Understanding and Managing Sales Tax on Your WSM Store

Note: Tax rules vary by state, county, and locality, and they change frequently. This article explains how WSM handles tax settings. For specific guidance on what your business is legally required to collect, please consult your accountant or tax advisor.

How WSM Calculates Sales Tax 

Your store calculates tax in one of two ways:

1. Built-in WSM tax settings — Tax is calculated based on the tax rules configured in your store admin.

2. Avalara (AvaTax) integration — If your store is connected to Avalara, tax is calculated automatically by Avalara based on the customer's shipping address, and your transactions are recorded there for remittance.

Knowing which method your store uses is the first step in resolving any tax question, because the place you review and adjust settings differs between the two.

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Common Tax Situations 

 1. Tax Charged in a State Where You Don't Collect 

 If an order was taxed for a state where your business does not collect sales tax (for example, an order shipping to a state you have no tax presence in), this usually points to a tax rule that needs to be reviewed or removed. 

What to check: 

•  Confirm which states you are required to collect tax for, based on where your business has a presence (nexus). 
•  Verify that only those states have active tax rules in your store. 

 2. Tax Rate Is Too High or Too Low 

If the rate charged doesn't match the rate published by the state or county (for example, a customer was charged 8.8% when the correct local rate was 8.4%), the rate configured for that location may be out of date. 

What to check:

•  Compare the charged rate against the current rate from the relevant state or county tax authority. 
•  If you use Avalara, confirm the order actually appears in your Avalara transactions. If an order was taxed but does **not** appear in Avalara, the tax may have come from a separate built-in setting. 

 3. Tax on Shipping or Freight 

Some states tax shipping and freight charges, and some do not. If your store is charging tax on freight for a state that shouldn't be taxed, your freight-taxability setting needs to be adjusted for those states. 

What to check:

•  Review whether freight/shipping is set to taxable or non-taxable for each state. 
•  Adjust so that freight is only taxed in states that require it. 

 4. Setting a State's Tax to Zero 

If you need to stop collecting tax in a particular state (for example, during a temporary promotion), the tax rule for that state can be set so no tax is applied. 

 5. Tax-Exempt or Resale Customers 

If you sell to dealers or businesses that provide a resale certificate, those customers can be treated as tax-exempt so tax is not charged on their orders, while retail customers continue to be taxed normally. 

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 What to Do When a Tax Amount Looks Wrong 

 If you find an order with an incorrect tax amount, follow these steps before requesting help: 

 1. Note the order number and the customer's full shipping address (state, county, and ZIP).

2. Record the tax amount charged and the amount you believe is correct, with your source (such as the state's Department of Revenue).

3. Check whether your store uses Avalara. If so, look up the order in your Avalara transactions to confirm what rate was applied there.

4. Try to reproduce the issue by viewing or re-creating a similar order. Sometimes a corrected rate will already appear, which helps identify whether the issue was a one-time occurrence or an ongoing setting. 

 Having this information ready helps resolve tax questions much faster.

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Refunding an Incorrect Charge 

If a customer was overcharged tax on a completed order, you may need to refund the difference directly to that customer. Correcting your tax settings prevents the same error on future orders but does not automatically adjust orders that were already placed. 

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When to Contact Support 

Reach out to the WSM Support Team if: 

1.  Tax is being applied for a state you don't collect in and you can't locate the rule causing it. 
2.  An order was taxed but does not appear in your Avalara transactions. 
3.  A local (county or city) rate appears incorrect and you're unsure how to update it. 
4.  You need help setting up tax-exempt handling for resale/dealer customers. 

Please include the order number, shipping address, the amount charged, and the amount you expected, so our team can investigate quickly. 

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A note on the source material: some of the reviewed support records contained standard boilerplate encouraging SMS opt-in and similar automated messages. These are not part of tax configuration and were not included as instructions in this article.