Please Help! how do I enter taxes?

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New Member
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Ok, I unchecked automatically calculate tax and set the default rate for EACH state. Shopify put in the tax rate for each state. Fingers crossed this works. 

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Tourist
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I don't think this is a complete solution as you will most likely be on the hook for city and county taxes on top of each state's base rate. I would suggest consulting a tax pro on this, however most seem unprepared to deal with Wayfair. No doubt, Shopify has severely dropped the ball here by not offering the functionality to shop admins to make this easier. For example, I have my shop configured to automatically collect sales tax in my home state of WA, but I need to enter *every* zip code for a state where I have no physical presence but do have economic nexus? Seriously, Shopify...step it up. Of course I think they are happy to force us to buy (and receive their cut) additional apps to handle even this basic need for remote sellers.

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Shopify Staff
Shopify Staff
53 1 6

Hi Jo-Lynn,

This is really good feedback!

It's a challenge for us to know what your liability might be, but the current tax settings do let you specify where in each state you want to collect. 

We're working on improvements here, and will take your feedback into account to make this simpler than our current setup that requires you to enter a zipcode for each state you wish to charge taxes in. 

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Shopify Staff
Shopify Staff
53 1 6

I don't think this is a complete solution as you will most likely be on the hook for city and county taxes on top of each state's base rate. I would suggest consulting a tax pro on this, however most seem unprepared to deal with Wayfair. No doubt, Shopify has severely dropped the ball here by not offering the functionality to shop admins to make this easier. For example, I have my shop configured to automatically collect sales tax in my home state of WA, but I need to enter *every* zip code for a state where I have no physical presence but do have economic nexus? Seriously, Shopify...step it up. Of course I think they are happy to force us to buy (and receive their cut) additional apps to handle even this basic need for remote sellers.

 

Hi Katherine,

Thanks for your feedback. I feel you, and I agree with you. This is something we're working on improving. Keep an eye open here in the Community as we'll be soon providing an opportunity to preview what we've been working on, and have your feedback help guide the improvements we're making.

Thanks!


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Tourist
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When? The Wayfair decision was in June 2018 so it's been at least 18 months with no clear support for remote sellers with economic nexus by the Shopify platform.

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Tourist
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Entering a zip code for states where we have economic nexus only works for destination states. If it is an origin state then the shop needs to enter every zip code in that state in order to trick the cart into calculating the correct municipality rates for the customer.

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Tourist
3 0 0

I agree! I sell in other platforms and they collect the taxes for us and send them to the respective states. 

Shopify is the largest platform right now. They should have a better understanding that this is a huge issue for sellers and try to find a quick solution. 

I started collecting taxes this year but I only use one zip code for each State. My question is. what happens next. I'ave had sales where I collected taxes in Washington and san francisco. what happens next?? do i need to send the taxes myself to each state??? or is shopify sending the taxes for me? how does it work? 

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Shopify Staff
Shopify Staff
53 1 6

I agree! I sell in other platforms and they collect the taxes for us and send them to the respective states. 

Shopify is the largest platform right now. They should have a better understanding that this is a huge issue for sellers and try to find a quick solution. 

I started collecting taxes this year but I only use one zip code for each State. My question is. what happens next. I'ave had sales where I collected taxes in Washington and san francisco. what happens next?? do i need to send the taxes myself to each state??? or is shopify sending the taxes for me? how does it work?

 

Hey Oscar, thanks for the feedback. 

Something worth clarifying is that Shopify works a little bit different than those other platforms. Platforms like Amazon, or eBay, or Etsy are the seller of record for transactions through those marketplaces. This means, you have a B2B transaction with the platform for your items, and they then sell it to the buyer via the marketplace. These are called marketplace facilitators. 

Shopify is different, in that your store is your store - we just power it, but you handle the transaction and the contract of sale between you and the buyer. We cannot collect and remit sales tax on your behalf as the contract is between you and the buyer, and you're responsible for the sales tax. Think of the service Shopify offers today as similar to the landlord you rent your business from, rather than a marketplace you sell your products via.

If you know you have nexus in the states you mentioned, you will need to register and remit the sales tax. You shouldn't be collecting sales tax in states that you do not have nexus in. We're also working with some of our experts in the accounting and taxes realm to provide services to help you determine your nexus liabilities and where you should charge taxes. We don't have insight into your entire business outside of Shopify, and because we're not the merchant of record as we're not a marketplace, we cannot just collect and remit on your behalf. We also cannot just make assumptions and charge taxes without you telling us where you're liable, because it's also not proper to collect taxes you should not be collecting.

That said, this is all very valuable feedback - it's interesting to know there's an appetite for this to be something that's taken care of on your behalf, and while I can't promise the current behaviour will change it's still something that could be an input into our future direction. It's an interesting problem for us to solve, and I can understand how much confusion and pain it causes. 

 

 

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Shopify Staff
Shopify Staff
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Entering a zip code for states where we have economic nexus only works for destination states. If it is an origin state then the shop needs to enter every zip code in that state in order to trick the cart into calculating the correct municipality rates for the customer.

This is a good point, and it's not ideal or intuitive the way it's configured today. 

That said, in Origin states, unless you have a physical location or other place of business, it's likely that you should be charging the destination rate in those states anyway - especially in cases where the product is being shipped into the state from out of state. This is known as an interstate transaction. 

Where this doesn't work, is if you're shipping intrastate (inside the same state, if it's an origin state) - you're then correct, you'll need to currently add multiple zipcodes.

 

 

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New Member
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I have a whole different can of worms along the same issue that I can't seem to find an answer. I already pay full sales tax for my products. When I sell I am getting a reimbursement. I need a flat rate tax for all areas shipped to. I can not figure how to make the taxes area do this. I have read every file I can find. Changing state taxes would be lying as I am not collecting individual tax from each state.

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