One of the first things you might want to know if you’re selling online is, “Does Shopify collect sales tax?” The answer isn’t as simple as you would expect. Shopify can help you figure out how much sales tax to charge, but it won’t send the money for you. Sellers are in charge of transferring the taxes they collect to the right tax authorities.
It’s important to know how Shopify sales tax works so you don’t get in trouble or have to pay fines. Let’s go into more detail and illustrate how tools like PlugBooks make things easier.
Key Takeaways About Shopify and Sales Tax
- Shopify calculates sales tax at checkout based on your store settings.
- Does Shopify remit sales tax? No, you must remit it yourself.
- Shopify sales tax report simplifies filing and recordkeeping.
- You need to understand nexus laws to determine where you owe tax.
- PlugBooks offers automation for taxes, reporting, and bookkeeping.
Understanding Shopify and Sales Tax
Shopify makes it easier to figure out taxes by automatically figuring out the right rate based on where the consumer is when they check out. This function is helpful if you sell in more than one state or country.
But the regulations of Shopify and sales tax are different depending on where you have a nexus, which is a physical or economic presence.
For instance:
- Do you sell things from a Texas warehouse? In Texas, you have to pay taxes.
- Going over a state’s economic limit, such as making $100,000 in sales? You have to pay taxes in that state.
Does Shopify Remit Sales Tax?
The big question many sellers ask is, “does Shopify collect sales tax or pay it on my behalf?” The answer is no. Shopify does not pay your taxes to the state for you. Instead, you collect the tax and remit it yourself.
But Shopify makes things easier by offering:
- Shopify sales tax report: A full record of all taxes collected.
- Export options: For seamless integration with accounting software and tools like PlugBooks, which can automatically sync your tax data for accurate bookkeeping and faster filing.
Using Shopify Sales Tax Report
For filing taxes correctly, the Shopify sales tax report is a must-have. It gives you a clear picture of the sales tax you’ve collected by state, region, or country, which makes it easy to file your taxes quickly and with confidence. To better understand your tax liabilities, you can sort the data by dates, orders, or places.
You may also export this report and sync it with PlugBooks, which will do your bookkeeping and tax preparation for you without any mistakes. You save time, don’t have to do any math by hand, and make sure that all of your tax information is correct and up to date when you use PlugBooks with the Shopify sales tax report.
Why PlugBooks is Essential for Shopify Sellers
PlugBooks.io is made to make it easier for eCommerce retailers to keep track of their finances. We offer automatic tax syncing:
- It gets data directly from eBay, Amazon, and Shopify.
- Sales reports in real time: Keep track of your taxes and income.
- QuickBooks, Xero & Shopify integration: Effortless bookkeeping.
- Tax-ready insights: Great for staying on the right side of the law all year long.
To understand more about our services, check out the FAQs area on PlugBooks. There, you can find out how we make accounting easier for sellers.
FAQs
1. Does Shopify handle sales tax for me?
No, Shopify only figures out taxes when you check out.
2. Can Shopify file taxes for you?
No, you have to file yourself or utilize tools from other companies.
3. What is a report on Shopify sales tax?
You can receive a report that shows how much tax was collected for each order.
4. Does Shopify charge taxes on subscription plans?
Yes, however it depends on where you live.
5. How do I set up a tax collection in Shopify?
To set regions, go to Shopify Admin, then Settings, then Taxes.
6. What is the difference between Shopify and apps that collect sales tax?
Shopify does the maths, while tools like PlugBooks provide the filing and reporting for you.
7. Does Shopify pay sales tax in any state?
No, sellers are the ones who have to pay.
8. Is it possible for PlugBooks to work with Shopify?
Yes, it syncs all of your sales and tax information so you can easily make reports.
9. Does Shopify sales tax apply to sales made outside of the US?
Yes, Shopify can handle taxes like VAT, GST, and others.
10. How often should I check my tax settings?
At least once every three months or while moving to a new state.
In conclusion
So, does Shopify collect sales tax? Shopify figures it out for you, but it doesn’t send it in. Using the Shopify sales tax report and a product like PlugBooks makes it easy to file your taxes and keep your books straight.
Are you ready to make managing your taxes easier? Go to PlugBooks.io right now!
