Taxes - US customers \Dropshipping - Print on Demand

[Ben_Neorai_Gate]

Hey everyone,

So first of all, I am not a US citizen, my business is not registered in the US, rather on my country (Israel).

Now I know I should getting an advice from an taxes advisor (which I sure will) - But my question is a bit more generally and maybe some of you have experience with that.

So how is it going to work? the items are wall art canvases, the prices range is between 60-500$, I'm only going to sell for now to US customers, my supplier is located on the US (so the manufacturing is in the US). 

Now I don't plan to charge for taxes (if there is any), I'm informing the customers to know that they will be in charge on that.

Do I need to set the location, that the items will be shipping from? I also saw that the location is a factor that may cause a taxes - so I need to set each location of my supplier? they have several locations on the US - do i need to set all of them??

Or can I just set my location? (I have a US address that I'm rental for receiving mails which I use as a formal address for the business).

I hope I make any sense, thank you for your help!

The community here is very helpful 🙂

[Nick]

Hi @Ben_Neorai_Gate,

Nick here from Shopify. Great questions, taxes can be difficult to navigate even at the best of times!

The first thing I would recommend is to talk to a professional accountant in your locality or your local tax office to see and understand what taxes you need to charge when you make a sale which I see you have mentioned too. I am also in a similar situation with my store and being based in Europe and selling only in the US with a US supplier. But it might be different from where I am to Israel. I set up the location from where the items from my store was being shipped from. If you have multiple locations, it would make the most sense to set up a location for each one, mainly for inventory reasons. You can read more about this in detail here. 

Regarding what taxes to set in your store, I set the taxes for my home country as that's where I am based and where I would pay VAT and treat an order for somewhere like the US as if it was happening outside of the US which it technically is. You can find out more about EU taxes from the guide Shopify has here. 

I hope this helps and answers your questions. Let me know if you have any others! 

Thanks, Nick

[Ben_Neorai_Gate]

Hey @Nick , Thanks for your reply.

Well the inventory isn't an issue, my items are print per demand so that's not a thing.

The different locations of the supplier is more about being able to ship more fast. 

Now as for the taxes I'm not talking about  myself - I know what I need to pay as a business, for example VAT is not something I will charge as I'm not selling to customers from my country.

What I asked about is for the customers from the US, I know that some items, the customer will need to pay extra taxes, and I saw that it depends on the specific item, the cost of it, and where it has been shipping within the US - and that's why I'm trying to understand here if it is necessary to mention exactly where from my product has been shipped within the US, like the specific state and etc.

[Nick]

Hi @Ben_Neorai_Gate,

Completely get that! 

As you mentioned there are several factors which influence how tax should be charged from the US:

But because your business is based outside of the US, I'm not 100% certain you would need to be charging these. This is something you would need to ask your accountant or local tax office about. You can read more on charging US taxes from the guide here also. 

[Ben_Neorai_Gate]

Hey @Nick ,

So I can just set my “shipping from location” to the address I’m using in the US?

not the supplier shipping address?

[Nick · Accepted solution]

Hi @Ben_Neorai_Gate,

I would set the Shipping locations to each supplier address if possible in this instance. The reason being is to make sure the shipping costs are as accurate as possible and not skewed in any way. Plus if you are using multiple or different suppliers but have them all shipping from one address it could get confusing and make things a little messy for you in the long run. You can see the guide for setting up locations for fulfilling orders here.