The biggest US sales tax mistakes new Shopify sellers make
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- Опубликовано: 4 авг 2024
- Are you a new Shopify seller? Does the thought of keeping up with sales taxes make you want to run away and hire? No worries. I'll break down the biggest mistakes new Shopify sellers make with US sales taxes and even explain sales taxes to you at the end of this video.
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Finally! Someone that really explains things
Thank you. I try very hard to explain things in a short and concise manner.
Thank you!🙏
This has been one of the best video explanations for new store owners! AKA- me!!
Glad it was helpful, Lynda.
Nice. This is really what I need to know. Thank you so much.
Glad it was helpful!
That was very informative. Thank you for sharing.
Glad it was helpful!
Very helpful, thank you
You're welcome.
Hi, just letting you know, that was extremely helpful and informative!
Glad it was helpful!
thanks for the info
You're welcome.
thank you very much
You are welcome.
Nice topics
Thanks
This is very helpful and provides great clarity! thank you Veronica. I did have 2 quick questions
1) If you have physical presence in a state (aka where you live or where your business is registered) you automatically have to register, collect and remit sales tax correct? Or the minimum treshold would still apply?
2) How could we download that Economic Nexus Treshhold for Sales Tax excel summary?
thanks,
Stefan
Hi Stephan. Minimum threshold rules only apply when evaluating economic nexus and not physical nexus.
I provided a link to salestaxandmore.com to download their economic nexus threshold summary in the description.
thanks for very valuable video. As you said clothing is tax free in all states, so its same for dropshipping clothe or reseller certificate is required as my address is based in Virginia. TIA
I said that clothing is not subject to sales tax in some states (not all states). I am not familiar with Virginia sales tax rules. Reach out to salestaxandmore.com for information. They specialize in sales taxes.
@@5MinuteBookkeeping actually, at 4:41 mark on the video, you do state that clothing is not taxable in every state. Just an FYI
The video was amazing. Really helpful. If the person starts collecting taxes before registering. What can he do?
Hi Evandro. Technically, the moneys are owed to the state. But, you need to consider the amount collected - perhaps it's not a big enough amount to worry about it. It's best to get a professional opinion from a sales tax expert such as salestaxandmore.com. They are my go-to sales tax experts.
Hi Veronica! Thank you for the informative video. I have a question, once you have reached the economic nexus threshold in a specific state, are you responsible from your previous sales taxes in that state before reaching the threshold or you should only collect sales taxes for your future sales in that state after you have reached the economic nexus threshold (number of units or dollar amount) ? Thank you!
Normally, you should collect sales taxes after you have registered in that state. It's best to check with the state just to make sure.
@@5MinuteBookkeeping I understand that part. I have a question about collecting taxes, I read the all tax info and all 50 states in US, I am in Florida and I know I have a physical nexus here, and I know the thresholds of the other states (i.e. 200 units or $100,000 sales etc..) My question is if I collect taxes for every state just in case so that if I reach their economic nexus in the future and if I don't reach, what do I do with the taxes I already collected, do I keep it as a part of my sales revenue? Or if I don't collect at all and once I reach the threshold then do I have to pay this taxes to those states out of my own pocket since I didn't collected them in the past? Thank you.
@@5MinuteBookkeeping Actually to make it clear, am I only responsible for collecting FUTURE sales once I reach the economical threshold for that state (units or dollar amount), and not responsible for the PAST sales taxes before reaching the threshold, since I won't be collecting sales taxes without reaching the threshold. Because in the video, you said that we can only start collecting taxes after we registered with that state. Thank you very much!
Thank you for this, very informative! Could you please help me with one question? I am from Europe and I am dropshipping to the U.S. My supplier has a warehouse in California, and they ship out the products (necklaces) to my customers from there. Is this considered a physical nexus for me? Do I need to pay sales tax for every state?
Hi Stephen. It would be best if you contact a sales tax expert so that they can make the proper assessment for you. I highly recommend salestaxandmore.com.
Thank you for this. To clarify, if i had a physical presence in VA, do i have to register to collect and remit sales tax for my state from the very beginning of my dropshippimg business? and my second question is if my supplier is in China do i have to worry about any sales tax from abroad like China?
The rules vary by state but typically you do register to collect sales taxes in states where you have a physical presence from the very beginning.
I am not familiar with international sales/VAT taxes.
