Texas [U.S.A] state not including shipping charges in tax calculations but should include

[pikender]

Prerequisite

Setup spree_taxjar as instructed in README

Zone Setup

Create a Zone with:

• Name : Taxjar
• Type : country_based
• Countries : United States

Tax Category Setup

Create a tax category with:

• Name : Taxjar

Tax Rate Setup

Create a tax rate with:

• Name : Taxjar
• Zone : Taxjar
• Tax Category : Taxjar
• Rate : 0.0
• INCLUDED IN PRICE : false
• SHOW RATE IN LABEL : false
• Calculator : Taxjar Calculator

Shipping Category Setup

Create a shipping category with:

• Name : Taxjar

Shipping Method Setup

Create a shipping category with:

• Name : Taxjar
• Shipping Categories : Taxjar
• Zones : Taxjar
• Calculator : Flat Percent / 10.0
• Tax Category : Taxjar

Product Setup

Create or Update an existing product with:

• Shipping Category : Taxjar
• Tax Category : Taxjar

Follow the Checkout with Product having Tax Category as TaxJar

• Add the product to cart having Tax Category as TaxJar
• Add the address with (Checkout -> Address):
  • Country : United States of America
  • State : Texas
  • City : Adrian
  • Zip : 79001
• You would move to Checkout -> Delivery
  • Tax shown with Product Amount (20) is 1.65 but should be 1.82
  • Refer below API Request for reference
  • As shipping_method is selected at this step, shipment_total is still 0 so 1.65 is kinda right value
  • Select Taxjar shipping method and move to Checkout -> Payment
• On Checkout -> Payment, the tax value is still 1.65 though should be updated to 1.82 as shipping cost is known now

Expected

On Checkout -> Payment Step, Tax calculated should take shipping in account when needed but missing now (Texas is a state which levy tax on shipping)

Analysis

It's found that we are creating tax adjustments for line_items by introspecting taxjar_response.breakdown.line_items which is rightly calculating tax on line_item cost and storing in line_item.additional_tax but missing tax applied on shipping which can be further verified based on freight_taxable is true/false.

Probable Solution

We can create an order adjustment for the shipping tax difference and add and show in Order additional_tax_total.

Though, I will leave the best implementation to the owners as Spree ecosystem should behave well for all cases with the fix 😊

Sample Api Response

Note: Shipping Cost as 0 and 0.2 in below requests

2.3.1 :002 > client = ::Taxjar::Client.new(api_key: Spree::Config[:taxjar_api_key]) 
 => #<Taxjar::Client:0x007faefa1906d0 @api_key="<Removed from here>"> 
2.3.1 :003 > client.tax_for_order({:to_country=>"US", :to_zip=>"79001", :to_state=>"TX", :to_city=>"Adrian", :amount=> 22.0, :shipping=> 2.0, :line_items=>[{:id=>12, :quantity=>1, :unit_price=>20}]})
 => #<Taxjar::Tax order_total_amount: 22.0, shipping: 2.0, taxable_amount: 22.0, amount_to_collect: 1.82, rate: 0.0825, has_nexus: true, freight_taxable: true, tax_source: "origin"> 
2.3.1 :004 > client.tax_for_order({:to_country=>"US", :to_zip=>"79001", :to_state=>"TX", :to_city=>"Adrian", :amount=> 22.0, :shipping=> 0.0, :line_items=>[{:id=>12, :quantity=>1, :unit_price=>20}]})
 => #<Taxjar::Tax order_total_amount: 20.0, shipping: 0.0, taxable_amount: 20.0, amount_to_collect: 1.65, rate: 0.0825, has_nexus: true, freight_taxable: true, tax_source: "origin"> 
2.3.1 :005 > 

[pikender]

Taxjar Api allows shipping to be passed for order and not shipments.

Also, I see no provision to add shipping as line_items like Avalara does.

As per my understanding, shipping tax should be stored as shipment adjustments with shipments storing additional_tax_total as value.

The deadlock happens between Taxjar Api and how Spree supports shipping taxes, as we get a consolidated shipping tax value, if applicable, from taxjar api so no easy/direct way to assign to shipments.

It looks from outside that creating a tax adjustment for shipping at order level might solve the issue and better managed as per Spree ecosystem.

Please guide me on better implementation in this regard.

[nishant-cyro]

@pikender - We need to add a new adjustment here - https://github.com/spree/spree/blob/master/core/app/models/spree/order.rb#L311 for Order.

Then, We need to modify https://github.com/vinsol-spree-contrib/spree_taxjar/blob/master/app/models/spree/calculator/taxjar_calculator.rb#L18 accordingly.

[pikender]

It's solved by making a Standard Tier Taxjar API request per shipment when compute_shipment hook for Taxjar Calculator is called.

So for a Order with N Shipments, N + 1 API calls are made to calculate correct sales tax.

N Standard Tier Taxjar Api Calls for calculating shipment tax and 1 Advanced Tier Taxjar Api Call for calculating line_items tax