Jetpack Automated Taxes calculating wrong in Hawaii
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Aloha,
I have selected “enable automated taxes”.
It is calculating the taxes incorrectly for Hawaii. Here the GET (sales taxes) are calculated differently than the rest of the country. It is kine convoluted so let me give an example:
The GET is 4.5% of the total receipt, therefore we are allowed to charge a maximum sell through tax of 4.712%.
ie: $1000 item
tax @ 4.712% = $47.12
total including GET = $1047.12we remit 4.5% of $1047.12 = $47.12
(from the tax website “The maximum rate is greater than the tax rate because businesses are taxed on their gross receipts including GET that is charged to customers. This rate allows businesses to cover their entire GET expense.”)
I put a link to the HI tax document in the link to page field above.
yes, in essence they tax us on the tax! lol
How do I set a tax rule for HI so that this is calculated correctly? And still se auto taxes rest of the country?
The page I need help with: [log in to see the link]
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Aloha @krowchuk-dressage !
It is calculating the taxes incorrectly for Hawaii. Here the GET (sales taxes) are calculated differently than the rest of the country.
`The GET is 4.5% of the total receipt, therefore we are allowed to charge a maximum sell through tax of 4.712%.
ie: $1000 item
tax @ 4.712% = $47.12
total including GET = $1047.12we remit 4.5% of $1047.12 = $47.12`
Based on what you first said, that it is calculating incorrectly for Hawai’i, I am assuming that the tax rate it is calculating is the 4.5% and not the 4.712% you’d like to charge, is that correct?
If that is correct, most likely you’ll want to switch it to “do not automatically calculate” and set up your tax rates manually so that you can charge the correct rate for Hawai’i (and anywhere else in the US).
It’s important to note that when you set it to automatically calculate taxes, WooCommerce only automatically calculates taxes based on your shop location (so in your case, Hawai’i), so if you wanted to charge specific rates to the rest of the USA, you’d want to go through the process below not only to fix the inaccurate Hawai’i tax rate, but also to charge in other areas of the USA.
If you want to set tax rates for Hawai’i and the rest of the country more accurately, what you’ll want to do is go to WooCommerce–>Settings–>Taxes and click on the link that says “Standard Rate”.
There you will see a table where you can configure individual tax rates. You have a lot of options here: from creating a rate for Hawai’i and then a rate for the entire US or you can break it down state by state if you’d like as well.
Here is an example of some standard tax rates (from a test site, not real rates besides the one you provided for Hawai’i!):
They key to setting up the tax rates is that it is based on a hierarchical system, so you’d want to make sure that the Hawai’i tax rates are listed first. In my example above, I also place a tax rate for Pennsylvania and then one for the rest of the USA. That way, if someone from Hawai’i or Pennsylvania buys something from my store, they will be charged their state specific tax rates, if it’s someone from another part of the USA, they will get charged the 3% rate that I added to my standard rates.
You can read more about setting up standard tax rates here.
I hope that makes sense! Please let us know if you have any more questions or need further clarification ??
Best,
Sarah
Happiness Engineer–WooCommerce.com
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