Calling all Oregon, Alaska, Delaware, Montana, and New Hampshire Shopify store owners! How do you handle sales tax?
I thought I wasn’t supposed to collect sales tax because my economic nexus is only in Oregon, which doesn’t have sales tax. But I noticed that none of my customers who live in states that DO have sales tax are NOT being taxed for their purchases. How is the sales tax for each individual state being collected?
Am I actually supposed to collect sales tax for all the other states that I don’t live in or operate in? Or was I right to not collect sales tax? What do you do?
Setting up US taxes can definitely be tricky, especially with all the different taxation laws in each state! You are correct, though, in that you need to have an economic Nexus in order to charge taxes.
While we can assist you with setting up your taxes, we aren’t tax professionals. As such, it’s important to speak with a tax professional to understand what your sales tax requirements are for your region and the regions you sell to.
In the meantime, while you are investigating this, you can disable charging sales tax. You can do this by heading to Settings > Taxes > United States, and ensuring all states are set to 0%. Another option is deselect ‘charge taxes on this product’ within each of your products.
Once you have determined when, and who you need to tax, you can reinstate the required taxes. Additionally, we do have a built in tax feature available called Shopify Tax which will calculate the correct taxes you need to be charging.