Shopify sales tax setup for stress-free compliance | Walk-through guide

Hi Shopify sellers. This is Kexin from LedgerGurus, And today I'm gonna tok to you about sales tax settings in your Shopify store. I know this is not the most exciting topic and it's just another admin task to add to your list. But trust me, if you can set this up correctly, then you are on a really good path to be compliant with sales tax, and you don't have to pay much out of your pocket. So before we dive into the content, if you haven't done so, please subscribe to our channel and hit that bell so when we get new videos published, you will get notified. So at LedgerGurus, we help so many e-commerce clients with their e-commerce accounting and journal entries and transaction coding and bank reconciliations, But at the same time, we also have a dedicated sales tax team that manage everything that's relating to sales tax for these customers. So I'm in Shopify all the time and I do these sales tax settings for my clients day in and day out. So this is really my arena to share my experience with you guys. Please comment if you have any questions and we'll be sure to get back to you on those questions. So today I'm gonna tok about two things. The first is: how does sales tax work with Shopify. Who's collecting it? Is Shopify like Amazon? And then the second part is I'm gonna walk you through the things you need to make sure you finish setting up on your Shopify store to be sales tax compliant. So to answer the first question, we get lots of inquiries on what's Shopify, How does Shopify deal with sales tax? And the answer is: Shopify is not like Amazon or Etsy or Walmart or another marketplace facilitator where you can just hand over the responsibility to them for to collect and to remit tax to the different states. If you are selling on Shopify, every sale that goes through Shopify is your responsibility to collect and remit sales tax. So Shopify's not gonna do it for you. You have to do it yourself. Shopify's not gonna turn on those settings for you automatikally. You have to turn them on yourself. So then let's tok about how to turn on those settings. There are five things that over the years of my struggle with Shopify that I've figured out, So I hope that this is really helpful to you guys. So the first thing is to enter the places you want Shopify to collect sales tax in. So you would go to settings and you go to Taxes and then you go to US store And then that's where you can add all the states. If you are one of the older Shopify users, you need to add a zip code. If you are using the new interface, which I really like, then you don't have to enter the zip code. You just need to enter your sales tax license and then the state, And then sometimes it asks you which way of sourcing you want. So we can tok about sourcing another time. So that's the first thing, is you need to tell Shopify where to collect tax. The second thing is, after step one, if you go back out of US, if you go to settings and then taxes, if you scroll down- so it's below all the different countries- you can see a box that says automatikally calculate tax on shipping. Some states charge shipping, some states don't. So you would need to check this box so Shopify will calculate tax on shipping And then, for the states that you know are not taxing shipping, you need to go in and add a tax override for shipping in that specific state. The third thing is you want to make sure all your taxable products are collecting sales tax. So to do this you need to go to your products and go to each products. You can edit each variant and then somewhere in the middle there's a box that says charge tax on this product. You want to check that for the products you that are taxable. some products are not taxable, for example gift cards, Those are not taxable, So you would not check the box for those products. Then the fourth thing is you want to add all your locations in from where the fulfillments are going through, So your warehouses that are fulfilling these orders that are sold through your Shopify store. So you would go to settings and locations And at all of thoseThe reason that this is important for sales tax is because some states are origin sourcing, Some states are destination sourcing. So, depending on where the goods are shipped from, if it's an intra-state transaction- meaning if it's shipped from the state to a customer in the same state versus shipped from one state to another state- the rates are very different and where to look for those rates are different. So it's important to put the location of your warehouse there. And the last thing is exempt customers. If you sell to exempt entities or if you sell to like wholesalers that are gonna use your products for resale, then those are all legitimate reasons to exempt sales tax for certain customers. And thus, you would go to customers and you go, edit this customer's information and you check the box to say this is an exempt customer And you can also give a reason on why this is exempt. So to just summarize - five places: first, you need to tell Shopify where to collect sales tax, Then you need to configure shipping options And then, third, you need to make sure your products are all collecting tax for the taxable products. And fourth, you need to add locations of your warehouses. And the last thing is to add information for your exempt customers. Let me know if you have any questions, feel free to leave comments and for sure to get back to them. If you like this video, please like it. Share it with your fellow Shopify users. Hope you all have a good day and I'll see you soon. Bye.

