Hi. Great information. One question for clarity. When remitting sales tax to a state, does that mean only after the state's nexus threshold requirements have been met? Or for all sales even if the Nexus requirements have not been met? Thanks!
Has the law changed for collecting sales tax online? My shop is in MO but we ship from IL and all over the USA - please any help would be appreciated. Shopify collects sales tax from customer by what state they live in but they don't REMIT! Trying to ensure we are following law.
Hi Veronica, I like your videos :) They are really helpful. I'm planning to do QBO bookkeeping for US clients who sell on Shopify, but I'm not sure if as a bookkeeper I'm supposed to deal with Sales Taxes or if it is the task of the accountant? I'm asking because I know that for other types of businesses (non-ecommerce) US business owners hire the bookkeeper to record transactions and at the end of the period they give these records to the accountant (CPA) to deal with taxes, adjusting entries and other things necessary to close the books. Or, because most likely Sales taxes will be due monthly or at least quarterly, it could still be the bookkeeper's task to deal with them, so can the A2X app calculate the right amount of tax due and I can link it to Sales Tax Payable account in QBO? (I've seen in this video that you showed a section of the app relating to Sales Tax, but you said it is a more advanced topic, so you wouldn't be expanding on it here).
US sales taxes are complex and bookkeepers are not required to prepare the sales tax returns for e-commerce clients. We don't do that for our clients. Instead, we refer them to a sales tax expert such as salestaxandmore.com
Thank you for your informative video . I have a unique sutuation tho , i live outside the USA , i am NOT a citizen of the United States either but i am interested in starting my ECommerce store on Shopify . My question is , do i need to have a ssn o tax number to start my Shopify store ? And can i start Shopify as a citizen of another country ?
Hello I'm new to shopify and I'm selling physical products out of Oregon to all US states. Do I tick the box for 'Charge tax on this product'? on product page?
If you don't have economic nexus in other states, then you should be collecting and remitting sales taxes where you have a physical presence (Florida).
I only have a tax ID in one state. How do I charge taxes on my shopify e-commerce site when customers order from a different state other than the one I'm registered in? Thank you!
Hi Katherine. You may want to review the video again where I explain things in more detail. But, as I mentioned, each state has different rules and you must first meet the threshold in each state. Once you hit the threshold in a state, you need to register to collect sales taxes. And after you register, then and only then, you would set up to collect sales taxes in Shopify.
Each state has a different economic nexus criteria. Am I really supposed to memorize all of them in 50 states and know when to start collecting tax there? That's impossible.. Is there a way to do that automatically?
okay so what if I sell the products online, but the fulfillment center is in New York and I am in Indiana? Do I charge sales tax for both states or just my State that I actually live in?
We use Avalara for Sales Tax but frequently the Sales Receipts that get imported into QBO from Shopify get "changed" by the Avalara App and the sales tax is no longer correct. We have to perform a lot of manual adjustments. The owner is frustrated and wants to get rid of Avalara but we file sales tax in multiple states. What could be causing all of the sales tax errors in QBO from the Shopify imports?
Thanks for this video! I am new to shopify - switching over from Big Cartel. All customers from Big Cartel were automatically charged sales tax when applicable in their state. I am the sole employee of my small business in Virginia. How do I ensure that customers from EVERY state will pay sales taxes (when applicable)? Thanks!
Please someone help!! I plan on opening my Shopify store within the next few months. So I want to make sure I understand this correctly. I live in North Carolina which is a Destination State. So does that mean I would only pay sales tax on purchases made by customers within North Carolina, and not other state customers. I only would start paying other state sale tax when I make nexus by 200 transactions or $100,00 in sales in that state, then I would have to pay sales tax. Is that correct? Please if anyone knows I’d really appreciate it!
Hi Tiffany. Since I'm not your accountant, I can't advice you on sales tax matters. However, keep in mind that a "destination state" is applicable only in instances when you have physical presence in a state. You would need to look at economic nexus for other states. This is very complicated. I recommend that you reach out to Sales Tax And More. They specialize in e-commerce sales taxes.
Thank you so much for the video, I've been searching for valuable information like this. I want to start my ecommerce business and I still have two big doubts. Regarding nexus and sales tax, after meeting the threshold and registering for sales tax, will I be responsible to cover sales tax for the amount up to threshold (especially if I meet it within a year)? And the second question is more about how to register for sales tax ID. Some states require both an EIN and an SSN. Is it possible to apply with an ITIN replacing the SSN as a foreign businessman? Thank you again for the quality information you provided and I hope you're able to read and answer to these questions!
