How do I correctly set up taxes for dropshipping in the US from Germany?

[Niklas13]

I live in Germany but want to dropship in the us and the rest of the world. How do i set up taxes right?

[Victor]

Hi @Niklas13,

Thank you for getting in touch. I'll be happy to offer some general advice about US-based taxes below.

Sales tax in the United States is generally dependent on tax nexuses, and whether or not your business has one. If you are deemed to have a tax nexus in, say, New York and California, then you'd likely need to register for sales tax in those states and charge sales taxes on orders made to customers in those states. A tax nexus can be physical—such as having a warehouse, office, or employees in the state—or economic, which is based on factors such as how many orders you are receiving from a state or how much revenue you are receiving from customers within the state. 

If you are just starting out and have no physical presence in the United States, and if your products are sourced from outside the US, then you likely won't need to register for sales tax and charge taxes on your orders for now. However, please bear in mind that while this is the general rule, you'd be best served speaking with a tax professional if you are unsure of your obligations.

There is also more information on sales tax in the United States over on our Help Center, which I'd encourage you to read. This explains in more detail what tax nexuses are, and how your tax liabilities are determined within Shopify.

I hope this helps but please let me know if you have more questions.