Basic state-by-state sales tax

Nikee
New Member
1 0 0

Hello-

I'm looking for some pretty basic information on state-by-state sales tax implications. We are an Australian fashion brand which distributes exclusively online. We are planning on expanding in the US early next year. We are evaluating 3 different options:

1. Shipping individually from China to US based customers 

2. Shipping individually from a NY, NJ, TX, or CA based factory

3. Bulk Shipping product from China to a satellite office in NJ, NY, TX, or CA, then shipping from satellite office to the customer. 

Here are my questions:

A. I am looking for state sales tax implications for each of the options. I understand that sales tax is determined by where the products are shipped from. Is this correct? 

B. If our office is based out of NY and we are shipping to a customer in IL, would there be NY and IL sales tax added? If so, is the company required to cover the NY sales tax and the customer covers the IL tax? 

C. Where can I find information on state by state sales tax? 

D. Is there also a county tax? 

 

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Christian33
Shopify Staff (Retired)
Shopify Staff (Retired)
41 0 6

Hey Nikee:

US tax law is a bit complex. There are state taxes, county taxes and city taxes. Each state has different laws: some charge taxes based on where the order is shipped from, others charge taxes based on where the order is shipped to. Typically, taxes are only applicable when shipped to an address within the same state where you have a physical presence. 

Luckily, Shopify has a tax calculator built into it. Simply enter the zip codes of anywhere you have a physical presence (known as a "tax nexus") inside your settings. Shopify will calculate the appropriate taxes for you. 

I strongly encourage you to check in with the local chamber of commerce where your factories are to ensure you know any specifics about local taxes. 

Happy selling, 

 

Christian G. | Key Account Manager @ Shopify | christian@shopify.com
www_StatesSales
New Member
4 0 0

A. I am looking for state sales tax implications for each of the options. I understand that sales tax is determined by where the products are shipped from. Is this correct? 

In general, sales tax rate is based on the ship-to location.  For specifics please research about the Origin vs Destination States.

B. If our office is based out of NY and we are shipping to a customer in IL, would there be NY and IL sales tax added? If so, is the company required to cover the NY sales tax and the customer covers the IL tax? 

IL sales tax is charged to customer. That's it.

C. Where can I find information on state by state sales tax? 

Google for  "State sales tax rates".  Replace "State" with the desired state.

D. Is there also a county tax? 

Yes there is.   There is city tax also.  Therefore the combined state+county+city rates are different depending on which city the goods are shipped to.

-----

We file multistates sales tax returns for domestic and international corporations.  There is a Internet Retailer trade show in June 2014 http://www.irce.com worth attending for any internet retailer.  If you plan to go, please stop by our booth.

-------- We register and file multistates sales tax returns for domestic and international corporations. There is an Internet Retailer trade show in June 2014 http://www.irce.com worth attending for any internet retailer. If you plan to go, please stop by our booth.
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Courtney_Watkin
New Member
2 0 0

I have a slightly similar issue..... We charge PST and GST on items over $100 but only GST on items that are under $100 in British Columbia. Is there a way to make the item only have one tax? 

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Christian33
Shopify Staff (Retired)
Shopify Staff (Retired)
41 0 6

Hey Courtney!

Check out our new feature "tax overrides and exclusions"

http://docs.shopify.com/manual/settings/taxes/tax-overrides

That should do the trick!

Best, 

Christian G. | Key Account Manager @ Shopify | christian@shopify.com
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