Charing Taxes

Madison_Moskowi
New Member
4 0 0

I am just setting up my site and did a test order. One customer buying from GA and one buying from NC. I am based in Atlanta, GA and the tax shows us at checkout for the GA customer. For the NC based customer tax does not show up. I have yet to pay quarterly taxes, but won't i be obligated to pay taxes for all products sold? Meaning shouldnt the NC as well as 49 other states be charged sales tax.

 

Someone help me understand.

 

Lastly, even for my GA customer, the sales tax is add after the shipping instead of before. Even though i unchecked the box to charge taxes on shipping.

Thanks in advance! 

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Tejaswi
Shopify Partner
175 0 35

Hi Madison. Congrats on the Shopify setup. You have asked a common and valid question with respect to Sales Tax. 

Here's are a couple of ground rules based on which sales tax is applied on your orders. 

  • You MUST collect Sales Tax from customers from the states where your business has a physical presence.  It is called a “nexus” in accounting terms. Whether it’s a store, office, warehouse, employees, or other criteria established by your state.
     
  • If you don’t have a presence in a state, then you are NOT required to collect sales taxes. 

So in your case, orders from NC and other states will not be charged Sales Tax till you have a physical presence there. You are not obliged hence to file sales tax for all products sold :). More info on this here: Sales Tax 101 for Small Business Owners and Online Retailers

Hope this helps. Feel free to fire away any further questions. 

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Kristy_Blackbur
New Member
1 0 0

Hi Tejaswi,

I would like to echo Madison's last question above regarding sales taxes being calculated on shipping rates....

I'm also running into this issue.  Lke Madison, I have the "Charge taxes on shipping rates" unchecked, but it is, in fact, charging taxes on the total price after shipping is included.  Can we resolve this as I don't feel this is correct?

Thank you,

Kristy

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