Hi Veronica
So am I correct in concluding that if I have not reached the nexus threshold in a state (and there does not appear to be any state in the US that has a threshold lower than $100,000 in a year), I do not have to collect any sales tax?
For economic nexus, you do not have to register for sales taxes until you meet the threshold in a state.
So am i correct that if you don’t meet the nexus, you don’t collect or remit in that state? Or, do you still collect and remit to the state you have physical nexus in?
You have to collect and remit sales taxes for states in which you have physical nexus. You don't collect or remit sales taxes if you don't have economic nexus.
Hello, once nexus is established in a state, we need to open up a tax permit? are you available to help open tax permits for my business in select states?
Hi Sanjay. I do not provide sales tax registration services. I highly recommend salestaxandmore.com
Good morning thanks for the information but I’m I still have a question about the taxes. Is it best if I the taxes to the products and the customer pays for them. Are should I pay for them ?
In the US, when you sell a taxable product, you collect the sales taxes from your customer. Then you remit the sales taxes to the tax entity (such as the State).
Regarding having economic nexus, does this mean that you wouldn't have to suddenly collect sales tax on purchases made before reaching the threshold (let's say 200 transactions in a certain state?). So you would start collecting sales tax only on the 201st transaction and every one after that (for that specific state)?
You would be required to register to collect sales taxes after you reach the threshold. Then you would be required to start collecting sales taxes after you register. A sales tax expert should advise you as to whether there is a significant liability for sales taxes prior to registering to collect sales taxes.
@@5MinuteBookkeeping Thanks for the response! 👍
@@jasonc191 This only applies yearly threshold correct? if next year I did not hit the nexus on that state I don't need to collect anymore?
Can you help me? I have had my Shopify store for over a year and just realized that it wasn’t automatically collecting sales tax. 🥺 What do I do? And why can I not figure out how to add sales tax for NC?
Reach out to salestaxandmore.com. They are experts in sales taxes and can help you determine if you have "nexus" in other states. They can also help you set up your sales taxes.
Quick question. Does this also apply for international transactions? I’m in the process of setting up my shopify store and plan on marketing to a certain demographic in and outside of the US.
I am not familiar with taxation for international transactions.
State of Kentucky. I requested our sales tax ID number before we ever made a sale. We set up to collect sales taxes and pay into the state. So then what happens.
I can't answer you specifically since you haven't provided enough details. If you have specific questions about your sales tax situation, I highly recommend reaching out to salestaxandmore.com. They specialize in sales taxes.
My daughter's business didn't file for a sales tax permit until after she was collecting taxes. How can we fix it?
You should contact a sale tax expert for help such as salestaxandmore.com
So is there a threshold in Colorado and if so what is it???? Please answer
Take a look at the chart provided by salestaxandmore.com. I linked it in the description. You'll see the thresholds for all states on that chart.
Do you also have to worry about “use tax” for the states you don’t meet thresholds in but sell to
The rules are different in each state. I am not a sales tax expert but I highly recommend salestaxandmore.com
Where can I find that Nexus chart?
Go to salestaxandmore.com and look for their resources.
I Noticed that my Shopify sales tax is broken down into local city taxes and district taxes, etc, do I remit them all as one to the state tax authority in my case in California is the CDTFA or do I track and remit those individual city and county taxes separately myself to their respective jurisdictions?
Hi. I am not familiar with how California sales taxes are filed. If it is like Texas, sales taxes are filed directly with the State Comptroller's office. You should work with a sales tax expert if you're not familiar with sales tax rules. I recommend salestaxandmore.com
@@5MinuteBookkeeping Thanks
Hello, where do I see the minimum threshold? Is shipping from home count as a physical presence ? Haha
Go to salestaxandmore.com and look for their resources. You'll find a list by state.
Tax jar
TaxJar is a good tool for doing your own sales tax filings.
So we register and initiate sales tax collection only after reaching the nexus, correct? If that's the case, upon reaching the nexus level, are we obligated to pay sales tax on the entire amount of sales up to that point? For instance, if I achieve $100k in sales in Arizona, does the state expect taxes on that entire $100k, or does taxation begin from that day onward for all new sales?
Thank you! Love the channel, and subscribed! 😀
Generally, no, since you didn't reach the threshold. It's always best to work with a sales tax expert to ensure that you're staying in compliance. I recommend salestaxandmore.com