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The Limitations of WooCommerce Sales Tax Reporting

  • Aug 15, 2015 | Laura McCamy

WooCommerce is one of the most popular platforms for building ecommerce sites. A WordPress ecommerce add-in, WooCommerce offers plug-and-play ease for those who want more flexibility to design their online store to their own specifications than is possible on some of the other popular ecommerce platforms.

Sales Taxes Features on WooCommerce

One of the first actions users will want to take in setting up their stores is to set sales tax rates. In line with the DIY ethos of WordPress, WooCommerce offers a detailed and highly customizable sales tax setup tab.

On WooCommerce, you have the option to layer state and local rates one on top of another and to set zero tax rates as well. If you include sales tax in your pricing, the platform will automatically deduct this tax amount from your price when you sell to a customer in a jurisdiction where you don’t owe tax and will alter the price when you are shipping to a customer with a lower tax rate.

The level of detail you can enter in WooCommerce’s tax tab may help eliminate some of the problems ecommerce sellers encounter in collecting online sales tax, such as rounding errors and charging tax rates based on zip code rather than physical address.

In addition, one of the many WordPress plugins available to WooCommerce users allows you to import sales tax rates to your online shopping cart. The platform will also keep you honest about sales tax collection: The sales tax interface will not allow you to charge all buyers one flat price, even if you choose to include taxes in your sale price.

Know Your Own Taxes

The sales tax features on WooCommerce allow ecommerce sellers to program sales tax rates with a level of detail designed to set accurate sales tax rates for your online sales. This doesn’t relieve ecommerce sellers of the obligation to understand their own sales tax obligations, however.

The downside of the very customizable WooCommerce sales tax interface is that it requires users to have a fairly sophisticated understanding of their sales tax requirements and how sales taxes work in general. While this is important knowledge for online retailers, not everyone has time to become a sales tax expert.

In addition, WooCommerce, like other ecommerce platforms, won’t help you determine the jurisdictions where you must collect and remit sales taxes, nor will it help you track your reporting deadlines. It is up to you to register with the taxing jurisdictions where you have nexus and file your tax returns on time.

Help For the Woo Seller

The good news is that you don’t have to be a tax whiz to get your sales taxes up and running smoothly in your WooCommerce store. With Avalara TrustFile you can upload the sales data you have downloaded from WooCommerce. TrustFile breaks down your tax obligations for you and helps you collect and remit the right sales taxes at the right time, so you can keep up with your sales taxes like a pro. Plus Avalara offers a free, interactive sales tax map and calculator, to help you keep your rates up to date.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Laura McCamy
Avalara Author Laura McCamy