Thank you so much Gigistexas!
I did some research tonight that suggests we actually don’t have to charge
tax on out of state sales from texas, which brings up a separate accounting
nightmare…but…hey, one nightmare is as good as the next, right/
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