Calculating Sales Tax in The Nexternal eCommerce Platform

The Nexternal eCommerce Platform offers many ways to calculate online sales tax:

  • Avalara - Merchants that opt to use Avalara for sales tax processing can calculate sales tax rates accurately at the address level. Avalara does charge extra to use its service and additional information about the Nexternal/Avalara integration can be found here.
  • ShipCompliant - Wineries that use ShipCompliant are able to pull in accurate address level rates via the Nexternal/ShipCompliant integration.
  • Zip Code Level Rates - For merchants that do not not subscribe to Avalara, tabulated rates are available to use. These rates are accurate to the postal code level, but their are some postal codes that contain multiple tax rates so these rates are not always 100% accurate.
  • State Level Rates - Merchants also have the option to charge a flat rate sales tax for an entire state. This rate can be entered by the merchant. It can also be overridden by defining zip code overrides.

Regardless of the method of calculation, Nexternal's shopping cart software will only calculate sales tax on orders that are shipped to states that the merchant defines. Typically, these are states in which the merchant has a physical presence.

Nexternal's eCommerce software also allows merchants to define sales tax rates at the country level which can be helpful for countries that levy duties. Canadian merchants are able to calculate sales tax at the Province level.

Nexternal also provides the ability to define taxability at the product and customer type level. Some food products may never be taxed while some may be taxed just in certain states. Additionally the merchant can also decide whether or not certain customer types are taxed. It is common for companies to not charge tax in business to business transactions. To make matters more complicated, some states require that shipping is also taxed. Fortunately Nexternal allows merchants to define this parameter at the state level.

Many merchants find that reporting taxes can be time consuming. To stream-line this process, Nexternal includes a comprehensive sales tax report to break down sales tax charged by jurisdiction. The to make sales tax reporting the least cumbersome, we recommend checking out Avalara.

Sales tax laws are complicated and not every merchant interprets them the same way. Nexternal's sales tax feature is flexible and easy to use, allowing merchants to charge sales tax in the way that works best for their business.

If you are interested in learning more about how your company can utilize Nexternal's eCommerce software, please call 800-914-6161.