Taxes for Shopify Store Owners

taxes. they are not fun, but they are a very important part of e-commerce because you need to be collecting sales tax for different orders and you'll also have taxes that you need to pay to your own government. so in this video, we are going to go over the different taxes for small businesses and how to make sure that you are staying within the law for all of that and paying on time, okay? so since we are toking about taxes, let's start out with a huge disclaimer for this video: that i am not a tax accountant. i am not a cpa. i have no certification for toking about taxes. i am just toking as an e-commerce entrepreneur and a small business owner myself, and i've been paying taxes for over 11 years for my small business. so i'm toking from my perspective here. so make sure that you still contact a tax accountant in your area and you verify everything with them to make sure that everything is set up correctly and that you are paying your taxes correctly, okay? so now that that's out of the way, i want to tok about the different types of taxes that you have to pay whenever you're doing an e-commerce store. so, first off, you do have sales tax that you need to collect, and this is going to be depending on where your location is and what country. so i'm going to have this video toking specifically about the us, so it's going to be different depending on the country that you're in or that you're selling in. however, in the us, you need to be collecting sales tax anytime you have a physical location in a state. so that could be that your office is in one state and your fulfillment center is in another state. you would need to be collecting sales tax in both of those states because you then tiknically have a physical presence in both states. you also have to do sales tax collections based off of an economic nexus, so there are different requirements for different states based on if you have so many transactions in a state or if you have a certain dollar amount that you have sold online in the state. so this can get a little bit confusing. so we'll go over the best way to do that in just a minute. but this is a newer tax thing that has been added in the last few years that you want to make sure, if you're doing a higher volume of e-commerce sales online, that you're being really mindful of. so, first off, when you're setting up charging sales tax by a physical store location. you can do this inside of the shopify backend, so you would just go to settings and then taxes and you can add in your tax location there. so you would add in your zip code, so it'll add in the correct tax information based on the state that your physical location is in. so this is an important one to make sure that you have set up so that it's just calculating taxes overall based on the physical location. but, as i mentioned before, you also need to keep in mind the economic nexus. so this is different for each individual state, which can be a little frustrating since the us has so many states to keep up with and shopify really isn't set up for going through and keeping track of all this information. plus, shopify does not file any taxes for you, it's just charging the customer and it is on you and your responsibility to make sure that you are setting aside that money for taxes and paying that correctly to each individual state. so for this i really recommend a third-party app called tax jar. so tax jar lets you actually see the economic nexus so you can see how much you are getting close to that of needing to collect sales tax in partikular states, so it'll keep track of how many transactions you've had in a state, how much revenue you've brought in in a state, so it's really helpful for keeping track of all of that information so that you don't have to have a huge spreadsheet that you're constantly updating with every new order. also, with the tax share app, they do automatikally file taxes for you once you've got that set up. so, once you have registered that you need to file sales tax in a state, you can then put all that information into tax jar and get that set up. so it's a lot easier for you, especially if you end up having to file taxes in a lot of states based on your online orders and revenue. so i definitely recommend taking a look at tax jar if you are expecting a high volume of orders and you are expecting to have more things that you're qualifying for in terms of different states that you're needing to pay taxes on. i'll put a link to it in the description below, but definitely an app to check out. so that's just the sales tax portion of it all, though you, as an individual, will have to pay taxes on any income that you have received from your business, so this is going to depend a lot based on how you have your business set up. if you are set up as a sole proprietor, so as an individual, if you are an llc, a single member, llc, an, s, corp, a, c corp- however you have set up your business entity, that really depends on how the taxes that you are having to pay are structured out. so i'm not going to get into all of that again. make sure to reach out to a tax accountant and make sure that you're paying the correct taxes for you. but overall, you need to pay taxes on any income that you have received from the business. so you can write off things like expenses, so your cost of goods, of any kind of cost of actually shipping out the or fulfilling the product itself, of the shipping cost, any marketing costs like paid advertising or if you've hired independent contractors to do designs for you, you can deduct all of those as expenses from the business account and you don't have to pay any taxes on that income. that is. there also any income that you leave inside of the business for future months of running expenses. you don't have to pay any income tax on that as well. it's just the money that you're taking out personally as profit from the business and again, that does vary really wildly based on the entity structure that you have set up for your business. so, overall, you just want to make sure that you are reaching out to a tax professional in your area and that you have everything set up. the last thing that you want is to be hit with a huge tax bill that you weren't expecting and you don't have the money set aside for that. one's gonna hurt really bad and it's going to hamper your business growth if you're then having to take additional money from the business or from your own personal accounts to pay off taxes that you hadn't prepared to pay for. so you want to just make sure that you're thinking ahead and setting aside whatever money that you're collecting for taxes- whether it be sales tax or income tax- that you're going to pay personally. so i hope this video was helpful for you in deciphering a little bit more about the different taxes that you have to pay for a small business and for e-commerce stores. we've got a couple more videos over here all about growth strategies, so how to actually grow your shopify store for 2021, and if you haven't yet subscribed to this channel, make sure to hit that subscribe button below. we post videos every week all about shopify and how to grow your online store.

