New Online Tax Laws - a Deal Breaker?

New Member
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I have purchased extended licences for my artwork, created and updated product, and have my Shopify site ready to go. I then did my tax research and have been learning about the recent update to online taxes. This seems like a deal breaker to me. How am I supposed to tracking state taxes for every state? Am I missing something? Do I only need to worry about this if my sales are over a certain number? How are all of you going to deal with this? At this point, I'm considering not opening my store until it becomes clear how this new online tax will work and knowing the govt. that could be years. 

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Explorer
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We've been diving into this topic as well since it directly impacts our Shopify eCommerce sales.  The recent Supreme Court ruling opens the door for all states to charge sales tax on remote sales.  But, each state has their own requirements and thresholds and most smaller sellers will not be impacted.  For instance, you have to sell $100,000 worth of goods into South Dakota before you have to pay them sales tax but for Washington state, it's only $10,000.  So as a new seller, you most likely will not be impacted by this at all.  If you are, there are apps that can help, such as Avalara and TaxJar.

Here's a link with some useful information: https://blog.taxjar.com/top-30-questions-south-dakota-v-wayfair/

And here's my rant on this: this is placing a huge burden on medium-sized sellers to try to sort all of this out considering that there are 12,000 different tax jurisdictions in the United States.  It is incredibly confusing and causing undue panic - even our accountants pretty much passed the buck and told us that we need to figure this out (they recognize the burden and don't want to deal with it other than filing the taxes that we tell them to file).  The states and fed need to come up with sort of unified approach or this is going to become completely unmanagable and cause small businesses to cease operations.

 

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New Member
3 0 0

I really appreciate the reply. I have been all over the internet reading what I can. I have really tried to be compliant in every way on this. It seems as though the new internet tax is undeveloped and I think the reality of it is totally unknown at this point...by anyone - accountants, the govt. and companies like Shopify. I don't even think the people that voted on it realize all the ramifications. I do think I will kick of my shirt company and if I do exceed the monetary threshold then I'll get more in depth on the tax consideration. Once again - much thanks!

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Explorer
44 0 18

No problem.  It's nice to be able to commiserate with others about this.  I think your approach sounds good - you'll only need to be collecting and submitting taxes for sales within the state that you have a physical presence in. 

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New Member
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PS - What theme are you using - looks great!

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Explorer
44 0 18

Thank you!  We started with one of the themes from here and have highly customized it: https://themes.shopify.com/themes/kagami/styles/kyoto

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Community Manager
Community Manager
2184 138 291

Hi Jimmie, 

Nick here from Shopify. ?

I just wanted to follow up one step further from what was mentioned above in the reply to you. Shopify has a blog post with information and how it affects you directly as a seller on the platform which you might find useful. You can see it by clicking here

Hope this helps and don't hesitate to reach out should you have any other questions about anything else. 

All the best, 

Nick

 

Nick | Social Care @ Shopify
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New Member
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I have purchased extended licences for my artwork, created and updated product, and have my Shopify site ready to go. I then did my tax research and have been learning about the recent update to online taxes. This seems like a deal breaker to me. How am I supposed to tracking state taxes for every state? Am I missing something? Do I only need to worry about this if my sales are over a certain number? How are all of you going to deal with this? At this point, I'm considering not opening my store until it becomes clear how this new online tax will work and knowing the govt. that could be years. 

The states and nourished need to think of kind of bound together methodology or this will turn out to be totally unmanagable and cause independent ventures to stop tasks.

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Shopify Partner
90 2 10

Nick, thanks for the helpful link! I am working with our CFO in getting this squared away. Quick question about implementing it in Shopify. I am going into one of our Shopify Plus sites but I don't see the Avalara tax service area listed. Just the options to include taxes in my prices, charge taxes on shipping rates, and configuring country tax rates.

Am I missing something? I did just install the Avalara TrustFile app in Shopify. 

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Shopify Partner
90 2 10

Here is screen shot from Shopify under Settings --> Taxes.

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