Hi. I highly recommend that you contact Sales Tax and More. They specialize in sales taxes and can do a consultation with you to answer your specific questions.
I understand sales tax and nexus, what I don't know is how Shopify handles it. So you collect sales tax where you have nexus. But in my state, the tax has to be broken up by tax jurisdiction where the goods are exchanged. So in my state I would have to break the amount out by State portion, county portion and city portion. Can Shopify do that? If not, then I would have to export all sale by customer and their address, zip code into Excel and do a pivot table by zipcode and figure out the tax that way. Please advise if there is a better way. Thanks.
@@5MinuteBookkeeping So I ask again, are you using Shopify to track your sales tax? If so, then your accounting is split between 2 systems...Shopify and QB. As you know sales tax is calculated based on the rate where the goods are exchanged and in an eCommerce business that is the customers location - much different than a brick and mortar store where the tax rate is punched into the cash register at the store. So eCommerce businesses need to know the tax rate where the goods are exchanged and if you do not bring the zip code into QB then you are relying on Shopify to get your numbers and your accounting is split between 2 systems. Do you think that is an issue? How do you handle it? Thanks.
@@gijeet5374 Using my process (which is also used by other e-commerce accountants), you would not use QBO to calculate sales taxes since you are not bringing in individual transactions in QBO. Assuming that you have economic nexus in a state and also assuming that you have registered with that state, you would set up the sales tax rates in Shopify and collect sales taxes using Shopify. It is then up to you to use either a sales tax app like Taxjar or a service such as Sales Tax and More (salestaxandmore.com) to remit sales taxes. I prefer to use Sales Tax and More.
SO I'm selling online but selling to all states in the US, I charge all states the same sales tax rate as where I sell from which is IL, does that mean I cannot be doing that and have to charge taxes to every state at a different rate ? and what do you mean by meeting the threshold.
Every state in the US has different rules and different sales taxes. Each state has rules for physical nexus (when you have a physical presence in the state) or economic nexus (when you make sales to other states where you don't have physical presence). To determine whether you have economic nexus in other states, you have to look at each state's threshold (minimum number of transactions or minimum dollar amount of sales). If you meet the threshold in those states, then you have economic nexus. You may want to contact salestaxandmore.com for a sales tax consultation so that they can give you professional advice regarding how you are collecting and managing your sales taxes. They specialize in sales taxes.
Hi Alexis. You don't register in all 50 states. You only register in states where you have physical or economic "nexus" and only after you have met the thresholds for each state. Every state has different rules.
Can you still sell to a different state and collect taxes before getting the sellers permit and/or have meet the threshold? I heard you say you can apply after you noticed you meet the threshold for a particular state..correct me if I'm wrong. Please advise. Thank You
For economic nexus purposes, you first need to meet the threshold in a state before you collect sales taxes. Each state has different thresholds which vary based on volume of sales or transactions.
Hi! Thank you for this! I just started launching my business with Shopify and realized I’m not collecting taxes. I didn’t have any sales yet. I live in Florida, but I had my LLC formed in Wyoming three months ago because I heard it has good benefits. I have no physical store here in Florida. I just want to ship packages from home for now. Am I supposed to be collecting taxes in all states? If I collect tax in Florida, Will I need to file reports for Wyoming and Florida? Thank you so much!
Hi Shy, I highly recommend that you reach out to salestaxandmore.com for a consultation. Normally, you collect sales taxes where you have a physical presence. But Sales Tax and More can give you specific advice for your situation.
I can't give you specific tax advice, but if your state collects sales taxes, you should generally sign up to collect sales taxes. But you should always contact your state's department of revenue to check first.
hi we are a now Uk based online store .. we aren't vat registered as we are under VAT threshold in Uk .. do we have to charge any vat in Uk , EU or rest of world when we get orders? is sales tax and VAT same ? thanks a lot
Hi, I'm not familiar with UK VAT rules worldwide. You should check with an accountant in the UK who hopefully provide you with the information you are looking for.
If a have physical nexus in GA do I have to collect and remit online sales from ONLY customers in GA or do I have to remit all the sales I have in shopify no matter the state (i'm talking only about physical nexus, haven't reAch economic nexus in any other state yet)
When I'm filling the sales tax in GA (because of physical nexus) do I have to pay for all the sales in all the states or only the sales from customers in GA?
Hello 👋, i have a question if you don’t mind. If I live in USA California on sales tax do I just pay for California since I lived here all my life or all the states/countries I ship to?
Hi. I can't advice you on your specific situation. You should register, collect, and remit sales taxes for states where you have physical presence and states where you have economic nexus, as I talked about on the video.