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How To Charge Taxes On Your Shopify Store | Easy Method

in this video, i want to teach you how to set up your taxes settings, which is really, really easy. you're going to be able to do it very quickly. you may not even have to edit anything, because the default settings are very close to what my settings already looks like. so, to get to the taxes settings, you're going to click settings at the bottom left here, which will bring you to this page. then you're going to click taxes right here, which will bring you to the taxes settings. before you do that, however, go to your general settings and make sure you have a correct address in there. so, for example, i live in california, within the united states, so my address is california and in the united states. right, then go to your taxes settings. the reason i want you to set your address correctly is because taxes are calculated based on where you live. so i'm going to click taxes now and it's going to bring me to this page. okay, so for the most part, these are your default settings. please keep in mind that i live in the united states, so my taxes page looks like this. if you live in a different country, for example, if you live in mexico or you live in, say, somewhere in europe, then your page may look very different than mine, but for the most part, i think it should be the. the guidelines and concepts here should still apply to you, so let's take a dive in. so you got tax regions and tax calculations. the regions here are the regions for which you would tax if someone from that region came to your store and bought an item. so i'm in the us, i s, let's say, i sell t-shirts and someone else from the us comes to my store and buys one of my t-shirts because they're in the united states, they i would collect taxes when they buy that one product. you'll notike here that says the rest of the world, meaning everywhere outside of the united states, and it says not collecting. so generally, my settings do look like this. i want to point out that that for most countries, if you sell products, you're going to have to pay taxes in some form. in the us, it's very, very common for someone to buy a product online and then have taxes added to that product when they check out. the reason i don't collect taxes from people in other parts of the world is because i sell to a lot of people from all sorts of different countries and i don't know the culture for each country. i sell to some countries, you know they don't pay taxes on the products they buy, so i don't want to collect taxes from everybody, because if i, if i collect taxes from someone that's from a country where they don't generally pay taxes on products they buy online- they me- they may be very upset and i don't want to upset any of my customers. so, for the sake of not upsetting any of my customers, i simply don't collect taxes from any other countries. but i do collect taxes from people from the united states. you may be wondering: well, doesn't that mean you'll be losing money at the end of the year when i file my taxes? yes and no, although i don't collect taxes from the rest of the world, i set my prices, my profit margins, large enough and high enough so that i make such a large revenue on each product i sell that when i go to pay my taxes at the end of the year, i will have enough revenue to pay for those taxes and still make a profit. so if you're worried about how, if you're worried about making a profit and not collecting taxes, just make your price large enough to incorporate any taxes you'll have to pay back later. um to your government. okay, tax calculations. so earlier i said to make sure to set your pricing in the general settings. i'm sorry, set your address correctly in the general settings and that's because tax calculations are based off where you live. okay, so there's a couple options you can choose here. i don't, i don't check back, i don't check any of these things. the first one is: show all prices with tax included. what does that mean? this means that taxes are included in the prices when someone visits your online store. i never, ever, include the taxes in my prices because in the? u, the united states, it is not. that is not common practike generally. if you're, if you have online business and let's say, i sell t-shirts and i i sell each t-shirt for ten dollars, exactly. if someone were to come to my store and they saw the shirt for ten dollars and they put in their shopping cart and they went to go check it out and taxes were then added on top of that ten dollars, that customer would not be upset, because in the united states that is very common for taxes to be added on when you go to check out online. so it is very common in the united states to not include taxes in the visible prices of your store. taxes are always added when you check out later. uh, charge tax on shipping rates? uh, because we're drop shipping. i don't charge tax on shipping rates because you know we're drop shipping. we, we don't have to package up the product. we're not responsible for shipping. someone else is going to drop ship that product to the customer for us and we've already set profit margins and prices that incorporate that shipping. so i'm not really worried about taxing my customers for shipping rates. the less you could, the less you tax your customers, i feel, the more happy they will be, the more you know, because