To US sellers: How do you manage your zip code tax settings?

Hi, everyone!

This is directed to US sellers that maintain tax tables here on Brick Owl. Lawrence w/Brick Owl agreed that a forum post might be helpful.

In the last week or so, some of my customers have been experiencing problems processing payments, where the site "crashes" during the payment step. Lawrence also been super-quick to respond to the issues and getting them fixed. Lawrence was able to ID the problem as being caused by the number of tax tables my store has.

I'm based out of Kansas, which has almost 750 zip codes. I've done some condensing with sequential zip codes, but I still have about 450 separate ranges, and it will probably grow as tax rates in the cities and counties change. For example, I initially set zip codes 11001 - 11005 to 8%, but if the city/county in zip code 11003 changes their rate to 10%, I need three ranges: 11001 - 11002 at 8%, 11003 at 10%, and 11004 - 11005 at 8%.

Lawrence told me the ranges stack, so I can keep my original 11001 - 11005 at 8%, and create a separate table for 11003 at 2% (creating the 10% I need to collect), so I plan to do that to help reduce the number, but I'm not sure how much impact that would have. After all, using this example, I still have two ranges where before I only had one. I also have many non-sequential zip codes in Kansas, which doesn't help, either.

If payments are failing with 450 zip code ranges, how do the sellers in larger states handle this (i.e. Texas and California each have nearly 2,600 zip codes)? Is this something that you have to worry about, or is Kansas different...? ;) I wasn't sure, so I thought I'd ask. It's not really fair to Lawrence and the Brick Owl admins to fix this all the time, so I was hoping someone might have "been there, done that" and can give me some pointers to make things easier.

I've been fortunate that the customers have been understanding and patient, and still willing to place their order with me, but I have a feeling not all of them would be, and I'd like to avoid that! ;)

Thank you in advance!
HeartlandBrix

Comments

  • 5 Comments sorted by Votes Date Added
  • In California, we only have to collect ONE tax rate across the state, and then the additional city/county tax rate for buyers within the zip code we sell from. So that REALLY limits the range settings we have to put in, for us. Mine looks like the image attached (I'm in zip 91914), where you can see other zips in my city have a higher tax rate than other areas of the state.

    Does KS actually make you collect county-specific taxes vs. an overall state tax rate for counties you are NOT operating in?
  • BTW... I'm surprised to see KS has higher sales tax rates than CA? Though I have no doubt you beat our butts at property taxes. ;-)
  • Thanks, Calibrick! I was curious. Kansas has one state-wide tax like CA, but many city/county taxes on top of it.

    Kansas law for sellers that ship their products to their customers: "The rate of sales tax due on instate sales will be...the combined sales tax rate in effect at the location where the purchaser received the item(s). This will be the location where the seller delivers the item(s) to the purchaser, or if the seller ships the item(s), it will be the customer’s shipping address."
  • Ouch, Heartland, that is painful (tax rate based on recipient vs. seller). I am soooo sorry. CA deliberately does not do that due to the inordinate paperwork impact on small and medium-size businesses. Are there no constraints based on your business size, e.g., doesn't apply if smaller than X sales a year?
  • No minimums. I just turned in my 2020 sales taxes for three orders in Kansas, coming to $2.16 collected. I have to report, even if $0.00. The only thing that changes based on how much I collect is frequency of payment; larger stores have to pay semi-annually or quarterly. Since I'm so small, I can file annually.

    Like I said, I was curious if I was different vs. other states with more zip codes than Kansas, or if larger zip-code-count states had similar experiences. My goal this weekend is to go through my tables and use Lawrence's tip about stacking tax rates, hopefully cutting a few out.
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