Financing, tax rates, and accounting
I have been reading through the tx documents Shopify has and I am still unsure if I need to register or not and how I need to set up taxes if at all at this point. I am based in TX, I am currently using Printful and will most likely add Printify. Our shop isn't open yet but will be soon so I just want to make sure I have everything set up right.
1. Do I need to register now? or hold off until Shopify's sales tax insights alerts me to?
2. Do I need to set up taxes with the companies I am dropping through if I set them up here in Shopify? I don't want to be paying twice.
3. We are a sole proprietorship if that makes a difference
I don't have perfect answers but it's a start. Search for info on physical or economic nexus in a state. Also check out whether or not the type of product/service that you provide is subject to sales tax. This may vary between states. It has been my experience that if your product/service is taxable in your state, you should be registering with your state and collecting/remitting sales tax from the start. Your volume or transactional quantity in other states will determine if you meet economic nexus or not and when you should begin collecting for other states.
A drop shipment is usually taxable depending on nexus. Check into destination sales. You will probably find some reference to it in your economic nexus research. The tax rate is typically determined by the destination address and local jurisdictions.
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