they're not going to get any price that's unexpected. the price that they see online will be close to the price that they'll see when they check out, and i think that's a good thing and it makes your customers happy. and then this last one you can ignore, because this is more for digital products and we're not selling digital products. so, like i mentioned, for the rest of the world, i do not collect taxes from them. so i don't. i just leave this as it is for the united states customers. i do collect taxes from united states customers. i'm going to click edit to go a little bit further, just to show you. but you don't really have to do anything in here. shopify already calculates taxes automatikally and they calculate it based on the address which you set up. in the general settings, which i mentioned a couple times already, i put, i put my address here as california and you'll see that the word the, the state california, shows up here, because this is where i live and my taxes are going to be calculated based on the fact that i live in california. if i lived in new york, which is a different state in the united states, then my taxes would be very different, because in the united states each state- california, new york, florida- they all have separate federal. they have, they all have separate, they all have separate state taxes. so in california, i guess, the state tax is 7.25 percent, um, so i just wanted to point that out, but that's pretty much it. it's very, very straightforward. you'll notike that i didn't really edit anything. if i wanted to, i could add a text for the rest of the world customers, but i'm not going to do that because, again, i don't know if it's common to tax people from every single country, because i'm i don't, i have not lived in every single country, so i don't know what the expectations are, so i'm just going to leave it as is. you could even remove taxes from the united states if you wanted to, to make your customers even happier, but i think it's pretty common in the us to pay for your taxes when you buy a product online, so i would just leave that and not worry about it. and there you go. now that you're charging taxes, at least in parts of the world, you're going to use that tax money to help pay off taxes at the end of the year and it's going to help you a lot. all right, guys, i hope that was useful. i'll see you on the next video. i almost forgot to mention another reason i'm not really worried about collecting taxes from the rest of the world is because most of my marketing channels- so, for example, my facebook advertising- they're all directed at the united states. generally, i market to united states customers. the reason i do that- and i'll get that, i'll get more to that during the marketing section- the reason i do that is because i'm f.

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Shopify Tax How and When To Collect Sales Tax [NEW FEATURES]

All, everyone Christian here- did you know in the US alone, you need to ensure that you're properly collecting taxes across 46 states and 11,000 different jurisdictions, And if you don't, you have to pass, go and go directly to prison. Okay, That last bit was a little bit extreme. but let's tok about the super sexy topic of taxes. US sales tax is very complex and it can be discouraging for a lot of you folks out there. Now Shopify in the recent months have overhauled their tax features to make things a little bit smoother for merchants, And you might have already seen a little bit of this. but now they're actually giving it a proper name and it's called Shopify Tax. So what is Shopify tax? So Shopify tax puts sales tax insights and collection in your control and makes everything manageable from your Shopify admin. So at a glance you'll know when you're liable, with a state by state overview. It also reveals where you're approaching a tax threshold, so allowing your business to actually prepare for the taxes that are going to be coming. with Shopify tax, You can also apply the right taxes at the right time, with calculations based on the buyer's precise address. There's also known as workshop accuracy. Shopify takes care of all of this in the background, so you don't have to do a whole lot of things Now. they also make sure to collect the right taxes for the right products. So adding product categories is going to be an absolutely crucial part of the process of adding new products to your store, And we'll tok a little bit more about this here in a second. Now, before we move on, I just want to say my name is Christian Keenan, one of the co-founders here at that brand, or an e-commerce growth entity that specializes in helping clothing stores grow and scale profitably online. We do have new videos every week, so make sure that you hit that Describe button- Turn on notifications so you don't miss out. Now let's tok about pricing. Nothing in live is free, right. So Shopify tax is going to be a new service that automatikally gets added to your store and you cannot really turn it off Now. for the rest of 2022, you won't have to pay anything extra that size of what you're currently paying right now for your Shopify subscription. It is going to be free forever for the first $100,000 in US sales each calendar year. after the $100,000, a point 35% fee or 4.25% fee for plus merchants will apply for subsequent orders that calculate sales tax in the US online. also, as a promotion for the next