Do I need to pay sales taxes to all 50 states?

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I sell online only from outside my home in Arizona. I sell to all 50 states. Once I hit the tax thresholds, am I paying taxes to all the states I am selling to or am I paying everything to Arizona? I understand all states have different thresholds for when you are required to start collecting sales tax.

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Shopify Staff
Shopify Staff
1420 138 323

Hi @Audra,

Thank you for getting in touch. I will start my response by stating that we cannot offer professional tax advice, and we will always recommend that you speak to a professional tax consultant if you are unsure of your obligations.

As a general rule, if you and your business are based solely in Arizona—meaning you have no physical presence or employees working in other states, or have anything elsewhere that would be deemed a tax nexus—then you will only be required to charge and remit sales taxes in the state of Arizona. If, lets say, your business expands and you decided to hire an employee in another state, you would then likely be deemed to have a tax nexus in this other state, and would be required to charge and remit sales taxes in this new state when customers from that state order from your store.

States also have distance selling thresholds, meaning you may be required to pay sales taxes on orders sold to other states if you meet these thresholds. As an example, we can look at Nevada, which determines that businesses who receive over $100k or make 200 transactions into the state in a year as having an economic nexus, as per the tax blog TaxJar's guide on sales taxes in the state. If you meet this threshold, you would then be required to register for and pay sales taxes to the tax authorities in Nevada.

To reiterate, this is generalized advice and may not be specific to your business, so speaking with a tax professional is always advisable if you are not confident that you are managing your taxes correctly. I hope I was able to offer some help here though and please let me know if you have further questions.

Kind regards,

Victor | Shopify Social Care

Victor | Social Care @ Shopify 
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