@@5MinuteBookkeeping Great will do! but one thing im not understanding as well is the physical presence... does an apartment or house count?... (NFA learning purposes only) please and thank you!
I believe you are referring to income taxes - which you file and pay during tax season. Sales taxes are not the same as income taxes. Sales taxes are collected and remitted to various states in the US. Income taxes are paid to the IRS.
1. Is it the state that we keep inventory meaning that we have nexus? ( Because we will store inventory using Amazon FBA warehouses, No physical presence but using warehouses to store inventory ) 2. Is it the state that we store inventory need to register a Sales Tax Permit for collecting sales tax? Thanks!
Hi Leung. Generally speaking, you have physical presence if you are storing inventory in AMZ FBA warehouses. Keep in mind that Amazon is a marketplace and my video was addressing Shopify sellers and that Shopify is not a marketplace. Amazon is subject to sales tax marketplace facilitator rules. That means that in most states, Amazon is responsible for collecting and remitting sales taxes on your behalf.
Hi, I really liked your video with all information. I live in Canada and just started my Shopify store and decided to sell everywhere in world. so can you please help me for which country I need to setup collecting sales tax.
Hello, this video and comments have been very useful. If I have been collection tax on Shopify in other states and am not even close to meeting the nexus in each of those states, what do I do? I have their tax $ and don’t need to report it. Should I turn it off of my Shopify options? I do not think my business will be making those 200 sales or $100,000 sales in each state within the next few years. Should I just choose to only tax them in the state I reside (Nebraska)? Thank you for getting back to me 💗
I can't advice you on your specific situation, but, if you are collecting sales taxes on states where you haven't reached nexus, technically, you should submit the sales taxes collected to the states. You should at the very least stop collecting sales taxes in those states until you reach nexus. If you need expert advice, reach out to salestaxandmore.com. They specialize in sales taxes.
Hi, for the thresholds for example I'm looking at a chart-- it is saying in AZ's threshold is 100k in 2021. Does this mean I start paying sales tax in that state AFTER I hit that threshold?
If the threshold is $100K in a state and you have met the threshold for that state, you would then register to collect sales taxes in that state and then start collecting and remitting sales taxes.
Hi. I'm not familiar with sales tax rules and how they apply to international sellers. But, check out salestaxandmore.com . They specialize in sales taxes.
Great video! So, I have a sort of unique situation. I'm in CA, so I'm registered in CA to charge taxes, but we sell items from different vendors (drop ship) that have nexus in different states. So it's a bit of a nightmare situation. Would it make sense for me to not charge tax anywhere other than my state and just pad the price so that I still collect extra money since all of my vendors will have the extra tax fee when they ship their items?
also, different tax professionals seem to feel differently on how to handle. I don't think anyone truly understands. A nightmare (as you say) is a very good way to describe it. I imagine there are many many companies in the same situation.
@@scottdaughtry4206 I'm a drop-ship retailer selling on Shopify. I live and work out of my home in California. I have 2 drop shippers - 1 in California and one in Florida. I have physical nexus in California but not in Florida and I don't have economic nexus in any other state. As such, I only collect sales taxes when I sell to someone in California. Everything else is out of state and subject to Use Tax meaning that it's up to the end customer to pay use tax on their purchase in their own state. HOWEVER - If you sell on any big online marketplace (eBay, Amazon, etc) they will collect and remit sales tax in most states (a handful don't subscribe to that ruling so you'll still have to start to collect and remit taxes if you have physical or economic nexus in those states when the time comes) for you so you don't add sales tax or pay sales tax to any of your sales from those online marketplaces. Hope that helps.
@@Newtonwoodcraft I am new to this but i'm in the process of setting up my Shopify store. I currently live in Florida and have registered by LLC in Florida. Does that mean I need to get up sales tax in Shopify for all customers? Or just customers that buy from Florida?
im new to this and trying to understand so bear with me. I just opened my shop and made my first sale - it was a test sale from me to me! ha ha. that is where i noticed that no taxes were being taken out. I don't even know if this shop is going to profit. Lets say I do not meet the nexus standard for any of the states. for the entire year I only make 10 sales. Do I still need to register in each state to pay sales tax on those 10 items? I don't want to spend money on taxjar or a CPA if I know that I am not going to be making many sales because this is a hobby. thanks for the help.
Thank you for the information. What happened when I am located outside of the USA but selling in different states via drop shipping, do I need to register to collect taxes as well? How this sales tax would work for me? TIA and Best Regards
Hi Ana. It would be best if you contact a sales tax specialist who can give you more in-depth advice than I can give. Contact salestaxandmore.com. They specialize in sales taxes.
