I have a question to the tax pro Jerry! I’m in WA state and will be selling online from my home. From what I gathered earlier on in this thread or another is that taxing in states outside of your origin is dependent on if your state is origin or destination based. Is that right? It seems that WA is destination based - therefore Shopify should automatically collect sales tax from my buyers dependent on their shipping address?
thank you in advance
Topic summary
Store owners are confused about Shopify’s default tax collection behavior, which only charges sales tax to customers within the merchant’s home state. Many merchants mistakenly believe they need to charge tax on all orders and are concerned about paying uncollected taxes.
Key clarification from tax professional:
- Merchants should only collect sales tax in states where they have physical presence (nexus) or meet economic nexus thresholds
- Most states use $100,000 in sales OR 200 transactions as thresholds
- Charging tax without proper state registration is illegal (“collecting not remitting”)
- Origin-based states like Texas still only tax in-state sales at the origin rate
Common issues reported:
- Tax only charging for home state customers (working as intended for most cases)
- Confusion about whether to manually add tax rates for all states (generally not recommended)
- Some reports of tax calculation errors after platform updates
- Difficulty getting clear guidance from Shopify support
Recommended actions:
- Consult local tax professionals to determine actual obligations
- Only enable tax collection in states where legally required to register
- Use tax overrides cautiously and only when necessary
- Verify economic nexus status in other states before expanding collection