shopify collecting sales tax

Published on: January 31 2023 by pipiads

Collecting Sales Tax in Shopify | Out of State Requirements

[Music] foreign collecting sales tax in Shopify. this confuses a lot of people. does Shopify have a setting where you can immediately collect sales tax from your customers when they make a purchase? should I collect sales tax in every single state that I receive an order from? these are the types of questions that I will be addressing today in this video, but before I begin, I do want to throw out out a little disclaimer that I am not a public accountant and you, of course, should always consult with your own accountant to make sure that you and your business are collecting sales tax in the correct way. but in this video today, I do intend to give you a little bit of insight so that you can go into that conversation with your accountant, understanding some of the basics. so let's begin. does Shopify have a setting to immediately collect sales tax from your customers when they make a purchase? yes, should I check to see what my settings are set to because they might not be correct? yes, should I collect sales tax in my own state from day one? yes, unless you live in Delaware, New Hampshire, Montana or Oregon. should I collect sales tax from every single state, from every Shopper in all of the states, when they make orders from me. well, that depends, and let me explain why. so you, as a business owner, need to collect sales tax from customers and states where you have a tax Nexus. let me explain what that means. tax should be charged in the state you are registered in and any other state that you sell high volume to. next, this is based on number of sales and or dollar amount of sales. let me break this down further for you and then I will show you how you can check your own state requirements and requirements for other states you sell to. when you're starting out and haven't made very many sales in other states, you should only charge tax in the state that you have a physical presence in, unless you live in Montana, New Hampshire, Oregon or Delaware. if your sales are low in another state, then you have not yet qualified for tax Nexus. so that means that in your Shopify settings you should only list your own State as the state to collect sales tax in. now an important note: if you do not have a sales tax permit in a state and you charge sales tax for Shoppers in that state, you can get audited. let me repeat that if you do not have a sales tax permit in a state where you have shoppers shopping from you and you still charge sales tax to those Shoppers, you can get in trouble. you tell Shopify which states to collect sales tax in now. if you're receiving an order from someone who lives in another state than you and you do not have a presence in that state and it is your first time ever receiving an order from a person in that state, then you do not need to collect sales tax now. eventually, when you start to grow and your volume and your sales increase, you need to be on the lookout for when it is time to start collecting sales tax, and that will depend on the threshold for the state. so every state has different requirements based on certain thresholds. let's walk through an example. I live in Georgia and let's pretend that it's my first year in business. I could either be online only and shipping products to people in other states, or I could have a physical brick and mortar in the state of Georgia. this scenario applies to either situation. so let's pretend that I start to make sales to Shoppers in the state of Florida. I've only made twenty thousand dollars worth of sales in Florida. at this point, I do not need to obtain us sales tax permit in Florida yet because I have not met the threshold to need one. I have not met the tax Nexus in Florida yet, but let's fast forward four years. let's say that it is year four. I have now sold a hundred twenty thousand dollars worth of Revenue in the state of Florida and at this point I officially need to obtain my sales permit in Florida and I need to start collecting charging sales tax to Shoppers in Florida, because the threshold for Florida is one hundred thousand dollars worth of Revenue. once Nexus is achieved, you do need to start charging sales tax and you need to change your settings in Shopify to make sure that it is immediately collecting sales tax in the states that are applicable now. each state is going to have their own thresholds. let's change up the scenario. let's pretend I'm still in Georgia, but this time I am making sales in Ohio 's thresholds states that I must start collecting sales tax when I've made a hundred thousand dollars in revenue or if I have surpassed 200 transactions. in this case, if I had only collected eighty thousand dollars in revenue from Shoppers in Ohio, but I have had 200 transactions, then I need to start collecting sales tax and obtain my sales tax permit. so it is important to understand the thresholds for each state. New York, for example, has has a threshold of five hundred thousand dollars in revenue or 100 transactions. another example would be: if I have a physical brick and mortar in the state of Georgia and Florida, then I need to collect sales tax in both States, regardless of my revenue and regardless of how many transactions I've done. if you are still confused or you just want to check out which thresholds apply to you for each state, there is a website that you can use that will walk you through an assessment to determine which states you need to collect sales tax in. I will demonstrate it now and I will link to it down in the description bar as well. but once again, I just want to call out that it's really important that even after you've gone through this assessment, you should still tok to your accountant to make sure you are setting everything up correctly. okay, so what you're going to do is come to this website and you're going to scroll down until you see: take the free assessment. so I'll go ahead and click on that. from here. it's going to say that I can start my free Nexus assessment. I'll click get started first up. it's asking me where I currently collect and remit sales tax. notike that Delaware, Montana, Oregon and New Hampshire are not available choices because you would not be collecting sales tax there. so let's pretend that in this scenario I am based out of Kentucky, so I'll click that. if I was currently based out of two locations or I was already collecting sales tax in another location, I could select it. but I'm going to go ahead and click next. now it wants me to select where I make sales but don't collect sales tax. so if there are states that you sell to more frequently, you can select those. I'm actually going to go ahead and select all so we can demonstrate what that looks like. but once again, you'll just select the states that you already have purchases from. now I'm going to click next. and here it's asking me: how much do you sell in these states? so it if I were to have sold more than 250 000 dollars in total revenue in Alabama, I would select Alabama. if I were to have sold more than a hundred thousand K in total revenue or had more than 200 transactions in Alaska, I would click Alaska and I would continue on selecting all of the states if I've met that threshold. if I haven't met the threshold in any of the states, I will not select any. I will leave them all blank and I will click on get your results. now it's going to ask me to fill out my information to show me the results, and now it's showing me that I have not exceeded the annual threshold in any of the states. but I do need to watch all the states in yellow and I currently collect and remit sales tax in Kentucky and if I were to scroll down, it would show me all of the states that I'm approaching the threshold in. so remember I haven't met the threshold on these yet, but I need to keep an eye out for when I do so. this information here is very useful and and you should refer back to it because there are a lot of details about the threshold that you can read through for each state and make sure that you work with your accountant to make sure that you are doing everything correctly. [Music] [Mu.

