What if i set my store address to a US address?

[Anonymous]

Hello.

I have a question i couldn't an answer for anywhere.

I'll start by saying i am a NON US individual, have nothing registered in the US, except for an EIN i am planning to get with my real address.

But my supplier is in the US.

I need to set my store address to a US address for some certain settings..

So, here's the million dollar question:

If i set my store address to Delaware, will i be clear and don't have to bother about taxes because i am not based in the US?

I'll keep it short so my topic doesn't get confusing.

Thanks.

[Victor]

Hi @Anonymous,

Thank you for getting in touch and for detailing your query. There's some considerations you'll want to be aware of when setting your address, which I will detail below.

With regards to collecting sales taxes, whether or not you need to collect and pay sales tax in a state comes down to whether you have a tax nexus in the state in question. An example of a nexus would be a physical store, an office or a warehouse, so if your supplier stores the goods you sell in Delaware, that would likely constitute as you having sales tax nexus in the state of Delaware. I would recommend checking out this great TaxJar article on defining tax nexuses to better understand this.

Having a sales tax nexus in a state means you may need to acquire a sales tax license, with different states having different requirements. However, Delaware is one of the few states in the US that do not have a sales tax, meaning you may not need to collect any sales tax if this is the only US state you have a tax nexus in. One other consideration is any sales tax you are liable to collect and pay for the country you personally are in, even if your products are stored and shipped from the US. For these reasons I would suggest consulting a tax professional on your situation and asking for their advice on what your tax liabilities are for both the US and the country you currently live in.

Another consideration when setting your country in Shopify is which payment gateway you want to use. If you set your address to be one in the US, you will see Shopify Payments as an option for accepting credit card payments, but there are other requirements other than simply having a US address listed in the store. As an example, you could not use a US Shopify Payments account without having an account with a US banking institution, or without being a resident or citizen of the US. I would suggest reading through our Terms of Service for Shopify Payments to determine if you are eligible. There are a wide variety of other gateways you can integrate with Shopify, but likewise you would need to check their service terms when it comes to having a US account whilst residing in another country.

I hope this has answered your questions but please do let me know if you have any further comments or queries.

Kind regards,

Victor | Shopify Social Care

[Anonymous]

@Victor

So according to this nexus thing, my nexus is in NJ since my supplier ships from there.

But i am planning on setting my store address to Delaware, and according to your reply ( or at least what i came up with after reading it ), i don't need to bother about sales tax since im supposedly in Delaware.

I only need to register within NJ and pay taxes according to its laws right?

But what about Delaware? Do i need to pay there too since my address is there?

[Victor]

Hi @Anonymous,

You can have nexuses in multiple states, so in the scenario outlined you'd likely have tax nexuses in both states of Delaware and New Jersey. Even if you set the address in Delaware as your store's address, you'll want to add your supplier's address as a physical location in your tax settings within Shopify. I'd recommend checking out the taxes section of our help documentation to learn more about setting everything up within your Shopify admin.

As mentioned, Delaware does not have a sales tax at this time, but for New Jersey you will want to look into what you are required to do in terms of collecting and paying sales taxes in that state. TaxJar has a New Jersey-specific guide that I'd suggest reading through, which you can find here.

I'd also reiterate my point that we can only offer general guidance on this matter, so to be completely sure of your tax obligations, seeking consultation with a tax professional would be a good idea. There are however plenty of resources, such as the aforementioned TaxJar, that can help you understand in more detail what you're required to do.

Kind regards,

Victor | Shopify Social Care

[Anonymous]

@Victor

Thank you very much for the help.

I'll take it to TaxJar from here.

[Victor]

Hi @Anonymous,

No problem, and I'm glad I can help. TaxJar is a wonderful resource - I've used their website a lot to try and wrap my head around US taxes, which can be a confusing topic much of the time.

Best of luck with everything and please do let us know if you have more questions!

Kind regards,

Victor | Shopify Social Care

[SalesTaxSupport]

Hey 

I am just following up as a new tax partner with Shopify. You may have this handled by now.

Here is a chart on the updated economic nexus laws and there are 27 states that have 200 transactions as thresholds. As you pass those thresholds that trigger nexus in each state.  Here is the chart: https://salestaxsystem.s3.amazonaws.com/Sales_Tax_Compliance+_Economic_Nexus_Shopify.pdf  Your supplier may request a resale certificate also.   

I hope this helps. 

Kind regards, 

Scott Letourneau

SalesTaxSystem.com