Getting your sales tax setup in Shopify is easy but there are some things to know. You first need to determine which states you are legally required to collect and remit sales tax to. Once you have a list of those States you can simply enable them from within your Shopify Admin > Settings > Taxes.
1. Which countries do you collect Sales Tax from your customers during checkout?
2. In the USA, which States do you collect Sales Tax?
Shopify automatically calculates Sales Tax on the State level, and they use a live database to determine State, County, and City tax based on the customer's Shipping Address.
It is important to know that tax regions will only show up for zones created in your Shipping Profiles. Meaning if you do not ship to a location then you cannot collect sales tax for a location you do not ship. To add a zone to your shipping settings so the tax settings will appear, check out our blog on how to setup Shopify shipping profiles.
- Login to your Shopify admin and go to Settings > Taxes
- Next to the region that you want to enable tax e.g. United States > Click Manage/Setup.
- You can select Calculate taxes automaticially if you want Shopify to dyncmicially use a live database to calculate the State, County, and City tax for the customers shipping address. If you want to manually add in your own rates then un-tick that option.
- You will see an area to add the State Name that you want to enable and a local zip code to the State (typicially if you have a location in the State you will add your Zip Code).
- Click "Add State" and then proceed to the next State you want to collect for.
Once you add all the States required then Shopify will handle the rest automatically. You can run reports when it's time for you to file with the State and you'll be able to see each state and the totals you collected.