Collecting Tax in the US

[AshleyArango]

Hello..

My question is about collecting tax. I am working on consulting with a tax expert but in the meantime I wanted to ask the question here.

I am in Florida. I sell and ship T-shirts and accessories ONLY in the United States with a few exceptions. I have a business location. So from what I understand I have nexus.

Under the SALES TAX COLLECTION section do I need to collect from each state in the US? and then do I only register with that state if I meet a certain threshold?

I am set to collect sales tax in Florida only currently.

Any insight would be appreciated.

Thank you

[Victor]

Hi @AshleyArango,

When you're selling in the United States, you generally only need to charge and remit taxes in states where you are deemed to have a tax nexus. As you are based in Florida you will have a tax nexus in the state, and will therefore need to charge taxes when a customer from Florida orders from your store.

A tax nexus can be defined through both physical means or by economic ones. For example, if you were to have a warehouse, products or employees in a state, that would likely deem you as having a physical presence there and you would therefore have a tax nexus in that state, and taxes would be applicable. You can also have a tax nexus in a state without having a physical presence there, however—most states will have economic nexus laws, meaning you are deemed to have a tax nexus in a state if you meet certain thresholds in terms of selling there. This might be based on the amount of revenue you earn from sales into a state, or by the number of orders you receive from customers in a state over a certain period of time.

Shopify has more information about this over on our Help Center, and I would recommend reading our articles on US taxes, tax registrations and determining your tax liabilities. While this will give you a general overview of your obligations, speaking to a tax professional is always recommended if you are unsure of when and how you are meant to charge and remit sales taxes, so I would commend you on deciding to do so.

Please let me know if you have any further questions.