Who pays sales tax when sale is made on shopify? On ebay platform ebay collects tax and pays. How does it work on shopify platform?
Topic summary
Sales Tax Responsibility:
Unlike eBay, which collects and remits sales tax directly, Shopify merchants are responsible for both collecting and remitting sales tax themselves. Shopify provides tax calculation tools in Settings → Taxes and Duties, but does not handle remittance.
Recommended Solutions:
- Enable automatic tax collection in Shopify settings
- Consider using third-party tax filing services like TaxJar or Avalara for automated reporting and remittance
- Consult a tax advisor for specific requirements based on business location and obligations
Related Question:
The original poster also asked about refund fees for a same-day cancellation ($1011.94 sale, $984.32 refunded), but this question remains unanswered in the thread.
Hi @RJ2007
On Shopify, you (the merchant) are responsible for the collection and remittance of sales tax. Shopify provides tax calculation tools but does not remit the tax on your behalf as eBay does. You must report and remit the taxes after collection to the respective state or country based on your business location and tax obligations.
To keep things simple, you can enable automatic tax collection in Settings → Taxes and Duties, and investigate using a tax filing service like TaxJar or Avalara to automatically report and remit taxes. If you’re unsure of your specific tax requirements, we recommend consulting with a tax advisor.
Hope this helps 
1 Like
Hello,
A customer made a sale and that same day customer contacts us to cancels the order. Do you guys refund the fees?
Refund was $1011.94 and paid $984.32