Why are only in-state customers charged tax on my Shopify orders?

Richardson1014
Visitor
1 0 4

Hi, I just noticed that some of my orders are not having tax added to them. I think I've narrowed it down to customers that live in my state are being charged but customers outside of my state are not being charged? Anyone know what's going on? I've made sure all my products are checked to have tax added. 

Replies 64 (64)
lightning_art
Tourist
4 0 3
You don't. If you don't have a physical address in a different state, you
don't charge sales tax which also means you don't have to file those sales
in your sales tax return
davisvarghese
Visitor
2 0 0

So my issue is I have printful integrated with shopify. Shopify only charges tax to customers in my state (Oklahoma) but not outside my state. But printful charges me tax on each order. So for orders outside my state where the clients are not paying tax, it is going out of my profit. am i just supposed to eat the taxes for all my out of state orders? thats a big chunk of my margins.

AshleyCole
New Member
6 0 0

I don't get it either. My business license is in WV and my store is only adding tax for customers in WV nowhere else!! That means I have to pay for their tax? I am so confused. I have done every override. I can't add in every state there isn't even an option for it. Did you figure out a solution, no one can help me? 

allison_wilcox
Excursionist
19 0 22
Hey there Ashley!

Here's what I do. Customers in Texas get charged sales tax. No one else
does and we are small enough that it's not an issue (to worry about having
to pay sales tax in other states).

Every month I go through our sales ledger and add up the amount of sales
that we did not charge taxes on. When we do our sales tax report with the
state, there's a box for non taxable sales. (all of the out of state stuff
and any tax exempt in state sales). We just enter the number there and pay
sales tax based on what taxes we actually charged in state customers. I
hope that makes sense 😉
DowningHouse
Tourist
8 0 2
You only collect and pay sales tax for your state. You are not required to
collect sales tax for other states. Check your state online...but that's
how it is in MO where I am.
ARena1
Visitor
2 0 0

Have you figured this out? This is currently my situation. I’m looking at the number that I made like omg most are out of my state and taxes wasn’t tooken out so basically. When I file this income it’s looked at as I didn’t want taxes taken out when in actuality charges can’t be taken out for things I sell that’s going to a different state. 

the only thing is I did see where you can add funds to your items you sell to cover certain things. So I’m thinking what I may have to do is set money to the side or charge a small amount that’s added to what i sell to cover the taxes that aren’t being added so that at the end of the year i have that money for uncle same ugly ass

nelNELLYnel
Visitor
1 0 0

Hello, I'm also wondering about this. I tried clicking on the link provided in Max's post, but it doesn't work and just re-directs me back to this page.

gigistexas
Tourist
5 0 4

Did you get this resolved? I am having the same issue. Tax charged in Texas where I am located but bot other states.

Max
Shopify Staff (Retired)
583 19 93

Hi, @gigistexas.

Max, again! I would not expect taxes to be charged to all customers in the United States if your shop is based in Texas only. For some more details on how US taxes work within Shopify, please check out this help doc

If, for some reason, you need to charge and collect taxes for more regions and countries, I'd suggest adding some overrides and exemptions to your shop by following these steps. If you need any further help implementing exemptions, let us know!

If you need some tax advice (what to charge and where), then you might find a local authority is best. Here are some options for US-based merchants;

 

I hope that helps point you in the right direction!

 

Best, 

Max

To learn more visit the Shopify Help Center or the Community Blog.

allison_wilcox
Excursionist
19 0 22

I'm having the same problem and will try the work around  later today.    It's uber counter intuitive.

CowboyChannel
New Member
4 0 0

No, unfortunately I haven't resolved this issue yet.

Neddymtz
Visitor
2 0 0

where you able to figure it out?

AshleyCole
New Member
6 0 0
Nope, it’s really frustrating!
tax_pro
Explorer
39 0 36
Hi AshleyCole and Neddymtz,

I am a state and local tax professional specializing in multi-state sales and use tax consulting services (as I've stated previously in this post). You are welcome to call me with your questions and I am happy to "shed some light about this topic" for you. My phone is 713-858-0085. Have a great day!

AshleyCole
New Member
6 0 0
How do you do that? I’ve never seen this option?