Top FAQs About Sales Tax Automation Asked by Shopify Merchants

A lot of Shopify merchants have many questions about sales tax automation, including those who have already invested in this type of tax compliance solution. They wonder whether sales tax automation is a good investment and what else it can offer after deciding to get a provider.

 

Here are the top faqs about sales tax automation raised by Shopify merchants who have already switched to this type of tax solution, and some queries are related to Kintsugi, which is among their top choice providers.

 

How do I ensure my sales tax automation tool is set up correctly?

When switching to sales tax automation, Shopify merchants' number one concern is if the setup is done correctly. They worry about proper integration and whether it will calculate taxes accurately. Kintsugi's easy onboarding and seamless no-code integration are among the reasons many Shopify merchants love it. Once the setup is done, you can go about your business confidently because it works accurately.

Here's an overview when the setup is done correctly.

 

How do I know if the automation tool is tracking all my economic nexus obligations?

You will get an alert when you establish an economic nexus in new jurisdiction, state or region.

 

How does Kintsugi calculate the correct tax rates for my Shopify customers?

Kintsugi uses real-time data, including the customer's location and your nexus obligations, to automatically calculate the correct tax rates for every transaction. In this way, your compliance is assured.

 

How can I connect Kintsugi with my Shopify account to automate sales tax?

You can integrate sales tax automation into your Shopify account to streamline compliance.

 

Is Kintsugi easy to integrate with Shopify, or do I need a developer?

Kintsugi's no-code integrations allow you to seamlessly import data from your existing ERP, HR, and e-commerce. There’s no need for a developer to integrate Kintsugi with Shopify.

 

Will the tool help me file sales tax returns, or is it just for collection?

Yes. Kintsugi can collect and file sales tax returns on your behalf. Automatic filing returns has saved many Shopify merchants from potential penalties for late filings.

 

Does the automation tool account for discounts, shipping charges, and refunds?

Sales tax automation tools consider several factors to calculate sales tax accurately, including the type of product or service, the location of the sale, and any applicable discounts. When discounts are involved, they follow specific rules to determine how the discount affects the taxable amount and ensure compliance.

 

Can I trust the sales tax automation tool to file taxes accurately and on time?

Yes. Sales tax automation tools like Kintsugi use artificial intelligence to automate processes and reduce errors caused by manual processing. In this way, we avoid human errors during calculations and file on time to avoid penalties for late filings. Also, you will be notified when it's time to file.

 

How do I manage tax-exempt transactions with the automation tool?

Automation tools are programmed to process tax-exempt certificates, using their automated exemption certificate management like Kintsugi's.

 

How do I handle sales tax audits with the automation tool?

Using automation tools like Kintsugi gives you an advantage because they generate comprehensive reports and centralize and organize all your tax data and documents, such as exemption certificates, which are crucial during audits.

 

What happens if there's a discrepancy in tax calculations or filings?

We understand that Shopify merchants want to know how to resolve errors or inconsistencies, whether they will receive alerts for such issues, and what support is available from the provider. With Kintsugi, you don't have to worry because if it's our fault, we have error insurance to correct any mistake with coverage up to the total amount you've paid for that service. We do not want you to pay for our missteps.

 

How do I reconcile sales tax data with my accounting software?

Sales tax automation tools are programmed to work with your existing ERP, HR, and e-commerce systems through integration. So, if you use QuickBooks or NetSuite, you can plug it into most sales tax automation tools like Kintsugi, which supports several billing platforms such as follows:

 

Can I manage multiple Shopify stores within one Kintsugi account?

Yes, you can. Kintsugi enables customers to manage multiple Shopify stores as well as any other e-commerce in a unified platform.

 

Does the tool integrate with other e-Commerce marketplace like Amazon, eBay, or Etsy if I expand beyond Shopify?

Yes. Kintsugi supports multiple e-commerce companies besides Shopify, including Amazon, eBay, Etsy and BigCommerce.

How secure is my tax and customer data when using Kintsugi?

Kintsugi takes your security and privacy seriously. Kintsugi is SOC 2 Type II compliant and adheres to the General Data Protection Regulation (GDPR). Our platform is equipped with military-grade encryption and secure data transactions to protect you from cyber threats and breaches.

 

What happens to my data if I stop using Kintsugi?

Kintsugi is SOC 2 Type 2 compliant and guarantees your security and privacy. All sensitive data from any customer who decides to stop using Kintsugi are destroyed.

 

How do I monitor the performance of my sales tax automation?

After the transition, Shopify merchants usually ask about dashboards, reports, and analytics that provide visibility into tax collection, filings, and overall compliance performance. Here are the best practices to monitor if your sales tax automation system works -- do periodic reviews against the current tax rates in various jurisdictions where you have nexus, configure the system to flag transactions that exceed certain thresholds, keep an eye on exceptions that are unusually high or low, review update logs or release notes from the provider, consider hiring external auditors and keep track of complaints or disputes if there are any. Sales tax automation tools work and deliver, but you can take extra measures for your peace of mind if you want to.

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