Taxes are based on current and local tax laws. The Quivers system is responsible for calculating how much tax, and when tax should be applied. Quivers calculates tax based on the rules listed below.
In origin-based states, sales tax should be collected based on where you, the seller, are located.
Let’s say, for example, you live and/or sell out of Carlisle Pennsylvania. Since Pennsylvania is an origin-based state, you charge all customers located in PA the same sales tax rate (6 percent) no matter where they live. If you live and/or sell out of Philadelphia, you’re required to charge that same 6 percent PLUS a local tax of 2 percent to all of your customers in PA.
Most states follow the destination-based system. In destination-based states, the correct sales tax rate is based on where the buyer is located (the destination of the sale). The reason this can be more confusing than origin-based states is that states can have hundreds of tax jurisdictions, meaning you could potentially have to charge hundreds of different tax rates.
Here’s an example. Let’s say you live and/or sell in Columbia, South Carolina. You make a sale to a customer in Chesterfield, SC for an item that is not exempt from sales tax. According to the State of South Carolina Department of Revenue, you are required to charge that customer 8%. That 8% is the sum of the state rate of 6% PLUS a 2% local tax.