How do I manage and collect taxes for USA dropshipping?

Gumbari
Visitor
1 0 0

Hi,

We are based in the UK but dropshipping our product from China to the USA.

 

We have reviewed the information on Shopify and the guidance provided tells us that we have to set the correct tax rate per each state. This is one of the links I am referring to - link

 

I'm sure that we are not the only ones who have done/do this. Our question is how do we manage/collect taxes and duties for the USA?

 

Many thanks,

Gumbari

Replies 2 (2)

Victor
Shopify Staff
2503 227 530

Hi @Gumbari,

 

Whether or not you are required to charge sales tax in US states primarily depends on whether or not you are deemed to have a tax nexus in a given state. A nexus can be based on physical factors, such as having staff, a warehouse, or an office in a state, or it can be based on economic criteria, such as making a certain number of sales into a state during a calendar or financial year. If you are deemed to have a tax nexus in a state based on this criteria than you will likely need to register for and start remitting taxes in that state.

 

If you are based in the United Kingdom, are selling your products from China, and you have no products, locations, or staff within the United States, then the likelihood is that you will not need to register for sales taxes in any state yet, or at least until you start making a number of sales. However, please bear in mind that this is general information and that if you are unsure of your tax obligations, we would always recommend speaking with a tax professional to gain some clarification.

 

I would also recommend checking out our Help Center article on registration-based taxes in the US, as well as our guide to charging sales tax in the US featured on the Shopify blog. 

Victor | Social Care @ Shopify 
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James1973
Excursionist
15 0 5

You'll have to look into this for yourself but I have a feeling this 3rd party software is just what you are looking for to simplify this process for you.

https://linkmybooks.com?fpr=trusted-brands-direct