If you set up the Shopify sales tax settings to collect sales taxes, then it's your responsibility to remit the sales taxes to the appropriate jurisdictions. Shopify does not remit/pay sales taxes for you.
You can try to register and see if the state allows you to register if you haven't met the minimum threshold. It depends on each state and their rules.
I jus started my store, how does taxes in general work for Shopify? Do I have to write them off and do the taxes or is it based on how much I make or what?
I explain in the video how sales taxes generally work for Shopify sellers. I believe you are referring to income taxes - those are different than sales taxes. It's always best to talk to your tax preparer about your income taxes since there are state income taxes and also federal income taxes in the US.
It depends on each state and how they tax digital products. You may want to reach out to Sales Tax And More. They specialize in sales taxes and can help you to identify if you have nexus in the states where you are selling.
I was wondering this as well. If I am selling digital products in the state of Michigan will I charge my customers taxes and sales taxes from them through Shopify when in the state of Michigan all digital products are tax exempt? Please, provide me an answer when you can because I really need to know this.
Thank you for the information. I read someone that even though for example myself I collect and remit taxes in 6 states the other states that I cannot charge sales tax because I didn't meet the requirements yet I would have to let them know they still have to pay a use tax to their state because they are the end consumer.
I'm not sure where you read that but I would think it's not your responsibility to let your buyers know that they may have to pay for use tax. That's just my opinion, though. You may want to consult with a sales tax expert. Check out Sales Tax And More.
I thank you for this video but now I'm more scared to do shopify. I'm. Making good money on Etsy and they do the tax paper 📜. This made me more confused 😩😭😭
@@5MinuteBookkeeping Just to clarify i think you said Step 1 determine if you need to first collect taxes right using "Nexus rules" if you don't no need to setup taxjar etc but if you meet the requirements we do correct?
Hello! Good day to you! I am residing in Singapore and am very new to the dropshipping business. Do I have to charge taxes on all my products that I'm selling?
Hi, I can't answer that question since there are many factors that should be considered. I'm also not a sales tax expert. But check out salestaxandmore.com. They are sales tax experts in the US and can probably answer your question.
If you're not registered to collect sales taxes, you would not charge sales taxes to your customers. Of course, you should register to collect sales taxes if you have nexus in various states.
Many online sellers are doing the same. It's important to work with a sales tax professional who can do a nexus study for you and see if you should be collecting and remitting sales taxes in other states.
Hi. Great information. One question for clarity. When remitting sales tax to a state, does that mean only after the state's nexus threshold requirements have been met? Or for all sales even if the Nexus requirements have not been met? Thanks!
Hi. You would collect and remit sales taxes only for states where you have met the state's nexus threshold requirements.
@@5MinuteBookkeeping how would you know you met the threshold requirements as the year is going on and you are making sales?
Has the law changed for collecting sales tax online? My shop is in MO but we ship from IL and all over the USA - please any help would be appreciated. Shopify collects sales tax from customer by what state they live in but they don't REMIT! Trying to ensure we are following law.
Hi. The best resource for sales taxes is salestaxandmore.com. They specialize in sales taxes and can help you make sure you're staying in compliance.
Hello it says you would put link down below of the tax jar and sales tax and more, but I can’t see it
Here's the link to Sales Tax and More salestaxandmore.com
Hi Veronica, I like your videos :) They are really helpful. I'm planning to do QBO bookkeeping for US clients who sell on Shopify, but I'm not sure if as a bookkeeper I'm supposed to deal with Sales Taxes or if it is the task of the accountant? I'm asking because I know that for other types of businesses (non-ecommerce) US business owners hire the bookkeeper to record transactions and at the end of the period they give these records to the accountant (CPA) to deal with taxes, adjusting entries and other things necessary to close the books. Or, because most likely Sales taxes will be due monthly or at least quarterly, it could still be the bookkeeper's task to deal with them, so can the A2X app calculate the right amount of tax due and I can link it to Sales Tax Payable account in QBO? (I've seen in this video that you showed a section of the app relating to Sales Tax, but you said it is a more advanced topic, so you wouldn't be expanding on it here).
US sales taxes are complex and bookkeepers are not required to prepare the sales tax returns for e-commerce clients. We don't do that for our clients. Instead, we refer them to a sales tax expert such as salestaxandmore.com
Thanks a lot, Veronica :)
Excellent video!
Thank you very much for your hard work.
You're welcome.
