I’m not familiar with U.S. sales tax. I would like to understand how it works when selling through Shopify to customers across all U.S. states. Our company is established in Texas and has obtained a Texas sales tax permit.
Setting up Shopify Tax for Texas:
Since you’re already registered, you can enable collection in Texas by going to Settings > Taxes and Duties > United States and then tap “Collect in a new state” and choose Texas.
After you activate tax collection, review the following considerations:
- If your products have reduced rates or tax exemptions, then set the product category field or establish both a product tax override and a shipping tax override in each state or region.
- If you have customers that are exempt from taxes, then you can change the tax settings in their customer profile.
Determining other states:
For US sales, each state has its own economic nexus thresholds (typically $100,000 in sales or 200 transactions in a state). If you use Shopify Tax as your tax service, you’ll get liability notifications when you’re approaching or have exceeded these thresholds in each state. You’ll see this in Settings → Taxes and duties → United States, and you’ll also receive notifications in your notification center as you approach 80% of a state’s threshold. So it’s not entirely manual — Shopify helps you know when and where you need to start collecting.
Here are some resources to get started: