The requirement to collect sales tax is based on nexus, both physical and economic. There are a lot of posts on here explaining nexus but if you just do an internet search on economic nexus, you will get lots of information. In short, economic nexus is based on total sales volume (100k to 500k in most states) or quantity of transactions ( Usually 200 I think), in a given time period (like last year or this year to date).
Thank you for getting in touch. I'd be happy to explain in more detail how sales taxes work in the United States and outline when you are going to need to register for sales taxes in a state.
Firstly, it's worth noting that only 45 of the 50 US states have sales taxes at the state level. The five states that do not charge sales taxes at the state level are Alaska, Delaware, Montana, New Hampshire, and Oregon. Alaska does have slightly different rules, however, as some local jurisdictions do charge sales taxes in certain cases.
For the majority of states where sales taxes are charged, whether or not you are required to register for sales taxes and charge them to your customers will mostly depend on nexus laws. You can be determined to have a tax nexus in a state based on physical factors, such as having an office or a warehouse in a state, or through economic factors. An economic nexus is typically determined by you making a certain number of sales to customers in a state on an annual basis, or by generating revenue over a threshold set by the state.
If you are deemed to have an economic nexus in a state, you will likely need to register your business for sales tax in that state and begin charging sales taxes to your customers from that state when they place an order. Shopify provides plenty of documentation on US taxes that I'd recommend reading:
I hope this helps, but please let me know if you have further questions. We would also recommend speaking to a tax professional if you are unsure of your obligations.
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