So, for the longest time we were passing the generic tax code of 03000000 with order so that StrikeIron could tell us if there should be tax collected on shipping. Then, last month we found an order where tax was being collected on shipping in a state where it should not be. After researching it, I found that the state does not charge tax on shipping unless some portion of that is handling. Since the generic description is Shipping and Handling, I assume that StrikeIron was calculating tax thinking that it included handling. Since we do not charge handling, we instead changed the tax category to 03100000 which specifies shipping only. This resolved the problem with that one state so we thought all would be good.
This week we had an order from Florida where shipping should be taxed and StrikeIron returns no tax using the tax category 03100000. However, if I test it using the 03000000 generic shipping and handling tax category, it does return the tax based on the shipping amount.
I am confused. What is the proper way to pass the tax category so that shipping will be calculated correctly based on state?
Hello Robert, I have responded to your query via support case 02297707 with our findings so far. The taxes in this situation seem to be due to the state shipping taxes applicable in the states mentioned. We are confirming the same further and will respond via the case.