Not charging taxes to everyone

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New Member
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Hello!

I just wanted to clarify for myself since I’m new to this thread. I do not have a brick and mortar and I run my entire business online. My sales are under $50,000/year since I am a small business. I currently am in Michigan and I charge MI sales tax for those purchases made online from people within my state. Obviously shopify doesn’t charge tax for my products when out of state purchases are made.
Do I even need to be taxing my items at all? Even within Michigan? From what I am understanding, because my business is all online and so small, I do not need to tax my items. I just wanted to check!
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Excursionist
20 0 11
Hi Kdriskell88
Your business still has nexus (a physical presence) within Michigan because that is where you as the owner of the business reside. Therefore the business is required to be registered for sales tax in Michigan.
Also the sales volume is irrelevant since physical nexus had been established.
Hope you find this helpful
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I am in Missouri and this tax thing has fought me every step of the way regarding setup. I work from home and all sales are online. If I am understanding correctly, I will only charge sales tax to Missouri customers. All customers from states other than Missouri will not be charged sales tax nor will I include their sales on my Missouri Sales Tax form that I submit and pay. Am I correct in my understanding?  Also - Shopify is automatically charging city sales tax, however, I do not have to collect for my city as my physical residence/business is not in the city/unincorporated land. How can I not have the city tax in there? Thanks for any insight!

 

Rossann

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Excursionist
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Hi Rossann,

 

Yes your understanding is correct.  As far as Shopify including the city sales tax I think that is because they are using the highest rate for your zip code so I'm speculating that part of the zip code boundary is inside the city and part is outside.  In order to exclude the city rate you'll need to setup a tax override for the entire state of Missouri since I'm assuming that you will be reporting all Missouri sales at the same rate correct?  

If you need help setting up override start with this link - https://help.shopify.com/en/manual/taxes/tax-overrides?utm_source=gurucopy&utm_medium=link&utm_campa... - and then go down to this section - Override the taxes on a collection or on shipping charges.  Lastly I suggest you initiate a test transaction from your website to confirm that the rate you want to be charged is now the rate that Shopify is applying.

 

In regard to whether or not you have a requirement to register and collect sales tax for another state did you happen to see my earlier comments concerning "economic nexus"? If you'd like to discuss that subject further please call me 713-858-0085.  Reason is so that I can help you make an informed business decision for not registering in a state where you may have met their requirement to register under their economic nexus laws.

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So...how do I set up a tax override for the state of Missouri? I need someone to explain it to me as if I am 6. I have a doctorate degree and cannot figure out how to make this durn thing calculate the shipping correctly. I put in an override for Missouri [under shipping] of 5.6%, which is the state and county tax I should collect. It is still collecting too much. 

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Excursionist
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Do you have the override set in both the product and shipping sections of the overrides? Is the rate 5.6 only set on the (state) with the boxes for (county) and (city) below the state checked and their rates set to 0% ?
If so the only other thing to do is send me an email (jerry.shopify@tsttllc.com ) with screenshots of your tax settings screens so I can tell what needs to be changed.
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New Member
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No and no. The product overrides requires manual collections and mine are automatic. The shipping override is just 5.6% for MO. I do not see boxes for city and county. 

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Excursionist
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Please send the email that I previously described
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New Member
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Email sent

 

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