Setting up tax rates

New Member
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I had an order placed from Michigan and they weren't charged any tax. Then i had an order placed on the same product from New York and they were charged state tax and county tax. Is there somewhere I have to go to setup tax information? Or does Michigan not have any tax?

Replies 2 (2)
Shopify Staff
Shopify Staff
1109 106 352

Hi, @joeypower!


Julie here from Shopify Support.


Great question. In the United States, sales tax depends on two important concepts: nexus, and origin-based or destination-based tax. Most states, including Michigan, use a destination basis, which means that you'll be charging sales tax at the rate in the state where your product is delivered. If you are using Shopify's automatic tax rates, then sales tax is always calculated automatically, based on these conditions. Do you have automatic tax rates set up?


It's also important to note that in June 2018, the United States Supreme Court ruled that states can also require online sellers to collect sales tax based on economic nexusBecause this court ruling is recent, I recommend that you consult with a tax expert to find out whether you have nexus and to make sure you are collecting and remitting taxes correctly. If they determine that you do have nexus, then there are some further steps to take in setting up your taxes within Shopify, outlined in our guide on how to set up taxes for economic nexus.


To learn more about how sales tax is calculated in the United States, I recommend checking out our help doc on United States taxes; it further explains the sales tax concepts in the US, along with examples of how tax is charged in different states. Ultimately, it's definitely worth consulting with a tax expert to find out whether you have nexus so you can ensure that your business is charging tax correctly. 


I hope this helps! Let me know if you have any further questions. 

Julie | Social Care @ Shopify 
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Shopify Partner
257 10 36


I found this Shopify tax guide list on Avada, It includes many useful instructions to set up tax on Shopify. 

I hope it's useful to you.

Avada is an e-commerce solution provider based in the heart of Vietnam where the best developers unite. Founded in 2017 by Mageplaza, Avada is responsible to complete the mission to help 1 million online businesses grow revenues.