5 Things Every PrestaShop User Should Know About Sales Tax
- May 31, 2016 | Laura McCamy
Setting yourself up with a terrific ecommerce shop has never been easier. In fact, your hardest task may be to choose which of the many available platforms you should use to build your online store.
PrestaShop has several great features: it’s free, it interfaces easily with many different payment platforms (including its own PrestaShop payment service), it has thorough documentation that will take you step-by-step through the process of setting up your shop, and, of course, it’s free. Plus you can choose from a host of add-ons in a range of prices, starting with everyone’s favorite price, free.
PrestaShop also helps you manage your sales tax liabilities, both through integration with Avalara AvaTax and internal features. Here are five things every PrestaShop user should know about sales tax.
1. Set Up PrestaShop Sales Tax Rules
Unless you ship orders only to one state and you have sales tax nexus in that state, you will want to take advantage of PrestaShop’s sales tax rules settings. Sales tax rules allow you to specify the amount of sales tax for each jurisdictions where you have sales tax nexus and when each tax is applied.
Before you start selling, go to "Localization" and set the country, state, and even zip code range for each tax rule. If the tax you are adding is not already registered in PrestaShop, you can go to the "Taxes" page, create it, then go back and finish setting up your rule. This may not be the sexiest step in setting up your PrestaShop web store, but it’s one that will save you from sales tax chaos down the road.
If these tasks seem confusing, don’t worry. PrestaShop’s clear and detailed documentation will guide you from step to step, through every option.
2. Sales Tax on Shipping in PrestaShop
If you have nexus in states that require you to charge sales tax on shipping, you can easily add those tax charges. Simply create separate sales tax rules for shipping charges for those states.
3. Label Your Sales Tax Rules Clearly
It’s a good idea to give your PrestaShop sales tax rules very specific names. For example, you might call one tax rule "Manhattan sales tax 8.875%" and another "Albany sales tax 8%." That way, if you get a bulletin from the New York Department of Revenue alerting you to a local tax increase in Albany, you can tell right away that the rule you have for Albany won’t calculate the right sales tax rate. You can disable the "Albany sales tax 8%" rule and create a new rule with the updated rate for Albany. If the new sales tax rate is temporary, you can disable it when it ends and reactivate the 8 percent rule.
4. A Handy PrestaShop Sales Tax Default
PrestaShop will add sales tax, according to your rules, based on either the customer’s billing or delivery address. Since the delivery address is the basis for the tax rate, especially in destination-based states like New York, it’s handy that PrestaShop defaults to charge sales tax based on the delivery address. In almost every case, you will want to stick with this option.
5. Integrate PrestaShop with TrustFile
The biggest downside of sales tax compliance for online sellers is the time it can take to file correctly in multiple states. The good news is that PrestaShop integrates with sales tax compliance software like Avalara TrustFile. You can upload your transaction data into TrustFile for a free sales tax report that outlines exactly what you need to pay and to whom.
For online retailers, sales taxes can be a bit of a tangle. Fortunately, PrestaShop and TrustFile give you a great set of tools to clarify and simplify your online sales tax compliance.