Tax has not applied to shipments sent out of state. How can fix this?

[PriceKrishnan]

We are a brick and mortar art gallery in Minnesota, and ship art to other states. In the past, sales tax has not applied to shipments sent out of state. Minnesota requires we tax the shipping portion, but not the item when we do not have a foothold in the state to which the item is being shipped.   We have sent invoices and had purchases through our Weebly/Square site for years this way. Most recently an invoice was prepared to ship art from Minnesota to Florida. Sales tax popped up. I was able to remove at the item level, but after exploring around the site, was only able to find a "charge tax" or "don't charge tax" option. Has the ability to read the state function disappeared, or is it somewhere else now?  Thank you!

[Donnie-M · Accepted solution]

@PriceKrishnan What I have seen is this "However, you may be required to charge and remit sales tax to the state the item was
shipped. Contact that state directly for your sales tax obligations. "

It looks like Florida has a special rule, if you don't collect sales tax in your state, you have to collect it for Florida.  Basically, if you don't tax it, florida is.

"Effective July 1, 2021, Florida law requires businesses making remote sales into the state to collect and electronically remit sales and use tax, including any applicable discretionary sales surtax, on those transactions if the business has made taxable remote sales in excess of $100,000 over the previous calendar year." 

"If you buy a taxable item outside Florida and bring it into (or have it delivered into) Florida, and you did not pay sales tax on the item, you owe use tax."

So I am wondering if you are running into this in some way?  I am no tax expert, and I don't see this anywhere else just yet, but might be a place to start looking.

[PriceKrishnan]

I do think it is a bug in the Square system. If the same client purchases the exact same thing via the Square/Weebly website to be shipped from our brick and mortar store, tax is not charged (MN to FL, or any other state). It is only showing up incorrectly on Invoices. I contacted the Minnesota Department of Revenue, and their response is Square is not correct.

[MayaP]

Hey @PriceKrishnan, are you still having issues? I would love to help if so. 

[MayaP]

I appreciate your support here @Donnie-M! 😊

[MayaP]

Hey @PriceKrishnan, thanks for reaching out. I want to gather some more details I can assist. Are you stating Square is not charging sales tax on your site? To confirm you have set up your taxes online?