Setting up US taxes

If you're new to Shopify, then before you start selling, you need to determine whether you should charge sales tax. You might need to register with various tax agencies. After that, you can set up your taxes in Shopify to help ensure that you charge the correct rates wherever you sell in the United States.

Before you begin

Before you add tax registrations in your admin atSettings>Taxes and duties, review the following considerations.

Determine whether you need to charge sales tax

You need to determine whether you should charge sales tax. If you're not sure, then consult with a US state tax authorities or a tax professional.

For a summary of state tax rules, refer toUS taxes reference.

Register with your tax agencies

If you need to charge sales tax in one or more US jurisdictions, then you need to contact each of the relevant agencies and register with them. The process varies depending on where your business is based and where you sell, and on the individual government requirements.

For links to various US tax agencies, refer toState tax reference.

Manage your locations

To ensure that your tax rates are correct,create a locationfor your business if your inventory is fulfilled from a location that's different from the address you have set in your Shopify admin atSettings>Store details.

Set up the regions in which you're registered

After you've registered with the tax agencies and have yoursales tax ID, you can set up your taxes.

Steps:

1. In your Shopify admin, go toSettings>Taxes and duties.
2. In theManage sales tax collectionsection, clickUnited States.
3. In theRegions you're collecting insection, clickCollect sales tax.
4. Select a state or region in which you are registered.
5. InSales tax ID, enter your sales tax ID. If you have applied for a sales tax ID but don't yet have one, then leave this field blank. You can update it when you receive your sales tax ID.
6. Optional: If your business is located in a state where tax laws regarding shipping vary, then you canchoose whether you want to charge tax on shipping.
   1. ClickAdvanced options.
   2. UnderShipping tax, choose whether you want to apply shipping tax.
7. ClickCollect sales tax.
8. Optional: Add more regions and account numbers by clickingCollect sales tax.

Advanced options

Some states have laws that affect whether shipping is taxable. If you're registered to charge tax inCalifornia,Colorado,Florida,Illinois,Louisiana,Maine, orMaryland, then you can choose one of the following options:

• When applicable (default)- Whether the tax collected is determined automatically. If the state doesn't collect tax on shipping but does collect tax on shipping and handling, then tax is collected only ifhandling feesare added to the cost of shipping.
• Always- Tax is always charged on shipping.
• Never- Tax is never charged on shipping.

If you're not sure whether you should charge taxes on shipping, then leave this option on the default setting and check with US state tax authorities or a local tax professional.

Next steps

You cancreate tax overridesfor products where the default tax rates don't apply, or shipping rates for specific states.