Automated Sales Tax Collection for ShootProof Pay

To adhere to state-based regulations for marketplace facilitators, over the next few months ShootProof is rolling out automated sales tax collection and remittance for studios using ShootProof Pay.

Currently, the states listed in the chart below are where ShootProof automatically collects and remits sales tax.

This means if you receive orders from clients with a shipping address in those states, ShootProof will automatically calculate, collect, and remit sales tax on your behalf. 

This article will be updated as automated sales tax collection is expanded to more states. 

For studios not using ShootProof Pay as their payment processor, the tax percentage designated on the price sheet is still calculated and collected on orders, but is not remitted. Those studios are still responsible for remitting the collected taxes. 

What is a marketplace facilitator?

A marketplace facilitator is a platform that helps online sellers offer goods and services to their clients. Marketplace facilitators enable these sales by allowing sellers to list their available products and services, process payments, and automate client communications. Marketplace facilitator laws refer to legislation about the sales tax responsibilities of these facilitators.

As a marketplace facilitator, ShootProof is legally required to calculate, collect, and remit sales tax directly to the state authority on behalf of the seller for studios using ShootProof Pay.

What is automated sales tax collection?

For studios using ShootProof Pay as their payment processor, sales tax will now be calculated, collected, and remitted on their behalf.

When a marketplace facilitator collects sales tax on behalf of a third-party seller, the tax is reported and remitted under the marketplace facilitator's (in this case, ShootProof's) name, not the individual seller's. ShootProof reports the sales tax we have collected from all of our sellers in a consolidated tax return to each respective tax authority. Based on applicable U.S. State-enacted marketplace facilitator tax laws, ShootProof will automatically calculate, collect, and remit sales tax on behalf of studios.

Sales tax collection is determined by the shipping location entered by the client at checkout, and whether the items in the order are subject to sales tax in their area (digital and/or physical products). If the shipping address is changed to a different state during order approval, the sales tax will update to that state's sales tax amount. If the new sales tax amount is lower than what the client paid, the difference will be automatically refunded to the client; if the amount is higher, then it will be deducted from the funds collected from the client. 

Can photographers opt out of automated sales tax collection?

No, photographers can't opt out of ShootProof automatically collecting sales tax. If your client is in a state where automated sales tax is implemented, then the sales tax will be collected and remitted on your behalf. 

Where can I find if sales tax for an order was remitted by ShootProof or needs to be remitted by the photographer?

Go to Reports > Orders Report and view that information under the Sales Tax Remittance column. 

What US States does ShootProof Pay collect and remit sales tax for?

While this will eventually be implemented for all states, right now, automated sales tax collection is only happening for orders placed in the states listed in this chart:

Is sales tax also being remitted on invoice payments?

No, sales tax is not being remitted for invoice payments in any state. You are responsible for remitting sales tax collected on invoices in ShootProof. 

How is automated sales tax collected on packages?

Sales tax for packages is determined by the contents of the package. Packages containing at least one physical product are taxed at the rate for physical products, regardless of what else is in the package. Packages that don't contain any physical products but have at least one digital product are taxed at the rate for digital products.