Forums/Feedback/General Feedback

Tax Blues

Shawn Johnson
posted this on May 05, 2011 21:40

I sell designs on Etsy.  There is a set price with an added shipping cost unique to the US.  Today I filled an order from Etsy.  It seemed that the cost for the item was higher here at Ponoko than I remembered, and I noticed that tax was added.  So I checked some other orders and noticed that the two previous orders (one from PA and the other from NJ) were not charged tax.

So I wonder, if some states require you to tax folks and others do not, how am I supposed to keep an Etsy shop with Ponoko products and make a consistant profit?  My margin is very low.  So the $3.ish  in tax I was charged for this recent order is more than a third of my profit for that item gone.  And what happens when the tax for some states or countries is high enough that I wind up paying instead of profiting?

I suppose one option would be to contact every Etsy order that incurs tax and ask them to pay more - but that's really a pain, not to mention aggravation to the customer.

Is there a solution?

-Whystler

 

 

Comments

User photo
Josh Judkins
Ponoko

Hi Whystler!

Thanks for checking on this. The way Sales Tax works with Ponoko in the USA is that any purchases which are being shipped to an address within California, we must pay and charge Sales Tax on.

It looks like Etsy has a function which will allow you to add Sales Tax to any orders placed by CA residents:
http://www.etsy.com/help/article/331

Does that help?

May 06, 2011 10:28
User photo
Shawn Johnson

Yes, this helps very much!  I now understand that since you are in California, residents within California have to pay tax.

I do have a question regarding the tax rate you charge.  What is it?

By my calculation the tax rate you charge seems to be in the 16% range if I don't include shipping in the taxable amount.  If I do include shipping, you tax rate charge appears to be in the 11% range.  I am basing this information by looking at my recent order that went to California which was taxed $3.35 on a $19,92 order that also incurred $9.93 in shipping.

I did some research using this site (http://www.boe.ca.gov/cgi-bin/rates.cgi) to see what the tax rates were in california, and they were different from municipality to municipality so I did scroll through every one.  I'm nothing if not thorough lol.  Not one of these was as high as 11%.  Is something amiss here?

I just need to know so I can set up my etsy schtuff as you suggested.

-Whystler

May 06, 2011 12:51
User photo
Josh Judkins
Ponoko

Hi Whystler,

Thanks for following up on this. I'll check on this with the Ponoko team and get that info through you to you as soon as possible - likely early next week at this point.

Cheers!

May 06, 2011 14:42