Starting December 14th the Government of Canada is providing Sales Tax exemptions on certain qualifying products until Feb 15th, 2025.
Currently, Shopify’s fix for this is that we create Collections and apply a tax rate override, which would be a great solution except for the fact that this override can only be applied to Collections that were created Manually, not using their “Smart Collections” feature.
I have clients that have thousands of inventory items and are a mix between items that qualify for the tax exemption and ones that don’t. It will be insanely time consuming to sift through thousands of inventory items, manually adding each one that applies.
Is it possible for Shopify to allow for us to use the Smart Collections feature to apply the tax overrides? Or will the be coming up with another solution for what I can only assume will be thousands of affected customers?
If any one else has a solution that would be great!
Following this thread as we are running into a similar issue. While well intended that excluding automated collections for normal circumstances, we are dealing with a new adjustment and require automated collections to be included in the tax-exemption list.
When I contacted Shopify Plus Support to see if they will have a solution in place, I received this response:
Please note, our developers are working hard on a solution that will ideally be released before the exemption comes into place. We don’t have additional notes or help docs to share on this as of now, but once they are ready they will be released.
As of November 10th, I have yet to receive any update from them regarding this issue; with 4 days left to go.
I am surprised that a supposedly Canadian company have so little regard to the needs of Canadian retailers.
Mike from Shopify here. We are automating compliance with the Canada sales tax holiday bill. If a merchant has Product Categories up to date, there is zero time or effort needed. Goods with the appropriate categories assigned will be automatically zero-rated.
Hello Mike, thanks for confirming. A question regarding the categories and the taxes on them, are taxes applied according to the category specified on Shopify? When we first setup our Shopify Store, we were told that we need to create a manual collection to override taxes on certain items like baby clothing and baby car seats. Has this been updated so that we can simply select the appropriate category and the taxes are applied accordingly at checkout? or do we still need to use the manual tax override settings?
I’m not 100% sure on how would “Youth” clothing would be categorized, The link above describes children clothing as “Children’s clothes in sizes XS, S, M, or L” and the only size limit I see is on children shoe sizes with “Children’s footwear with an insole length of 24.25 cm or less”
Hey HazemK, we’ve implemented this so that if you have your products categorized into one of these categories, Shopify will automatically zero rate the items for the duration of the tax holiday period. No collections/manual overrides needed.
Hope this helps, and hope we made your life a little easier
Hi Shubify, is this only for the Holiday Tax break or is this live for the regular tax exemptions?
For example, Car Seats are exempt from the PST portion of the 13% HST in Ontario, so they are only charged 5%. I am currently using the manual tax override method to get this desired result. If I change the category for car seats accordingly and turn off the manual tax override setting, would Shopify automatically charge 5% tax rate at checkout instead of 13% for Ontario customers?
Thank you Mike for providing this link and providing some clarity. Do you know if Shopify has a plan to send this out as an email or newsletter to all Canadian Shopify merchants? I understand all of us, Shopify included, are running on a tight timeline, but I shouldn’t have to go through pages of google to find the answers I’m looking for buried in the comments on a forum post, especially if this PDF is available and ready to go.
This is only for the holiday tax break for now, given the urgency and potential to harm businesses. Eventually, we’re hoping to bring Shopify Tax to Canada, but it’s not in our near-term roadmap. Hope this helps!
There was an email sent yesterday and banners will go up in admin. Apologies for the turn around time, we’re doing our best given the bill’s status, changes and timelines.
Hi there! You should have already gotten an email sent to you. If you haven’t, please send your storefront name to shub.gaur@shopify.com and I’ll try to understand why you haven’t gotten the email.
Also- we have a note on our help center page here!
I was able to find the info regardless so it’s not a huge problem, just thinking about the people who don’t know how to find things via google unless they’re the first few results.
Sounds reasonable. Do I need to turn off the manual tax override settings we setup in the Tax Settings for our store during this Holiday Tax break period in order to not interfere? According to what I read on the help guide, it sounds like any manual tax override settings we setup would override Shopify’s taxes at checkout. I need to know so that we can have arranged to have those settings turned off during this period.
Yes, please have those manual tax override settings turned off so that they don’t interfere with these categories and our zero rating. Thanks for clarifying!