year, 2023,, the total annual Shopify tax costs will be capped at $5,000.. Now, the only bad part is that this is just for Shopify plus stores, So anyone below there won't be a cap for next year. Now another question that you might be asking is: what about outside the US? While Shopify tax is built right now exclusively to manage your US sales tax obligations, hopefully in the future they will manage international and global taxes, But right now, it just seems like they're really harping on focusing on US sales tax obligations. I believe, from what I've read, that they want to become very an all encompassing platform. So adding taxes globally and managing that will probably be something that they add sometime in the future- Not even close, but sometime in the future. Now, managing numbers and data and all this stuff can be very cumbersome. Now I want to let you in a little secret. It's not tax related, but it's all an analytiks and metrics related right. We're using a tool called trivia wealth for all of our client and group coaching members, And this tool allows us to see the lifetime value of a customer at 30,, 60, 90 days, But we're also very excited about the estimated action of customers. So just a slight little feature in there. So imagine being able to send out email campaigns or ad campaigns to customers who are actually likely to buy from you a second or third time And knowing when to exactly send out these marketing messages. after the will of super, super powerful, it centralizes all of your metrics all into one place. They simplify, inform and save you time. So make sure to check out the link in the description below. There is a slight little discount code in there for you. If you want to try this, try out triple. Well, for the first time- now we've toked about a little bit of product Categorization is going to be very important moving forward. So let's tok about product categorization. So, is a hot dog distinguish? as a society, we may never agree on the answer. I believe Erin is in the camp of it's a sandwich. I don't think it's a sandwich. What do you? what do you think? Let us know down in the comments below If a hotdog is a sandwich at Shopify, they can help you categorize your hot dog, for tax purposes at least. So they may not have that answer, but they'll be able to help you categorize that. So, for example, if you live in New York, you may find that you pay a tax when you buy a hot dog from a local stand, but not when you buy a pack when you're doing your neighborhood barbecue. So in each state different rules of the amount of tax that needs to be charged will be different on a per product basis, right, or what you use the product for. So that's where smart categorization comes in And this new feature helps you figure out these rules when you add new products to your store And really the smart categorization based on the titles and the description of the actual product that you're putting in Shopify will automatikally recommend you a product category. So once you approve or modify, then it will automatikally assign a proper tax rate based on local regulations. So if you're adding shoes and you're typing in the product title that this is a Nike Air Force, whatever, and the description it toks about being a shoe, then the product category- you will see that it will showcase it's a shoe, right, And all you have to do is just approve it or potentially modify it Right, depending on on your store and what you have currently. And if you like what you see, please consider clicking on that like button. It really help us out at all One of my YouTube videos without an actual sprint reporting, Right? So let's jump in and kind of show you around a little bit of the tax and duties section. So right now, if you go to your settings and then you go to taxes and duties, you will see this brand new banner and here it will say: stay compliant in the US with Shopify tax. and you might actually see some notikes in here. So this one says you're not charging taxes on some product variance and this one says you may have sales tax liability in four different states. So all these things you need to make sure that you're checking inside of your admin settings, taxes and duties. I'm going to click on Review US tax settings here for the new Shopify Tax And in here you'll see like there's manage a tax collection, tax rate exemptions reporting, manage your tax collection. It will actually give you, like I said, a state by state breakdown of where you're actually liable for taxes or blur some of these things in here. So you know that and then categorize your products for tax purposes. So in here you see we have 1400 products that we need to review for this store. So again, it's time consuming process and you have toward the end of this year really to kind of figure all these things out, because it will start 2023. So it's very important that you have all these things figured out Now. when you manage categories here for the products, you will see right within here It will actually show you the products and it will give you the product category, So very quickly you can actually at a glance change things around And, like I said, obviously there's a smart categorization So it will automatikally tell you what that, what it thinks that product is. All you have to do is just approve, deny or modify it. All right, So there you have a Shopify tax. They're actually making it a lot simpler for you t.

