Minnesota Clothing Getting Tax

ferd
Shopify Partner
1 0 0

My orders containing clothing is getting taxed for my Minnesota customers but Minnesota doesn't charge tax on clothing. Any insight as to why shopify is charging taxes on clothing to Minnesota? I know they have the functionality to exclude clothing from tax by using tax:clothing which works for New York, Massachusetts, and Rhode Island (if memory works correctly)

Replies 3 (3)
Andrew
Shopify Staff
Shopify Staff
1416 145 258

Hi @ferd ,

Hyde here from Shopify, thanks for reaching out. 

I would always first recommend that you consult a tax expert, to be clear on what's expected. 

When it comes to US taxes, it depends on whether your business is based in an origin state or destination state. An origin state charges tax according to where you are shipping your products from.

A destination state charges tax according to where you are shipping to.

I would recommend reading this help document on the subject.

By reading the above you can determine what kind of state you're operating from and therefore determine whether taxes are being applied because you're shipping to another state, or because your customers are based in the same state as yourself.

However, if you still feel something is not quite right you can override taxes as you see fit, here's how

All the best, Hyde.

Andrew | Social Care @ Shopify 
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TeresainAZB
Tourist
4 0 1

I sell clothes - I am located in MN and my first sale was to someone in MN -  shouldn't be charged taxes. 

Andrew
Shopify Staff
Shopify Staff
1416 145 258

There are a few conditions you may need to meet to be liable to pay tax in Minnesota and Shopify cannot determine whether you meet those conditions or not for you, nor do we have access to all your potential sales in both the previous calendar year and the current one.
So it is your responsibility, as the owner, to configure the tax settings correctly in your store to apply taxes (or not) and it is your responsibility to remit/file your taxes or not. All we can do is provide you with all the tax tools you may need to charge taxes when you see fit. We cannot account for every possible exemption.

If you opt to use automatic tax settings, you can view the tax breakdowns beforehand. If they do not apply to your specific context, then you can set up your taxes manually.

I hope this helps clarify matters!

Andrew | Social Care @ Shopify 
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 - Was your question answered? Mark it as an Accepted Solution
 - To learn more visit the Shopify Help Center or the Shopify Blog