Sales tax exemption US

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New Member
2 0 0

We have certain customers who do have a sales tax exemption.

Is anyone aware if we forced by law to offer an upload for the tax exemption or if an field during checkout with a tax number would be enough?

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Community Moderator
Community Moderator
2869 209 469

Hi there, 

Nick here from Shopify. ?

Great question as taxes can be difficult even on the best of days. 

One thing we always suggest regarding anything to do with taxes is to consult with your local tax office or an accountant. Tax law is something we are not experts in, and consulting with an expert in the field is definitely your best bet. We can help you with adding in a tax exemption within Shopify though. The way to do this is to create a product or collection to be tax exempt for the tax-exempt customers. Shopify has a helpful guide going through all the steps on how to do this here

Hope this helps guides you on the best steps to take here. 

All the best, 

Nick

Nick | Community Moderator @ Shopify Out of Office until May 27th
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Pathfinder
150 5 12

Hi

This guide may help you answer your question.

Hope it helps!

Avada is an e-commerce solution provider based in the heart of Vietnam where the best developers unite. Founded in 2017 by Mageplaza, Avada is responsible to complete the mission to help 1 million online businesses grow revenues.

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Tourist
4 0 1

Many jurisdiction require merchants to have a form on file - somewhere - when a customer claims a tax exemption. So you need to allow people to upload the form, or mail it to you, or something. This would only be checked in the event of an audit/lawsuit, which is extremely unlikely from an out-of-state sales tax agency, for a small merchant. 

 

“Nobody is talking about enforcement mechanisms, or even thinking about that,” said Verenda Smith, deputy director with the Federation of Tax Administrators. “Everybody is still in the stage of having elected officials work out what they want as a tax policy, generally getting their laws and guidance in place.” 6/19/2019.

 

The reality is that sales tax is a giant evolving pain in the butt in the US right now. see https://community.shopify.com/c/Accounting-Taxes/The-mess-around-US-out-of-state-sales-tax-aka-WARNI...

 

So what you are talking about it likely to be just fine, as long as you don't use a program which participates in the Streamlined Sales Tax (SST) program. They generally require you to upload a form for every exempt customer.  

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