How to set up EU taxes in your Shopify store in 2022

Hi, I’m Djimi, the tik Support Lead at Sufio, and today I will show you how to set up taxes in Shopify if your store is based in the EU. If you are a Shopify store owner based in the EU, you need to know when to charge VAT and what tax rate applies to which customer. In this video, you will learn how taxes work for stores based in the EU and how to set them up in Shopify. The most important distinction for charging VAT is whether your business is VAT registered or not. Many businesses start as unregistered, especially if the taxable turnover in the last twelve months has been less than the VAT threshold of the country in which the store is based. In such a case, you would not have to register for VAT, and it means that you do not charge VAT on your sales, regardless of where your customers come from. Once your annual taxable turnover reaches this VAT threshold, you have to register for VAT and you will start charging VAT on some of your sales, depending on where your customers buy from. And then you will also have to include your VAT registration number on your invoices and receipts to make them valid. Suppose you are VAT registered When selling to customers in the same country as your store, you are required to charge VAT. If you’re selling to a different country within the EU, you have to distinguish whether you are selling to a consumer or a business. When selling directly to consumers, you should always charge VAT. However, you should tax-exempt businesses registered in other EU countries, which means not charging VAT on B2B sales outside your home country. Lastly, if your customer resides outside the EU, you do not charge VAT On such orders. you will need to report the sales VAT for taxation purposes as sales with 0% VAT. Now let’s look at what tax rate applies to which customer. When selling to customers in your home country, you should use the applicable VAT rate in your country. When selling to consumers, that is, non-VAT registered customers from other EU countries, the VAT rate you should charge depends on the type of VAT registration you have applied for. If you sell to customers in the EU and your taxable turnover during a calendar year to all other EU countries combined does not exceed the threshold of 10,000 euros excluding VAT, you may qualify for a so-called micro-business exemption. To use this taxation scheme, you need to apply for it at your local tax authority and only have a single VAT registration in the European Union. Once you apply for it, you will charge the VAT rate of the country your business is based in on all your sales within the EU. Let's illustrate this with an example. Suppose you have a business based in Germany and you received an order from a customer in Spain. Under the micro-business taxation scheme, you will charge the German VAT rate. But what if your taxable turnover outside the country your store is based in, but still within the EU, equals to or exceeds the threshold of €10,000, excluding VAT? In such a case, you will need to register for VAT in each country you are selling to and pay their VAT rate. This means that customers from different EU countries will be charged with varying VAT rates, ranging from 17% to 27%. For example, suppose you have a business based in Germany and you offer goods to consumers in Belgium and France. However, during a calendar year, you have surpassed the VAT threshold of 10,000 euros selling in Belgium. Due to this, you will have to register for VAT in both Belgium and France, and you will also have to charge Belgium VAT on goods sold in Belgium and French VAT on goods sold in France. When breaching the threshold, registering for VAT in each EU country can become time-consuming and quite complicated. For this reason, you can choose to use the One-Stop Shop Union scheme, also known as OSS. This will allow you to submit a single VAT return for all your sales within the EU whilst still retaining the ability to charge different VAT rates to EU customers, varying from country to country. Remember, these rules only apply to B2C, that is, non-VAT registered consumers only When selling to businesses with a valid VAT registration number in other EU countries, you do not charge VAT. Such customers should be set as tax-exempt in your Shopify store. Moreover, you should capture and validate their VAT registration numbers before allowing them to purchase your products. Sufio can help you capture and validate EU VAT numbers from your business customers in your Shopify store and, if applicable, set them as tax-exempt. In addition, you will be able to include the VAT numbers of your customers on your invoices so that they are valid and compliant with accounting legislation. Alright, now that we’ve looked at how taxes work in the EU, let me show you how to set them up in your Shopify store. To be able to charge VAT to some customers and not to others, Shopify allows you to choose from two possible configurations. These are based on how you want to display product prices in your online store. Let's have a look at them together. In your Shopify admin, go to the Settings → Taxes and duties page. On the bottom, in the Tax calculation section, we can find a checkbox that allows us to indicate whether our product prices include tax or not, In other words, if the product prices that we entered on the Products page include or