Questions

Technical Q&A

Topic summary

A Shopify store owner in New York is facing three main issues:

Invoice Payment Problem:
Customers receiving invoices are encountering “invalid address” errors. The cause and solution remain unaddressed in the discussion.

Sales Tax Configuration:
The store correctly collects sales tax in NY but not in other states. This appears to be working as intended:

  • Physical Nexus: Sales tax is required where you have physical presence (office, warehouse, employees). Since the owner is in NY, tax collection there is correct.
  • Economic Nexus: Tax collection becomes required in other states only after exceeding thresholds (typically 100 transactions OR $100,000 in sales over 12 months).
  • Shopify provides tracking tools under Settings → Taxes and Duties → United States → Review Insights, with notifications at 80% and 100% of thresholds.
  • Once thresholds are crossed, the owner must register for a sales tax license in that state and enable tax collection.

Sold-Out Items:
The question about whether to archive or delete items that won’t be restocked remains unanswered.

The sales tax setup appears correct; the invoice and inventory management questions need further assistance.

Summarized with AI on November 2. AI used: claude-sonnet-4-5-20250929.
2

You only need to collect sales tax if you’re shipping to a state where you have nexus. Nexus is essentially when your business presence in a state is significant enough that you’re required to collect sales tax.

There are two ways you can gain nexus:

  1. Physical Nexus: If you have a physical presence in a state (e.g., an office, warehouse, or employees), you’ll need to register to collect sales tax in that state and start collecting tax on shipments to that state. Since you mentioned you’re located in NY, your store is correctly recognizing that you need to collect sales tax there. If you go to Settings → Taxes and Duties → United States and scroll down, you’ll likely see that NY is turned on for sales tax calculations. Based on what you’ve shared, this would be set up correctly.

  2. Economic Nexus: You can also gain nexus if you sell enough products into a state to surpass its economic nexus thresholds. Generally, these thresholds are a minimum of 100 individual transactions or $100,000 in sales into a state over a 12-month period. Once you exceed these thresholds, you’ll likely need to register for a sales tax license in that state and begin collecting tax on sales there.

Shopify makes it easier to track this under Settings → Taxes and Duties → United States → Review Insights. You’ll also get a notification from Shopify when you hit 80% of a threshold and again when you reach 100%.

Once you’ve crossed a threshold, you’ll need to register with that state, obtain a sales tax license, turn on tax calculations for that state in Shopify, and remit the tax to the state when required.

So it sounds to me like you have it set up correctly. Happy to help take a closer look if you want.