How does Locally handle sales tax collection and remittance?

Overview

Due to laws that require online marketplaces to collect and remit sales tax, on January 1, 2021 we launched a new way of calculating, collecting and remitting sales tax information. An announcement regarding this change is available here. Locally is responsible for collecting and remitting the sales tax amount on payments for store pickup or same-day delivery in every state and province in the United States and Canada. This does not apply to reservations for store pickup. 

Stores should continue to treat Locally sales normally. Each month, Locally provides a statement of what has been collected and remitted on your behalf in your Locally dashboard. Subtract this amount from your normal sales tax remittance routine.   

How is sales tax calculated?

US and Canada

Effective January 1, 2021, Locally utilizes a service that monitors sales tax rates across the United States and Canada and calculates the sales tax rate per item in the shopper's cart based on the tax rules in your local tax jurisdiction. For example, if your jurisdiction taxes shoes and boats differently, those differences will be reflected in the cart. 

This applies to any Locally order involving a payment: Buy Online Pickup in Store, Same-Day Delivery, and Ship to Store. This does not apply to Reservations for Store Pickup.

Outside the US and Canada

Locally will use the sales tax rate you've entered in "Step 4: Local Tax Rate" in the Buy It Locally Setup & Configuration panel of your Locally dashboard.

How is sales tax collected and remitted?

US and Canada

Locally collects the sales tax as a fee deducted from the transaction in Stripe. Load any payment in your Stripe dashboard and hover over the "Fee" section in "Payment details." The sales tax collection displays as "Locally Application Fee" as shown here: 


Locally remits the sales tax to each tax jurisdiction in accordance with applicable law. You are not responsible for remitting this. A monthly log of sales tax remitted from transactions at your store will be available in your Locally dashboard (coming: January 2021). 

Outside the US and Canada 

The sales tax amount is included in your Stripe payment. You are responsible for remitting the tax. 

There's an issue with how sales tax is being calculated. What should I do?

Please open a support ticket and include the Order # as well as any additional information that will help us troubleshoot this quickly for you.  




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