How does charging taxes work?

New Member
1 0 0

I had my website set so that each product sold would have tax charges.. but I seemed to be getting none of that (tax charge money) after a sale.. (only shipping and product price.) My question is did I do something wrong or does Shopify handle paying taxes for you and that's why I was receiving no money? Im new to this sorry, and thank you! :)

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Shopify only calculates the tax and collects on your behalf during the sale process, it's your responsibility to file and pay.

In your Shopify settings you have to turn on the sales tax collection feature for each of your known sales tax nexus liabilities.

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Tourist
14 0 1

What if we do not have nexus in a state that we are shipping an item to? 

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Each state has thresholds that must be met, once you've reached these, then you'll have to collect sales tax.

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Tourist
14 0 1

Thank you for your response. 

 

If I was to purchase the item from a manufacturer using an exemption certificate, wouldn't tax be due somewhere by someone in instances like that where nexus has not been met. 

 

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Highlighted

Yes when the item is sold to the final buyer sales tax is usually due, if thresholds have been met in the state.

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