Hello,
I’m hoping someone can help me. And I really appreciate your time in advance!
I just received my first Shop app order and notice in the order amount box it shows the sales tax the customer is paying. I do not have a nexus in this state. But through research, I found it’s because the Shop app is a ‘marketplace facilitator’ so supposedly Shopify automatically collects and remits taxes when purchased through the ‘Shop’ app. Okay.
But, my question is: do I still ‘capture’ the tax amount? It shows the sub-total of $34 & tax of $3.50 for a total of $37.50. Do I capture $34 or $37.50? If I capture $37.50, will the $3.50 automatically be deducted from the ‘capture’? I don’t want the $3.50 to end up in my bank as that is theft and illegal - I do not have any sales tax certificates in that state (as I do not have a nexus in that state).
If I only capture the $34, what happens to the $3.50? Does the customer not get charged that $3.50, even know they should be (according to the fact they used the ‘Shop’ app)? Would that mean I would be charged the $3.50 from my bank then?
If the ‘Shop’ app is supposed to collect and remit automatically, why am I seeing any sales tax here? It should just show $34 then, not allowing me to screw this up and forcing me to make this post in the hopes someone gets back to me soon…ugh
Thank you very much in advance!
For Shop purchases, you do not collect the tax. It is retained by Shopify, and will not go into your tax account (if you have that set up). So, you capture the total amount. The tax is then deducted from your payout. Nexus becomes irrelevant since it’s the Shop sales channel.
Hi,
Thank you for the speedy reply, I really appreciate it.
So just to be clear: I capture $37.50 but only $34 will go to my bank (payout method). Correct?
I still just don’t understand why I see taxes in that box if I’m not supposed to care about them (when purchases are made with the ‘Shop’ app). Just confusing.
Thanks!
Yes, exactly. You shouldn’t even see it. That screenshot is simply a standard order information that is going to include everything that is charged to the customer. Even though that’s not the exact amount you will get. Confusing at first, but it’s fine just ignore it.
Very good, thank you for the help and information. It worked exactly as you described - I captured the $37.50 and it says it will deduct the $3.50 automatically.
Thanks again!
Consult an actual accountant in real life not strangers on the internet about financial, tax, or legal concerns.
NOTHING said here can save you from getting it wrong.
For safety if you do larges amount of business treat it like you have handle the tax and put that amount aside to avoid nasty nasty surprises.
This topic has been resolved, thanks.