Thank you for your informative video . I have a unique sutuation tho , i live outside the USA , i am NOT a citizen of the United States either but i am interested in starting my ECommerce store on Shopify . My question is , do i need to have a ssn o tax number to start my Shopify store ? And can i start Shopify as a citizen of another country ?
Hi. You should check with Shopify regarding what their requirements are for providing a tax identification number.
Hello I'm new to shopify and I'm selling physical products out of Oregon to all US states. Do I tick the box for 'Charge tax on this product'? on product page?
Hi. I can't provide you with specific advice since I don't know enough about your individual situation.
Thank you so much, I'm wondering how I charge people arournd the world tax? I live in Ohio and I'm collecting taxes for Ohio state
You would likely need to consult an international sales tax/VAT tax expert. I recommend www.avaskgroup.com/
I have an online store and located in Florida. If I don’t have nexus in any other states then do I just pay the sales tax on my orders from Florida?
If you don't have economic nexus in other states, then you should be collecting and remitting sales taxes where you have a physical presence (Florida).
I only have a tax ID in one state. How do I charge taxes on my shopify e-commerce site when customers order from a different state other than the one I'm registered in? Thank you!
Hi Katherine. You may want to review the video again where I explain things in more detail. But, as I mentioned, each state has different rules and you must first meet the threshold in each state. Once you hit the threshold in a state, you need to register to collect sales taxes. And after you register, then and only then, you would set up to collect sales taxes in Shopify.
Each state has a different economic nexus criteria. Am I really supposed to memorize all of them in 50 states and know when to start collecting tax there? That's impossible.. Is there a way to do that automatically?
Check out TaxJar. You can sync it with your Shopify store then TaxJar will start tracking your nexus in each state.
thanks for asking this because I was thinking the same!
okay so what if I sell the products online, but the fulfillment center is in New York and I am in Indiana? Do I charge sales tax for both states or just my State that I actually live in?
I can't give you tax advice but you may want to reach out to salestaxandmore.com. They are sales tax experts and can do a consultation with you.
We use Avalara for Sales Tax but frequently the Sales Receipts that get imported into QBO from Shopify get "changed" by the Avalara App and the sales tax is no longer correct. We have to perform a lot of manual adjustments. The owner is frustrated and wants to get rid of Avalara but we file sales tax in multiple states. What could be causing all of the sales tax errors in QBO from the Shopify imports?
I believe we communicated about this over email already. I hope you found a solution.
Thanks for this video! I am new to shopify - switching over from Big Cartel. All customers from Big Cartel were automatically charged sales tax when applicable in their state. I am the sole employee of my small business in Virginia. How do I ensure that customers from EVERY state will pay sales taxes (when applicable)? Thanks!
If you have economic nexus in a state, then you'll need to set up the sales taxes in Shopify so that it can collect sales taxes for you.
Please someone help!! I plan on opening my Shopify store within the next few months. So I want to make sure I understand this correctly.
I live in North Carolina which is a Destination State. So does that mean I would only pay sales tax on purchases made by customers within North Carolina, and not other state customers. I only would start paying other state sale tax when I make nexus by 200 transactions or $100,00 in sales in that state, then I would have to pay sales tax.
Is that correct? Please if anyone knows I’d really appreciate it!
Hi Tiffany. Since I'm not your accountant, I can't advice you on sales tax matters. However, keep in mind that a "destination state" is applicable only in instances when you have physical presence in a state.
You would need to look at economic nexus for other states.
This is very complicated. I recommend that you reach out to Sales Tax And More. They specialize in e-commerce sales taxes.
Thank you so much for the video, I've been searching for valuable information like this. I want to start my ecommerce business and I still have two big doubts. Regarding nexus and sales tax, after meeting the threshold and registering for sales tax, will I be responsible to cover sales tax for the amount up to threshold (especially if I meet it within a year)? And the second question is more about how to register for sales tax ID. Some states require both an EIN and an SSN. Is it possible to apply with an ITIN replacing the SSN as a foreign businessman? Thank you again for the quality information you provided and I hope you're able to read and answer to these questions!
Hi. I highly recommend that you contact Sales Tax and More. They specialize in sales taxes and can do a consultation with you to answer your specific questions.
I understand sales tax and nexus, what I don't know is how Shopify handles it. So you collect sales tax where you have nexus. But in my state, the tax has to be broken up by tax jurisdiction where the goods are exchanged. So in my state I would have to break the amount out by State portion, county portion and city portion. Can Shopify do that? If not, then I would have to export all sale by customer and their address, zip code into Excel and do a pivot table by zipcode and figure out the tax that way. Please advise if there is a better way. Thanks.