exclude tax. Now, if this checkbox should or shouldn't be checked primarily depends on who you are selling to and what the legislation in your home country suggests. In case your sales are predominantly to B2B customers, you can most probably have your product prices as VAT excluded, so you can uncheck this option to indicate such a thing. On the other hand, if you are selling primarily to consumers or the legislation in your country requires you to display tax-inclusive product pricing, you can check this checkbox to indicate that your product prices are VAT included. However, if you're selling to both B2B and B2C customers and you want them to have the ability to be tax-exempt when applicable, make sure that the Include or exclude tax based on customer's country checkbox is checked. To do that, head over to the Markets page, click on Preferences and check the Include or exclude tax based on your customer’s country checkbox. Don't forget to save your changes. At this point your product prices should be all set. Now let's look at how you can set up your store so that you can charge your customers the correct VAT rates. Shopify calculates tax rates automatikally based on the type of registration you specify in your tax settings. Let me show you how to set it up In your Shopify admin. go to the Settings → Taxes and duties page. Here in the Countries/regions section, click on European Union and finally click the Collect VAT button. Now you’re presented with three different options for the type of VAT registration you have, As we've discussed earlier in this video. if your taxable turnover outside the country your store is based in, but still within the EU, equals to or exceeds the threshold of €10,000 excluding VAT and you applied for the One-Stop Shop taxation scheme to submit a single VAT return, choose the One-Stop Shop registration option. This will make sure that your Shopify store charges VAT at the rates of the countries you ship to. If you haven't surpassed this threshold and applied for the Micro-business exemption, select the second option to charge your domestik VAT rate on all your orders. If you hold a VAT registration in all EU countries you ship to and continue submitting VAT returns in each country separately. choose the Country-specific registration option. After that, click Next and, from the dropdown, select the country where your VAT registration is based and enter your VAT number in the field below. In case you have applied for a VAT number but don't have one yet, leave this field blank. You can update it later, when you receive it. Fina.

How to Calculate & File Sales Tax with Shopify

what's good y'all, welcome back to my channel. it's your girl starring alexis, and i'm back again with another entrepreneur video. so today, this video is for my business owners. um, i have two separate videos i'm going to do. i'm going to show you guys basically not show you guys that kind of like- tell you guys the basics of getting your sales tax and everything together, um, if you are using shopify as your um website platform, um, and then i'm gonna tell you guys basically what my experience has been with dealing with sales tax and just my horror story. so, um, i wanted to do this number one because when i first started using shopify, i told you guys, um, i didn't quite understand the taxes. that was one of the things i didn't understand at all. um, so that, and then also i have figured it out, um, and basically just figured out how to use the whole system and everything. so this may be a different process for you depending on where you live, but for texas, i'm gonna tell you guys, um, what i specifically know. so, um, we're just gonna get right into it. i guess maybe i'll screen record on my computer while i'm doing this, but yeah, we're just gonna hop right into it. i'm not sure if this is like in every state, but in texas we have a texas comptroller. um, they basically handle everything with the llc's. so basically the comptroller it's not a person, it's kind of like a- i don't know how to explain it. um, it's basically like the tax collector bookkeeper type of business for texas. like i said, i don't know if everybody's um state has this, but if you're curious, um, you can um basically just google your state and then type in: say you live alabama, alabama comptroller, or even if you do alabama sales tax permit, and it'll tell you, basically give you all the steps on how to sign up. so for texas specifically, it is comptrollertexasgov. um. so i'm going to pull that up so that you guys can see it. um, i have my laptop right here. so basically, in order to file your sales tax, you have to have a sales tax permit in the state of texas. so the first thing you're going to have to do is apply for your sales tax permit. once you're accepted, and all that stuff you're going to be responsible for filing for your business. basically, um, at the end of every quarter- so there are four quarters that you're going to make- um want to make sure that you're um filing, for. it is january, february, march. you have to file by april 15th and then the next one is going to be due june 15th, i believe, and you're gonna do for the months before that, um. then it's september 15th, the months before that, um, and then it's going to be the next uh date is going to be january 15th, um, going into the next years. you're going to go to your comptroller