How charge and remit sales tax for digital items?

Accounting & Taxes

Topic summary

Topic: How to charge and remit sales tax on digital products when selling online (Shopify).

Key points:

  • Process depends on your location (country/state). You should confirm rules with your local or state tax authority, especially for how and when to remit (i.e., pay) collected taxes.
  • Shopify can calculate and charge the appropriate sales tax at checkout and provides reports showing taxes collected over selected periods.
  • For guidance, use Shopify’s tax documentation. The correct US-specific resources were provided after the initial link confusion and include further US links at the bottom of the page.

What’s answered:

  • Calculation/collection: Shopify’s tax system assists with charging the correct amount.
  • Tracking: Use Shopify reporting to see taxes collected.
  • Direction to authoritative guidance: Check US-specific Shopify tax docs and your state tax authority for remittance requirements and frequency.

What remains open:

  • Exact steps for setting up tax per state and remittance procedures/timelines are not detailed in-thread and vary by jurisdiction.

Status: Partially resolved with links to US-specific documentation; no unified step-by-step process provided.

Summarized with AI on December 30. AI used: gpt-5.
1

Hi there,

I sell digital products and am trying to sort out the process of charging sales tax and then remitting the sales tax to the proper place. How do others take care of this? Do you need to manually setup the sales tax figure for each state/ jurisdiction? After collecting the sales tax, what do you do with it/ how do you ensure it gets paid to each state/ jurisdiction? How often do you pay it, etc… Looking for guidance on the entire process- Thanks!

2

Hi @hnewf ,

This process really varies dependent on where you are based. I’d recommend checking out your local country’s tax authority with regards to rules regarding the remittance of sales taxes, or to your state’s tax authority if you’re based in the USA. Shopify’s tax system will help you charge customers the correct amount of sales tax when the customer checks out and you can use our reporting tools to see how much tax has been paid over different periods. I’d recommend reading through our tax documentation to learn more about this process in terms of managing taxes on Shopify.

3

Thanks so much! It looks like the link provided is specifically for taxes
in Japan- Is there another link available for U.S. sellers?

4

Hi @hnewf ,

The link shared should include a list of tax-related pages for various countries. The specific page for US taxes can be found here and on this page you should see other US-specific links at the bottom.