Table of Contents About shopify collecting sales tax

Shopify sales tax setup for stress-free compliance | Walk-through guide
Taxes for Shopify Store Owners
How To Charge Taxes On Your Shopify Store | Easy Method
How to Calculate & File Sales Tax with Shopify
Shopify Tax How and When To Collect Sales Tax [NEW FEATURES]
Setup your Shopify Taxes Correctly (only 5 min!)

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

how do you charge sales tax on your shopify store, how do you pay your sales tax and all that stiky stuff coming up in today's video? hello, hello and welcome back to the channel. if you're new here and we don't know each other, you've never met me. my name is carrie, i'm the founder of shirt school and i created this channel to bring you the best strategy, secrets and hacks to grow your online t-shirt apparel or print-on-demand business, and in today's video, we're once again toking about my favorite thing in the world: taxes. if you're anything like me, taxes just give you a headache and they're just constantly frustrating and it just feels like i'm always paying taxes, so taxes really stink. but luckily, today we're going to specifically be toking about sales tax on your shopify store and i'm going to show you the easiest way that i've found to collect it and actually pay it to your state and how that all works. this is a question i get all the time like gotta be. one of the most asked questions is about sales tax and how to collect it, when to collect it and how to pay it- all that kind of stuff. so hopefully today i can bring some clarity to this question and help you out. the first thing i want you to know about sales tax is that you only pay sales tax on sales that you make inside your state. okay, that's one of the beauties that we have being an online business is that we don't just sell in our state, locally. we sell all over our country and maybe all over the world, and we don't have to pay sales tax on any sales outside of our state of residence. they call this sales tax nucleus, and so you have to pay taxes in any state in the united states where you have nucleus. now that basically means you just have to have like an office or some kind of residence there, right? so for most online businesses, especially small businesses, you're only going to have that nucleus in one state. wherever your business is located, even if you're running from your home, you're going to have to have a physical address, and so most likely for most of you, that's going to be inside your state only. to use amazon as an example, amazon has fulfillment centers and offices all around the united states, so amazon has to charge taxes in most states in the united states. that's why, even though amazon might be based in a certain place, they have, since they have facilities all over the us. they have to pay sales taxes on all the sales in those states, but luckily, since we have a small online business, you most likely only have that one location and so you're only going to pay sales tax on the sales that you make inside your state of residence. okay, the last thing i want to say- and then we'll get into the tutorial on actually how to set this all up in shopify- is that i've said it a lot and it's another question i get that's very related, and i recommend that you don't get your llc or your business licenses before you actually have some sales under your belt. right? i recommend that you get started on shopify without doing all of the the llc's and business licenses and sales tax permits. go ahead and get a few sales under your belt before you actually get your business license and you start paying your sales taxes. you want to make sure this is something that you want to continue with. so a lot of people really stress out when they're first starting and luckily you don't need to stress because you can actually claim: you know, put your under your social security number on your taxes. you can put your sales under there. you don't have to worry too much about sales tax when you're just starting out. but once you have some sales and you know that this is going to be something long-term for you and that you're going to stik with, you want to make sure you do get your llc, get your business license, get your sales tax permit