Taxes

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Tourist
11 0 1

Hi, we are new to Davo. We were recommended by Rich Babbit with Suntrust. We use Clover for our in store and shopify for online, however we just purchased a integration where we can have the two joined. We are having trouble figuring out how taxes work. If say someone in FL or CA buys from our website which is located in GA, do they pay our tax rate or do we have to let them pay there own rate for that state? 

Lastly, we need to make sure with our integration that we are not paying taxes twice. I don't think we will since shopify doesn't automatically pay your taxes. We assumed with the integration that the sales in store and online will combine and Davo will pay the GA tax at the end of the month. 
We just need answers and clarification if we have to pay out of state taxes online or in store.
Thanks
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Shopify Staff
Shopify Staff
680 50 152

Hey, @insandouts333!

Julie here from Shopify Support.

When it comes to collecting sales tax, Shopify can handle this for you with automatic tax calculations.

It sounds like you're located in the United States, in which case you'll just want to follow our US sales tax setup guide here. This guide will walk you through the process of setting up tax regions in the Settings > Taxes section of your Shopify admin, where you'll be prompted to enter a ZIP code of the region where your business has a physical presence. Based on this ZIP code and your customers' shipping address, sales tax will automatically be calculated for online orders, so there's no need to worry about how specific states handle taxes.

That being said, you can view a breakdown of how each state handles sales tax here. It looks like Georgia is a "destination state", which means that the sales tax you charge is based on the address of your customer and unless you have nexus in states outside of Georgia, customers from other states will not be charged sales tax. 

While this answers your question around collecting sales tax on online orders, the process will be a bit different for in-person orders since you're using a third-party POS system. In this case, tax collection will likely be handled by Clover.

Is there a reason why you're using Clover POS rather than Shopify POS? With Shopify POS, you can manage both online and in-store transactions within a single platform, which means you won't need to use Davo or Clover. Since you're selling both online and in-store, it sounds like you'd really benefit from Shopify POS. You can view a breakdown of the Shopify POS features here. I'd also be happy to discuss this with you! 

As for submitting taxes, you're correct in that Shopify does not submit your taxes for you. However, merchants using Shopify Payments in the United States will receive a 1099-K form if more than $20,000 in orders has been processed and if they have more than 200 transactions. This form is generated by Shopify Payments and provided to both you and the IRS on an annual basis. You can learn more about the 1099-K form here.

Since Shopify is unable to provide tax advice, it would ultimately be a good idea to consult with local tax authorities or a tax professional. They will be able to verify that you're remitting and filing your taxes correctly. 

I hope this helps, but let me know if you need any further clarification. 

Julie | Social Care @ Shopify
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Tourist
11 0 1
Yes we are using Clover because it allows you to have multiple vendors. We
have about 4 sellers in our store and they all have there own sells.

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