You can set up sales taxes in Shopify by zip code. You may find this article helpful ledgergurus.com/shopify-sales-tax-setup-where-and-how-to-collect/
this made my head hurt. lol.
@@5MinuteBookkeeping So I ask again, are you using Shopify to track your sales tax? If so, then your accounting is split between 2 systems...Shopify and QB. As you know sales tax is calculated based on the rate where the goods are exchanged and in an eCommerce business that is the customers location - much different than a brick and mortar store where the tax rate is punched into the cash register at the store. So eCommerce businesses need to know the tax rate where the goods are exchanged and if you do not bring the zip code into QB then you are relying on Shopify to get your numbers and your accounting is split between 2 systems. Do you think that is an issue? How do you handle it? Thanks.
@@gijeet5374 Using my process (which is also used by other e-commerce accountants), you would not use QBO to calculate sales taxes since you are not bringing in individual transactions in QBO. Assuming that you have economic nexus in a state and also assuming that you have registered with that state, you would set up the sales tax rates in Shopify and collect sales taxes using Shopify. It is then up to you to use either a sales tax app like Taxjar or a service such as Sales Tax and More (salestaxandmore.com) to remit sales taxes. I prefer to use Sales Tax and More.
SO I'm selling online but selling to all states in the US, I charge all states the same sales tax rate as where I sell from which is IL, does that mean I cannot be doing that and have to charge taxes to every state at a different rate ? and what do you mean by meeting the threshold.
Every state in the US has different rules and different sales taxes. Each state has rules for physical nexus (when you have a physical presence in the state) or economic nexus (when you make sales to other states where you don't have physical presence).
To determine whether you have economic nexus in other states, you have to look at each state's threshold (minimum number of transactions or minimum dollar amount of sales). If you meet the threshold in those states, then you have economic nexus.
You may want to contact salestaxandmore.com for a sales tax consultation so that they can give you professional advice regarding how you are collecting and managing your sales taxes. They specialize in sales taxes.
Good information. If you are an online seller, selling in the US. Do you register for all 50 states? please advise.
Hi Alexis. You don't register in all 50 states. You only register in states where you have physical or economic "nexus" and only after you have met the thresholds for each state. Every state has different rules.
Can you still sell to a different state and collect taxes before getting the sellers permit and/or have meet the threshold? I heard you say you can apply after you noticed you meet the threshold for a particular state..correct me if I'm wrong. Please advise. Thank You
For economic nexus purposes, you first need to meet the threshold in a state before you collect sales taxes. Each state has different thresholds which vary based on volume of sales or transactions.
@@5MinuteBookkeeping Thank You for the info. I thought I had to apply for sellers permit for each state first and not only where I live in California.
Hi! Thank you for this! I just started launching my business with Shopify and realized I’m not collecting taxes. I didn’t have any sales yet. I live in Florida, but I had my LLC formed in Wyoming three months ago because I heard it has good benefits. I have no physical store here in Florida. I just want to ship packages from home for now.
Am I supposed to be collecting taxes in all states? If I collect tax in Florida, Will I need to file reports for Wyoming and Florida?
Thank you so much!
Hi Shy, I highly recommend that you reach out to salestaxandmore.com for a consultation. Normally, you collect sales taxes where you have a physical presence. But Sales Tax and More can give you specific advice for your situation.
hmmm I don't understand so if I live in MD and selling t shirts do I need to register just in my state to collect sales tax?
I can't give you specific tax advice, but if your state collects sales taxes, you should generally sign up to collect sales taxes. But you should always contact your state's department of revenue to check first.
hi we are a now Uk based online store .. we aren't vat registered as we are under VAT threshold in Uk .. do we have to charge any vat in Uk , EU or rest of world when we get orders?
is sales tax and VAT same ? thanks a lot
Hi, I'm not familiar with UK VAT rules worldwide. You should check with an accountant in the UK who hopefully provide you with the information you are looking for.
If a have physical nexus in GA do I have to collect and remit online sales from ONLY customers in GA or do I have to remit all the sales I have in shopify no matter the state (i'm talking only about physical nexus, haven't reAch economic nexus in any other state yet)
When I'm filling the sales tax in GA (because of physical nexus) do I have to pay for all the sales in all the states or only the sales from customers in GA?
Generally, if you have physical Nexus, you collect sales that in that state and not in other states.
Hello 👋, i have a question if you don’t mind. If I live in USA California on sales tax do I just pay for California since I lived here all my life or all the states/countries I ship to?