website and i'm a little sick, so bear with me. that's why it's taking me so long to get this video done, because i was trying to wait till i at least sounded a little bit decent, um. so i do want to let y'all know right now that shopify does not file your taxes for you. it collects them when people buy from your store, but it does not, like i said, file them for you or pay them for you. so, even if you have your sales tax on being collected, it's just data being collected. shopify collects the data, so you know how much you're gonna have to pay or how much you're gonna input when you are um doing your report, when you're reporting your sales tax, but that's literally all that they do. so, um, i am at the home page of my comptroller website, um. so at the top um, it just says different things: tax, transparent transparency, economy, all that. i'm gonna go to taxes and you guys see it says sales tax. so i clicked on sales tax um, and these websites are pretty informative. so if you just go on there, it kind of gives you a step by step what you should do um. so i'm going to scroll right down and you guys see that it says apply for sales tax permit um, and it takes um up to two to three weeks to receive your permit um, and then you just apply for the permit um. like i said, i don't know if this applies for everybody, but um, there's a e-system or web file, um website that the com trailer basically uses to have all reports and everything done. so once you get your sales tax tax permit, you're going to assign taxes to yourself. so, as you guys can see, um, mine is already down here. but um assign taxes. you put your taxpayer number um it'll pop up. you basically assign yourself the sales tax or the franchise tax. the franchise tax is for your llc um, but the sales tax is for your sales tax. basically, when that quarter comes up, you're going to log into your account um, and you're going to click file and pay um. and it's going to say you're usually going to click file original return um. of course mine is going to say there's no um returns available right now. but the return that the return period that you're currently in is going to pop up. you're going to click it. i'm just going to give you guys an example of what it looks like: um. once you click it, it's going to ask you: are you taking credit to reduce taxes on this return? um. i usually just put no um and then i did not refund any sales tax for this filing period. so i click no again um. and then here is going to ask you: what is your total sales tax? um, basically in your state. so for texas um, you're just going to put the whole dollar amount, um, and once you put that in, it's going to calculate how much in sales tax you're going to need to pay. so this is where shopify comes in. so for shopify, you're going to want to go into your account. so once you get into your store you're gonna go to your analytiks um. shopify does allow you to basically click um for the first quarter, second quarter, third floor or third quarter or fourth quarter. okay, so you're going to go to the finances section. you're going to go to total sales, um, and then you're going to go in the tight top right hand corner and you're going to click which quarter um you are looking for now. um, you can download this report, but you're going to have to go through this report and basically calculate how many um total sales you had in your state. so for me, um, i would basically calculate um all the way down, all the way down for that quarter, how many sales were made in texas, and then i would submit that whole number um into the texas total sales. once you do that, you're going to click continue. if you did not have any sales in that quarter, of course you're going to click no sales um and then you're going to scroll down, your report's going to come up, it's going to tell you how much you owe um and then you're just basically going to file that. so you're going to need to do this um four times for each quarter out of the year. that's basically um. that's basically the gist of it. now for the quarters, just to give the correct dates again, um, you're gonna your first. your first quarter is due april um, and it's for january through march um. your next quarter is due in july um, and that is from april to june. you're going to report in july. in october you're going to report for july through september and then in january of the next year you're going to report for october to december for the year that just had passed. so, yeah, that's pretty much how you're going to set up your sales tax permit and how you're going to file your sales tax um if you are using shopify as your um website provider. um. i will definitely go more in depth about my horror story with the sales taxes, but this is pretty much like a little mini walkthrough for the people who don't necessarily know how to set it up um for their llc. but you do want to make sure that you're filing them on time because they will charge you a 50 late fee- 52 late fee um if you do not file them on time. um, even if you have to pay zero dollars for the taxes, you're still gonna have to pay that fifty two dollars in order to be current um with your state. so make sure that you are doing that and if you don't, and you're not following the time. trust and believe me, they will come through their money. make sure you are ready to begin paying the moment you apply for