and you start paying that sales tax each month. if you are just starting out, you're brand new and you're watching this video and you're like: i don't have my business license. okay, i recommend that you go ahead and set up sales tax in your shopify account so that you are collecting it. but go ahead and just set it aside. hold on to it, just in case you need to pay those sales taxes later. that's what i recommend. you don't necessarily have to do that, but even if you don't have your business license, i would just turn it on, collect it, put it aside, maybe in a separate account, so that you're not tempted to spend it, and just so you have it there in case you need to come back and pay those sales taxes. hey, if you're getting value out of this video, smash that like button and also make sure you subscribe to the channel and hit that bell icon. when you subscribe and hit the bell. you're gonna get notified each week when we put out videos. now, as much as i hate toking about taxes, i know you love hearing about it, so i plan to put out more videos related to this kind of content. so if you want to see that, make sure you subscribe back to the video. okay, jumping into shopify inside of uh test account that i have here. i want to let you know setting up sales tax in shopify is actually a very simple process. a lot of people get really scared of how to do this, and it's- it's actually pretty simple. so all that you want to do is go to your settings here and you're going to want to go to taxes right there, right, and so we have, uh, some different options here. you're welcome to look through these and see if you you want to use any of those options. what we're going to want to do here in the united states, we're going to want to go right here and hit setup. okay. now the great thing about shopify is, once you set this up, it's going to automatikally calculate all the sales tax for all the counties in your state and it's just going to do all the hard work for you. so you're going to hit this collect sales tax button and you're going to select your state of residence- and i will select oklahoma, right here- and then we're going to simply hit collect sales tax. okay, you don't have to put in your uh, your actual sales tax id. you can go ahead and start collecting it without that and put that in later, as you saw me do there. so after you've done that, that's it. that's all you have to do in shopify. so after this first step, your customer is going to have to pay the additional sales tax on any purchases that they make if they are inside of your state. this is not a big deal. if somebody, if you go down to the convenience store, you buy something, you're going to expect to pay sales tax. so here in oklahoma, for instance, if i have somebody joe down the street that buys something from my store and he's in oklahoma and i'm in oklahoma, he's going to expect to, say, pay sales tax. so once you've set this up, your store is already collecting sales tax. you don't have to do anything else on your shopify store to actually collect the money. i do want to make sure you understand that shopify will not pay your sales taxes for you. they are simply going to collect it from the customer and give it to you and it's just going to get lumped in with the revenue that you're making and you're collecting from your sales. so you're going to have to actually put it aside and not spend it, so that you have the money there to pay your sales tax. step number two: you're going to want to find where you pay sales taxes inside of your state. now, keep in mind: you only want to do this if you already have your llc, your business license and your sales tax permit. okay, you have to have that before you can do this. so make sure you get your business license, get your sales tax permit. then you're going to want to find where you pay taxes. okay, here in oklahoma, it's okay, tap. this is the website i know most of you guys aren't watching from oklahoma, but just to give you an idea of what this looks like. now, here in oklahoma, we have to remit our sales tax every single month by the 20th of the month for the previous month. so all you're going to want to do here is simply get your- uh, your account set up with whatever, whatever website for your st.

