When you have a physical store, you have to charge sales tax on the products you sell. The same is true if you sell online through Shopify. You might have to charge sales tax on shipping and handling as well.
The good news is that Shopify can help you calculate and collect the right amount of sales tax for every order, no matter where your customer is located. All you need to do is set up your tax rates in the Shopify admin, and we’ll take care of the rest.
Do I have to charge sales tax on Shopify?
If you have a physical store, you’re probably used to charging sales tax on the products you sell.
The good news is that Shopify can help you calculate and collect the right amount of sales tax for every order, no matter where your customer is located.
How does Shopify calculate sales tax?
When a customer checks out from your store, we use their shipping address to determine whether or not they need to pay sales tax. We then apply the appropriate tax rate based on the rates that you’ve set up in your Shopify admin.
Do I need to register for a sales tax permit?
You might need to register for a sales tax permit if you sell products or services that are subject to sales tax in your state or province.
To find out if you need a permit, contact your state’s department of revenue.
How do I set up my taxes in Shopify?
- From your Shopify admin, go to Settings > Taxes.
1. On the Taxes page, click Add location. 2. In the Add location dialog, enter the name and address of your business.
3. Under “I charge taxes on”, select whether you want to charge taxes on all orders, specific product types, or shipping.
4. Under “Based on”, select whether you want to charge taxes based on your customers’ addresses or the origin of your products.
5. If necessary, click “Add another rate”. This lets you add additional taxes for other product types or shipping methods.
6. When you’re done adding rates, click “Save”.
