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Why Sales Tax Calculation Is Crucial For Your Ecommerce Shopping Cart

  • Oct 15, 2018 | Wayne Myer

Ecommerce rollouts can be complicated, with many moving parts. With all the demands businesses place on eCommerce systems, it can be easy to treat sales tax calculation as an afterthought. That’s a mistake. Sales tax calculation is a key component of any eCommerce site. Paying attention to putting the right sales tax solution in place upfront will save developers and their organizations a lot of headaches later.

The fact is, sales tax is complex and it’s not getting any simpler anytime soon. For any given tax jurisdiction, there are a dizzying array of sales-tax rules and rates — and they change all the time. For instance, in Kansas, sales tax is not charged on a hot-air balloon — until it is tethered, when it becomes an “amusement” and sales tax must be added to customer charges.

The recent Supreme Court decision in the South Dakota v. Wayfair, Inc. case makes sales tax rules even more subject to change by opening the door to states being able to require more out-of-state sellers to collect and remit sales tax.

It takes dedicated experts to really know the ins and out of sales tax rates and regulations. For everyone else, without some help, it’s all too easy to make mistakes in sales tax calculations, potentially increasing exposure and risk for your company.

Not only that, but manual solutions such as using free, downloadable tax-rate tables increase the amount of time and staff resources that are taken up by sales tax compliance. This starts with the development stage as code must be built from the ground up and continues down the line in ongoing operations.

A much better shopping cart sales tax solution lies in a sales tax API such as AvaTax. AvaTax can reconcile nearly 3,000 different product categories across more than 10,000 separate tax jurisdictions — quietly and behind the scenes. AvaTax is easy to implement into your organization’s existing systems and is compatible with most ERP, CRM and billing systems. There are more than 600 existing connectors that use the API, but with Avalara’s REST API, you can also create custom integrations. Not only that, but AvaTax comes with robust developer tools and support.

Want to know more about how to automate sales tax for your eCommerce shopping cart quickly and easily? Download our eBook.

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.
Wayne Myer
Avalara Author
Wayne Myer
Wayne Myer
Avalara Author Wayne Myer
Wayne Myer is a Software Engineer on the Developer Relations Team, an engineer-to-engineer resource for the AvaTax API. When not working on code and documentation, Wayne can be found living on a sailboat, sailing said boat, scuba diving, and long-distance bicycling.