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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

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.

Setup your Shopify Taxes Correctly (only 5 min!)

taxes can seem scary, I get it, but it doesn't have to be so. let's break it down real quick. when you're selling online, you need to collect sales tax for any item that you've sold. however, each state does it a little bit differently, which just makes it super confusing. so some states you only have to collect sales tax if you have a physical location there, like if your business headquarters is there or if your Warehouse is there that you're shipping the products out. of other states it's based off of a revenue threshold of how many sales you're making for products in that state, which is called an economic Nexus, and each state also has different levels of the threshold here. just to make it even more confusing, some states you don't have to collect sales tax on different types of products, like in New Jersey, you don't have to collect sales tax on clothing or Footwear. in California, you don't have to collect sales tax on food that is consumable. it can get really confusing, but, thank, hopefully there is a better way to manage it all and make sure that you don't end up with a huge unexpected tax bill. you used to have to manage all this individually with a third-party Shopify app or just your own bookkeeping team. but thankfully there is a new feature called Shopify tax. that makes it all a lot easier and all just in your Shopify backend area. so you want to make sure that you've actually opted in for this new feature of Shopify tax, because it is free for your first hundred thousand dollars in online sales and then after that is just a small fee to management. moving forward. so you can get to this area by going to your settings and your Shopify back-end and then taxes and duties, and you can then set up there which individual states you need to be collecting sales tax for and it'll start showcasing, based off of your thresholds, of how many sales you have in each state as well. so it'll notify you when you need to start collecting sales tax in a new state and start showcasing what tax that is, make sure it's charging it to the customers, as well as showing you what that is on the back end, so you can make sure that you are saving accordingly. a key feature in getting this to work correctly is making sure that your products are categorized correctly within Shopify, and you can find this area in the taxes and Duty section as well. but this way it helps Shopify know, based off of different states that charge taxes for different types of category of products. it'll let Shopify know what type of category your product is in and make sure it is charging the appropriate sales tax or not charging sales tax based off that. so you want to make sure that you go in and make sure all of your products are categorized correctly. so, just to make this even more confusing, this is just sales tax that I'm toking about right now. this is not income tax, which each state charges individually, or each country charges individually as well, and you'll have a federal income tax. so this is where it gets even more confusing and, honestly, I'm not an accountant, I'm just a web designer. so I highly recommend that you reach out to an accountant and get all this set up, because you do need to be paying an income tax for the state or federal level that you are in to make sure that you're paying taxes off the money that you've made from your business- again, not an accountant. so make sure you hire someone that can help you with all of this and and set everything up correctly from the very beginning- a book that I have found really helpful, and just setting up your business correctly is profit first. it really helps me understand kind of just how I need to set up different systems in my business, as well as how much money I need to save for operating expenses, taxes, all those things and, of course, paying myself as well. so I highly recommend this book if you're interested in more kind of business fundamentals behind the scenes information, and I'll put a link to it in the description below as well. I'll be honest, I actually made a huge mistake and did not set aside enough taxes in the first year of my business and it was a pretty uh bill. so do not make the same mistake. and if you want to see more lessons that I've learned along my entrepreneurship Journey over the last 12 years, then check out this video over here. I've got more tips and things that I recommend you doing and not doing as well to help you along the way.