Hi. I can't advice you on your specific situation. You should register, collect, and remit sales taxes for states where you have physical presence and states where you have economic nexus, as I talked about on the video.
@@5MinuteBookkeeping Great will do! but one thing im not understanding as well is the physical presence... does an apartment or house count?... (NFA learning purposes only) please and thank you!
So if you don’t charge customers taxes? Do you have to pay taxes back during tax season?
I believe you are referring to income taxes - which you file and pay during tax season. Sales taxes are not the same as income taxes. Sales taxes are collected and remitted to various states in the US. Income taxes are paid to the IRS.
1. Is it the state that we keep inventory meaning that we have nexus? ( Because we will store inventory using Amazon FBA warehouses, No physical presence but using warehouses to store inventory )
2. Is it the state that we store inventory need to register a Sales Tax Permit for collecting sales tax?
Thanks!
Hi Leung. Generally speaking, you have physical presence if you are storing inventory in AMZ FBA warehouses.
Keep in mind that Amazon is a marketplace and my video was addressing Shopify sellers and that Shopify is not a marketplace.
Amazon is subject to sales tax marketplace facilitator rules. That means that in most states, Amazon is responsible for collecting and remitting sales taxes on your behalf.
Thanks for replying! Same for eBay and Etsy?
I live in Europe, so I do not know do I have to make these tax things? I'm also a teen with no knowledge about these tax things.
Hi Patriks. I am not familiar with European taxes. You may want to consult with an expert in European VAT taxes.
Hi, I really liked your video with all information. I live in Canada and just started my Shopify store and decided to sell everywhere in world. so can you please help me for which country I need to setup collecting sales tax.
Hi. I live in the US and I'm not familiar with Canada rules. But, reach out to salestaxandmore.com. They specialize in Canadian sales taxes.
Hello, this video and comments have been very useful. If I have been collection tax on Shopify in other states and am not even close to meeting the nexus in each of those states, what do I do? I have their tax $ and don’t need to report it. Should I turn it off of my Shopify options? I do not think my business will be making those 200 sales or $100,000 sales in each state within the next few years. Should I just choose to only tax them in the state I reside (Nebraska)? Thank you for getting back to me 💗
I can't advice you on your specific situation, but, if you are collecting sales taxes on states where you haven't reached nexus, technically, you should submit the sales taxes collected to the states. You should at the very least stop collecting sales taxes in those states until you reach nexus. If you need expert advice, reach out to salestaxandmore.com. They specialize in sales taxes.
Hi, for the thresholds for example I'm looking at a chart-- it is saying in AZ's threshold is 100k in 2021. Does this mean I start paying sales tax in that state AFTER I hit that threshold?
I live in DE where there is no sales tax.
If the threshold is $100K in a state and you have met the threshold for that state, you would then register to collect sales taxes in that state and then start collecting and remitting sales taxes.
I am based out of India, and sell my physical products to USA online by Shopify. How to proceed in collecting tax.?
Hi. I'm not familiar with sales tax rules and how they apply to international sellers. But, check out salestaxandmore.com . They specialize in sales taxes.
Great video! So, I have a sort of unique situation. I'm in CA, so I'm registered in CA to charge taxes, but we sell items from different vendors (drop ship) that have nexus in different states. So it's a bit of a nightmare situation. Would it make sense for me to not charge tax anywhere other than my state and just pad the price so that I still collect extra money since all of my vendors will have the extra tax fee when they ship their items?
It would be best if you consult a sales tax expert who can help you make that determination. I highly recommend salestaxandmore.com.
If you find an answer to this question, I would love to know. We are in the very same situation and it is extremely confusing to try and figure out.
also, different tax professionals seem to feel differently on how to handle. I don't think anyone truly understands. A nightmare (as you say) is a very good way to describe it. I imagine there are many many companies in the same situation.
@@scottdaughtry4206 I'm a drop-ship retailer selling on Shopify. I live and work out of my home in California. I have 2 drop shippers - 1 in California and one in Florida. I have physical nexus in California but not in Florida and I don't have economic nexus in any other state. As such, I only collect sales taxes when I sell to someone in California. Everything else is out of state and subject to Use Tax meaning that it's up to the end customer to pay use tax on their purchase in their own state. HOWEVER - If you sell on any big online marketplace (eBay, Amazon, etc) they will collect and remit sales tax in most states (a handful don't subscribe to that ruling so you'll still have to start to collect and remit taxes if you have physical or economic nexus in those states when the time comes) for you so you don't add sales tax or pay sales tax to any of your sales from those online marketplaces. Hope that helps.
