Collecting Taxes In All Countries for Drop Shipping?

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Hi!

I have a print on demand shop that runs for mostly US customers but I see "Not Collecting" labels for all countries in my taxes settings.

The shop currently is not open and I am not a US resident so as soon as my LLC is registered in US, it will be on the road. 

My questions are:

1) Do I have to charge taxes or my dropshipper (Printful.com) charges on my products?

2) Do I have to pay taxes in every state or only the state that my business located in?

3) Even though my business is located in the US and sell products to it's citizens, I have customers in UK, Canada, Australia and few more. Do I have to set the taxes at every country individually or does my dropshipper (Printful.com) charges those taxes?

4) Do I have to collect taxes in the rest of the world and if not; how this works?

 

Thank you.

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One more question: What happens if I don't collect or set any taxes?

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This is an accepted solution.

1) Do I have to charge taxes or my dropshipper (Printful.com) charges on my products?

You have to charge taxes.

Except in five U.S. states -- Alaska, Delaware, Montana, New Hampshire and Oregon -- purchasers of most goods and some services must pay sales taxes based on a percentage of the costs of what they buy. Even states that don't levy sales taxes may allow local government units to collect them. All these taxes can apply to anyone who operates or buys from a retail or service business, including some international clients.

2) Do I have to pay taxes in every state or only the state that my business located in?

You only have to pay taxes your llc business is register in.

3) Even though my business is located in the US and sell products to it's citizens, I have customers in UK, Canada, Australia and few more. Do I have to set the taxes at every country individually or does my dropshipper (Printful.com) charges those taxes?

Yes its best practice, there may be a customs fee you may have to charge or pay as well. 

4) Do I have to collect taxes in the rest of the world and if not; how this works?

If you mean keep track of who you tax or set a tax rule yes, you would set a general tax starting out and as your business grows hire an accountant or tax specialist.


One more question: What happens if I don't collect or set any taxes?

Nothing, however at the end of the year when you send your income tax, the IRS may penalize, and have you pay more in taxes then you would have, if you kept track of everything.*


Hope that helped!
*( This is not financial or legal advice, seek the advice of a Professional in the tax field for any legal or financial inquires)

Any more questions? Email me: gerardo@vaius.group
https://vaius.group/ - WEB | APPS | MARKETING
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Thank you so much for explaining!

Most boring but most necessary things made harder to understand... thank you again.

I have one more question and if you feel like I need to hire an accountant for this, let me know.

When you said "Yes its best practice, there may be a customs fee you may have to charge or pay as well." for taxes on mentioned countries, does that mean general tax charging for all these countries or individually? And if individually; do i have to create any official identity in those countries or they have a set of rule for needed tax percentage? like Canada may want you to charge %1 and UK 1.5% (just for example).

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