aliexpress dropshipping sales tax
Published on: December 30 2022 by pipiads
1. The video is about tax obligations for Aliexpress drop shippers.
2. It is important to pay taxes to avoid legal consequences.
3. Meeting tax obligations is easy for Aliexpress drop shippers.
4. The video only covers tax obligations for selling to customers based in the USA.
5. Everyone needs to pay income tax on profits made from dropshipping.
6. Sales tax is another form of tax that not everyone is required to pay.
7. Sales tax is only required if you have nexus in a state.
8. Nexus means you have a physical presence in a state that requires you to collect and pay sales tax.
9. You only need to collect and pay sales tax for customers in the state where you have nexus.
10. The video is not a substitute for advice from a qualified accountant.
Table of Contents About aliexpress dropshipping sales tax
- How to pay tax when dropshipping with Aliexpress? Do you need to pay tax if you live outside of Us?
- How to do Taxes in Dropshipping- Complete Guide for 2022
- Everything You Need to Know About Sales Tax for Dropshipping
- MAJOR UPDATE: How to Pay Tax When Dropshipping (How to Pay Sales Tax with Shopify)
- How To - US Sales Tax Charged By Alibaba
- Drop Shipping From China — How To Deal With Import Duties And Taxes | #311
How to pay tax when dropshipping with Aliexpress? Do you need to pay tax if you live outside of Us?
1. The video is about answering questions regarding what kind of tax needs to be paid when dropshipping to the US from countries like Germany or Australia.
2. The two taxes to consider are income tax and sales tax.
3. Income tax is a tax paid on profits or earnings.
4. If you do not make a profit, you do not need to pay income tax.
5. If you make a loss, you can claim it as a tax credit.
6. Sales tax is a consumption tax on goods or services and is collected by the retailer and passed on to the government.
7. Nexus refers to having a physical presence in a state or owning property in that state.
8. If you have nexus in a state, you are required to collect and pay sales tax in that state.
9. The sales tax rate varies by state, and you need to collect and pay the appropriate amount.
10. You need to pay income tax in the country where you live, and sales tax in the state where you have nexus.
How to do Taxes in Dropshipping- Complete Guide for 2022
1. Only worry about taxes and legalities of dropshipping after you start making sales.
2. Collect all receipts and keep track of expenses, profits, and fees on a consistent basis.
3. Every expense should have a receipt and be organized in a folder.
4. Invoices are crucial and should be automatically generated for each customer through software.
5. It is important to have one supplier or agent to make accounting easier.
6. Working with multiple suppliers can lead to issues and a lot of time spent on accounting.
7. Having an organized folder of receipts and invoices is important in case of government audits.
8. It is important to understand how much profit and loss you made.
9. Get an accountant or someone who knows what they are doing for taxes.
10. Do not take this video as legal advice, it is only based on personal experience.
Everything You Need to Know About Sales Tax for Dropshipping
1. The video discusses sales tax in drop shipping scenarios.
2. The three parties involved in a drop shipping scenario are the customer, the seller, and the drop shipper.
3. The customer only deals with the seller, who then deals with both the customer and the drop shipper.
4. There are two transactions in a drop shipping scenario: between the customer and the seller, and between the seller and the drop shipper.
5. The seller will have nexus (physical presence for tax purposes) in their home state and any state where they have economic nexus determined by customer transactions.
6. Economic nexus is determined by a state's threshold for the number of transactions or dollar value of sales within that state.
7. Only worry about economic nexus created by customers, not where the drop shipper has nexus.
8. Economic nexus can vary by state, with some having higher thresholds than others.
9. The video provides an example of a customer in Utah buying from a seller in California who uses a drop shipper in Utah.
10. The seller would have physical presence in California and economic nexus in Utah only if they meet the threshold for customer transactions in Utah.
MAJOR UPDATE: How to Pay Tax When Dropshipping (How to Pay Sales Tax with Shopify)
1. Dropshippers need to pay income tax and potentially sales tax.
2. Income tax is paid on the profit that the store makes for the year.
3. If there is no profit, no income tax is paid, and losses can be claimed as a tax credit.
4. Income tax is paid to the government of the country where the dropshipper resides.
5. Sales tax is when a governing body places a tax on goods or services sold within their jurisdiction.
6. In the USA, individual states manage sales tax, and each state can set their own tax rate and laws.
7. Some states in the USA are sales tax havens, where no tax is required to be collected and paid.
8. Nexus is a legal term that means a sufficiently large physical presence within a state to be required to collect and pay sales tax to it.
9. In the past, only states where a dropshipper had nexus required them to collect and pay sales tax.
10. However, a recent Supreme Court ruling abolished this law, meaning dropshippers may need to pay sales tax regardless of nexus.
How To - US Sales Tax Charged By Alibaba
1. Alibaba has started charging sales tax for shipments to the US due to Trump tariffs.
2. There are ways to avoid paying the sales tax, such as changing the shipping address or using a different payment method.
3. Changing the shipping address to outside the US will eliminate the sales tax.
4. Using a payment method other than Alibaba's payment protection program will also avoid the tax.
5. OFX, PayPal, and other payment processors can be used instead of Alibaba's payment protection program.
6. Having an LLC in the US and obtaining a resale certificate can also avoid the sales tax.
7. Speaking with the Chinese supplier and using their address as the shipping address is a simple solution.
8. Freight forwarders can also be used for a shipping address outside the US.
9. Paying directly into the supplier's bank account can eliminate the tax and may result in a discount.
10. It is important to research and ensure there is zero risk when paying directly to the supplier's bank account.
Drop Shipping From China — How To Deal With Import Duties And Taxes | #311
1. Yvonne's question is about dealing with import duties and taxes for high-priced items.
2. If total order value is below the tax-free barrier, items won't be held by customs and there will be no additional cost.
3. For items over the tax-free barrier, be transparent about the fact that products come from another country.
4. Don't try to present your store as a fully local business.
5. You don't have to specify that products come from China, but make it clear that the package will be coming from abroad.
6. Let customers know that they might have to pay additional taxes or import duties for the product.
7. Include this information in your shipping section and on the product page.
8. By doing this, you imply that there might be import duties and taxes, which is normal for any shipment coming from abroad.
9. Customers have to inform themselves about import duties, and it's their job to pay them.
10. Being transparent and upfront about international shipping should prevent any issues.