Understanding billing and taxes for a new US-focused drop shipping store?

Accounting & Taxes
1

Hi,

I’m starting a new Shopify store, but before I launch it I’d like to make sure I’m doing everything right from billing, and taxation POV.

Here are a few things about my Shopify shop.

I’m located outside of the united states, but I want to sell mostly for US citizens.

I want to start with drop shipping only.

  1. How should I choose the state my business address will be on? from tax perspective?
  2. Since I’m only doing Drop Shipping, can my business be registered outside of the US?
  3. Does Shopify calculate taxes automatically when a customer makes a purchase on my store?

Thank you,

2

Hi, @Powercouple .

Congratulations on getting started with your new store!

The address you list for your business and where you register should typically be where you’re operating the business from, even if you’re mainly shipping to another region. Since you’re dropshipping, products might be shipped to customers from various locations, but the constant will be where you are located.

You can set up your Shopify store to calculate taxes automatically, under Settings > Taxes and duties. I recommend speaking with a tax professional in your area to determine the taxes your business might need to collect.