As we approach the often dreaded tax season, we want to show you how Shopify has simplified this process with Shopify Tax. Fyresite has broken down everything you need to know to take advantage of this great Shopify perk, during tax season and all year long.

What is Shopify Tax?

Shopify Tax is Shopify’s fulfillment of their promise to merchants of offering complete eCommerce services. This great feature offers many advantages to merchants, including ease during the often dreaded tax filing season.

Sales Tax Insight

This tax platform by Shopify gives you insight into your tax liability. You can see where you’re liable and where you’re approaching tax thresholds, allowing you to plan your business with no surprises.

Tax Rates with Rooftop Precision

Rooftop precision means that the taxes collected are accurate down to the precise address of the customer. And that’s exactly what Shopify offers you with their tax platform. Every order will collect the exact taxes based on customer location.

Product Tax Categorization

Different types of products fall into different categories and collect a different percentage of sales tax. That’s why it’s incredibly important that all products are properly categorized, and collect the right percentage of tax.

Using Shopify Tax helps you by suggesting the correct categorization for your products, so the correct tax(es) are collected on the products.

Enhanced Sales Tax Reports

With this tax platform, you can view your sales and tax reports from the county, state, and local jurisdictions. With these reports, you can make filing taxes a breeze and gives you the security of having the proper data.

Consistent Updates

Shopify Tax keeps up to date with all the different tax rates throughout the US. When there is a big tax update, Shopify informs you so you can stay in the loop, and even gives guidance if needed.

Who Can Use Shopify Tax?

Shopify’s Tax platform is available to all Shopify merchants in the US, regardless of their Shopify Plan.

While it is currently only available to US merchants, it may be expanded to include other countries in the future.

Why Does Collecting Taxes Properly Matter?

Prior to 2018, small businesses only had to collect sales tax in the state(s) where they physically were, regardless of where they virtually sold their products.

But that was then. Since 2018, merchants need to collect the relevant sales tax wherever their product is sold. Since sales taxes are collected in 46 states and over 13,000 sales and use tax jurisdictions, this can get tricky.

With Shopify Tax, this is much easier. It simplifies this process and helps keep merchants tax compliant. Being out of compliance with taxes can get a business into legal and financial trouble.

How Much Does This Feature Cost?

Shopify Tax itself is free, and embedded right into the Shopify Admin. Fees are not collected until after the first $100,000.

After the $100,000 ceiling has been passed, you will be charged a .35% rate (or a .25% rate for Shopify Plus merchants!) for every purchase made in a state that you collect tax. This means that the total cost is dependent on how much you sell.

Want Shopify?

If you’re interested in using Shopify as your eCommerce platform, reach out to Fyresite today to get started, or use our affiliate link to try it yourself!