Choosing Destination or Modified Origin for California Reports
You can decide whether you want to view your TaxJar Reports for California with tax collection estimates using either Modified Origin or Destination sourcing by editing the sourcing rules for the state in your State Settings.
The minimum requirement in CA is Modified-Origin.
- If you, as the Seller, choose this option, this will end up leaving some responsibility on the customer to remit a use tax in addition to the minimum sales tax you charge.
- Modified Origin sourcing means you won't be paying the state the full sales tax rate for each item you sold.
- If you're selling via Shopify, you need to choose Modified-Origin sourcing in your Reports because this aligns with the way Shopify collects sales taxes in California for sellers.
If you select Destination sourcing for CA in your State Settings, the Expected Sales Tax Due Report will show the full rate you should have collected in all zip codes when you file so your customer isn’t on the hook to submit use tax to the state.
- If you're selling via FBA, we recommend choosing Destination sourcing in your Reports because this aligns with the way Amazon collects sales taxes in Calfornia for FBA sellers.