Post by sinthiya007 on Nov 4, 2024 16:41:05 GMT 7
From the second part of the article, you probably already know that marketplaces make life much easier for online sellers working remotely in the US market. Amazon, eBay, Walmart, Etsy and similar platforms not only pay Sales Tax for sellers, but also do much more routine work - calculate its value.
What should sellers do who sell in the US using Shopify or their own website? Today we will look into this issue. Let me remind you that we are considering the situation when the seller is not physically located in the US.
For Shopify merchants, the Sales Tax situation on page seo service became more acute in 2018, when the US Supreme Court issued its verdict in the Wayfair vs. South Dakota case, which we wrote about in Part 1.
Does Shopify pay Sales Tax for its merchants?
No, Shopify does not pay sales tax on behalf of the merchants who operate on its platform. Almost all states that have Sales Tax have now passed marketplace laws designed to make it easier for merchants and governments to collect and remit sales tax.
In states that have passed these laws, marketplace operators like Amazon and eBay are required to collect and remit sales tax on behalf of their sellers who have an economic nexus there. But…
Shopify is not a reseller. You will need to set up your Shopify store to collect sales tax yourself, and the platform will not manage the sales tax remittance process for you.
Where to start? How should sellers act regarding Sales Tax?
Action Algorithm for Shopify Platform Sellers
You will have to follow the same sequence as described in the previous part for Amazon entrepreneurs.
Determine the presence of relationships
Like Amazon, Shopify sellers may also have two types of relationships with their state when it comes to sales tax. Those who are not yet on the platform may not know that Shopify launched its Shopify Fulfillment network in June 2019.
The Shopify Fulfillment Network is similar to Amazon's FBA service, which outsources order fulfillment and inventory storage. Currently, these centers operate in California, Georgia, Nevada, New Jersey, Ohio, Pennsylvania, and Texas. And working with them will create an inventory nexus and you will need to pay Sales Tax in these states.
Another type of nexus is the economic nexus, which occurs when you sell more of a product in a given state than the threshold set for that state. For example, some have a threshold of $100,000 per year OR 200 transactions, whichever comes first. But the thresholds vary from state to state.
For convenience, we will repeat the table with threshold values from the first part of the article, but keep in mind that it is relevant as of the date of publication of the material. Not very often, but states review their threshold values and make adjustments.
What should sellers do who sell in the US using Shopify or their own website? Today we will look into this issue. Let me remind you that we are considering the situation when the seller is not physically located in the US.
For Shopify merchants, the Sales Tax situation on page seo service became more acute in 2018, when the US Supreme Court issued its verdict in the Wayfair vs. South Dakota case, which we wrote about in Part 1.
Does Shopify pay Sales Tax for its merchants?
No, Shopify does not pay sales tax on behalf of the merchants who operate on its platform. Almost all states that have Sales Tax have now passed marketplace laws designed to make it easier for merchants and governments to collect and remit sales tax.
In states that have passed these laws, marketplace operators like Amazon and eBay are required to collect and remit sales tax on behalf of their sellers who have an economic nexus there. But…
Shopify is not a reseller. You will need to set up your Shopify store to collect sales tax yourself, and the platform will not manage the sales tax remittance process for you.
Where to start? How should sellers act regarding Sales Tax?
Action Algorithm for Shopify Platform Sellers
You will have to follow the same sequence as described in the previous part for Amazon entrepreneurs.
Determine the presence of relationships
Like Amazon, Shopify sellers may also have two types of relationships with their state when it comes to sales tax. Those who are not yet on the platform may not know that Shopify launched its Shopify Fulfillment network in June 2019.
The Shopify Fulfillment Network is similar to Amazon's FBA service, which outsources order fulfillment and inventory storage. Currently, these centers operate in California, Georgia, Nevada, New Jersey, Ohio, Pennsylvania, and Texas. And working with them will create an inventory nexus and you will need to pay Sales Tax in these states.
Another type of nexus is the economic nexus, which occurs when you sell more of a product in a given state than the threshold set for that state. For example, some have a threshold of $100,000 per year OR 200 transactions, whichever comes first. But the thresholds vary from state to state.
For convenience, we will repeat the table with threshold values from the first part of the article, but keep in mind that it is relevant as of the date of publication of the material. Not very often, but states review their threshold values and make adjustments.
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