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.
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.