@@Newtonwoodcraft I am new to this but i'm in the process of setting up my Shopify store. I currently live in Florida and have registered by LLC in Florida. Does that mean I need to get up sales tax in Shopify for all customers? Or just customers that buy from Florida?
im new to this and trying to understand so bear with me. I just opened my shop and made my first sale - it was a test sale from me to me! ha ha. that is where i noticed that no taxes were being taken out. I don't even know if this shop is going to profit. Lets say I do not meet the nexus standard for any of the states. for the entire year I only make 10 sales. Do I still need to register in each state to pay sales tax on those 10 items? I don't want to spend money on taxjar or a CPA if I know that I am not going to be making many sales because this is a hobby. thanks for the help.
You should register to collect sales taxes in your home state. For other states, you wouldn't register until you have nexus in each of those states.
@@5MinuteBookkeeping Why would we have nexus in any state that isn't our home state? That part is confusing.
Thank you for the information. What happened when I am located outside of the USA but selling in different states via drop shipping, do I need to register to collect taxes as well? How this sales tax would work for me? TIA and Best Regards
Hi Ana. It would be best if you contact a sales tax specialist who can give you more in-depth advice than I can give. Contact salestaxandmore.com. They specialize in sales taxes.
So do shopify just collect taxes but don't pay it to states? Need answers
If you set up the Shopify sales tax settings to collect sales taxes, then it's your responsibility to remit the sales taxes to the appropriate jurisdictions. Shopify does not remit/pay sales taxes for you.
This was really helpful. Is it okay to still register for sales tax if you do not meet the minimum threshold? And if so can you tax on your products?
You can try to register and see if the state allows you to register if you haven't met the minimum threshold. It depends on each state and their rules.
Can you do a video on tax set up in uk if you sell to eu and aroundthr world basically
Hi Tony. Thanks for requesting a video. Unfortunately, I am based in the US and don't know very much about UK and EU taxes.
Thank you for posting! Very much to the point and easy to follow
You're very welcome!
I jus started my store, how does taxes in general work for Shopify? Do I have to write them off and do the taxes or is it based on how much I make or what?
I explain in the video how sales taxes generally work for Shopify sellers. I believe you are referring to income taxes - those are different than sales taxes. It's always best to talk to your tax preparer about your income taxes since there are state income taxes and also federal income taxes in the US.
What about if i am selling digital products in shopify?
It depends on each state and how they tax digital products. You may want to reach out to Sales Tax And More. They specialize in sales taxes and can help you to identify if you have nexus in the states where you are selling.
I was wondering this as well. If I am selling digital products in the state of Michigan will I charge my customers taxes and sales taxes from them through Shopify when in the state of Michigan all digital products are tax exempt? Please, provide me an answer when you can because I really need to know this.
Thank you for the information. I read someone that even though for example myself I collect and remit taxes in 6 states the other states that I cannot charge sales tax because I didn't meet the requirements yet I would have to let them know they still have to pay a use tax to their state because they are the end consumer.
I'm not sure where you read that but I would think it's not your responsibility to let your buyers know that they may have to pay for use tax. That's just my opinion, though. You may want to consult with a sales tax expert. Check out Sales Tax And More.
I thank you for this video but now I'm more scared to do shopify. I'm. Making good money on Etsy and they do the tax paper 📜. This made me more confused 😩😭😭
Hi Brittney. Yes, sales taxes for Shopify sellers is much more complex than Etsy.
@@5MinuteBookkeeping Just to clarify i think you said Step 1 determine if you need to first collect taxes right using "Nexus rules" if you don't no need to setup taxjar etc but if you meet the requirements we do correct?
Hello! Good day to you! I am residing in Singapore and am very new to the dropshipping business. Do I have to charge taxes on all my products that I'm selling?
Hi, I can't answer that question since there are many factors that should be considered. I'm also not a sales tax expert. But check out salestaxandmore.com. They are sales tax experts in the US and can probably answer your question.
If you live in Singapore you don't have to charge tax or pay a dime to IRS in the USA. Just check your GST regulations within Singapore.
So basically if I’m not registered, I can only charge the flat item price?
If you're not registered to collect sales taxes, you would not charge sales taxes to your customers. Of course, you should register to collect sales taxes if you have nexus in various states.
my state won't even give me a reseller's permit without regisering...
thank you so much for the video
You are welcome!
I’m only paying and collecting my states sales tax lol
Many online sellers are doing the same. It's important to work with a sales tax professional who can do a nexus study for you and see if you should be collecting and remitting sales taxes in other states.
I sent an email to contact you
OK. I'll look for it.