I think there are two separate kinds of nexus. Physical nexus, meaning you have a physical presence within that state and Economic nexus. Economic nexus is when you are required to collect and pay after you have hit a certain threshold of sales. Not sure about the details on economic. Also you don’t need to have a LLC to register for sales tax. You can do this as a sole proprietor as well.
I was so shook after watching a couple of videos and I was like OK I can’t do this but I have to watch your video you made it so simple thank you so much
im not the kinde guy that posts comments but this is somethink else. i was frustrated whan it came to taxes as a beginner i looked through a lot of videos but i got more confused until i found your video which was so clear and easy to understand. thank you so much
Your video was extremely informative, thank you. Some updates in Florida: It is required as of July 1st 2021 to collect sales tax although you are only selling online. Also, TaxJar requires a subscription to autofile ($20 a month) plus it is $30 more per auto file.
I opened and LLC first to start my small business and now I'm going to start my shopify store and I'm nervous. This is the clearest explanation I have heard on where to collect taxes. Thank you!!!
😂😂damn. I've roamed all around watching those bunch of sales tax videos couldn't helped me. Why no one could explain as simple as that! Your video made me stress less ❤❤❤thanks alot! 👍
I been doing a lot of research in this topic but from my understanding is if you reside in one state and you sell your product in another state your considered to have an entity in that state there for you have to pay sales tax for that state as well so this is where I’m confused in , you provide great transparency in your video , but I’m still confused on this aspect please clarify if you can
You pay sales tax on sales made inside your state. No sales tax on sales made outside your state unless you have an office in that state. There are a few exceptions, but this is the case for the vast majority of small businesses.
@@KerryEgeler Hey I have another question so my supplier that I use is located in New York and I’m located in Texas but every time that I make a transaction through his store for me to drop ship they charge me A percentage in Sales Tax When we’re shipping to different states , But as you said I can only charge sales tax With transactions in my state So I don’t charge any sales tax out of state, How does that work?
So I have a question. Do I charge the customer sales tax in other states where i am not paying sales tax to that state? I’m operating out of California so obviously I’d collect sales tax for anything sold in California but what about the other states?
Asking to know for sure... I run my business in Texas. I've sold and shipped items to customers in WA and they were not charged sales tax. Is this normal? No states outside of Texas will be charged tax?
Great video! Quick question, how do I know I’m properly charging sales texts for customers outside of my home state? I’ve had a few orders from customers where they should have had to pay sales tax and didn’t…I just don’t see anywhere on Shopify where you can select to charge all US states (if applicable). Thanks in advance!
You only need to be concerned with this if you are selling a significant amount outside of your state. Generally speaking, you don’t need to worry about sales tax outside your state unless you have let’s say $10k/month+ in another state. States have different thresholds for requiring sales tax.
If you use a POD like Printify, that has print providers all over the country, they actually charge you tax for all your orders. That means even though you only owe tax in one state, your customers all over the country has to pay it (or you pay it on their behalf) directly to Pintify. It sucks, but that appears to now be the way it works at least with them.
This was super helpful!! This whole time Im thinking sales tax and state taxes are the same thing. Would you be able to make a video on how to file your sales tax in your state and how.
I have been holding out on my website launch due to the tax issue and not understanding how it works in Shopify. After watching several videos, yours was what I needed for completion of the task at hand. My only question is that Shopify has changed the format within the tax section. The items that you featured as not the same as I have available. I was not sure if you have update this tutorial since you initially posted? I look forward to hearing from you. Thank you again! Really great work!
If you're looking for a print on demand provider that would be shipping closer to your customers, Gelato is a great option. They have numerous locations globally, and therefore faster shipping time.
3:38 It is against the law to collect sales tax "just in case" - you MUST hold a seller's permit for the state you are collecting sales tax in, files sales and use tax returns, and remit that sales tax. Do not follow this advise - completely incorrect and harmful to viewers.
Aside from physical location economic nexus should be considered as well and if you have remote employees you might have nexus as well. I would not recommend to collect sales tax before you have permits from state to do so.
Kerry, that was a life saver of a video 💙 Just one question as I am planning on launching my Shopify store from overseas (Europe). Is there some automated way to determine whether I have an economic nexus already established with some state? Or I should set up all the states from day one with tax jar on board? Or am I simply overthinking? 😜 Thx for response 😉
Hi Kerry, thanks for the useful video. There's a section in the settings now where you need to categorize your products, which seems super important, since each product category has a different percentage. Have you covered this in a different video?
Please explain how to calculate taxes on shopify page if customers buy stuff from another countries instead and not only in one as a business owner who lives in one home country?
thanks for the great information. I am based in Norway and starting a POD business. My suppliers will be from China, Usa etc. I will be using printify. I want to just target the US market. I will be paying income tax from my store. but what about sales tax? and how should I go about it?
Hey, Kerry! Great content as usual. Greetings from Egypt! What about the economic nexus? Which means that even if you are not a resident or having some sort of physical nexus in the US, you'd be still charged tax. For example, if you're using Printful as your dropshipper, they HAVE TO collect taxes as they have nexus in the US. Eventually, they might collect it and deduct it among their costs I guess. This is what I got of various vids about this topic. Hopefully you correct me if I'm wrong. Stay safe, awesome and productive!
Great informative video, thank you! I'm still unclear on other states sales tax though...I'm based in AZ so I would set up my state sales tax collection and remittance here. But if I sell to other states, do I not need to collect sales tax at all since I don't have a physical presence there or only when I reach each state's threshold of sales/income?
Correct, Shopify will automatically collect sales tax on sales within your state. Check local laws in your state, but generally will not need to collect sales taxes in other states until you reach their threshold.
Thank you so much for this video. Just wanted to know. I registered my business because I thought I needed to right away. And Im goin to have to pay 3 months before I’m anticipating to launch. What happens if I haven’t started my business before the time needed to pay back?
Exactly i dont have ny business permit i was worried about taxed thank you for explaining exactly same idea start first when we earn and love to continue thats the moment to start the permit process
Correct me if I’m wrong, but when running a Shopify print on demand store, are you paying taxes twice on one product? Once when the product is purchased from Printful or Printify, and again when it is sold to the customer shopping in my Shopify store, since we have to collect tax for the irs as well as pay it since we are middlemen right? Sales tax is 7.84% in my state, so if this is right then I could be looking at a total of 15.68% sales tax total for my state for each product I sell. I’m trying to figure out how to price my products, and this thought crossed my mind.
Question, Shopify changed the UI on the site a lot from the example you have here. By default, the automatically selects Shopify Tax, which has a fee, would we be able to select either Basic Tax or Manual Tax? Seems like a bad idea to have Shopify Tax that has a fee and TaxJar which also has a fee, so we would be charged twice. So trying to figure out this new setup.
Shopify tax is free under $100k of sales. Shopify tax does not file your taxes for you, it simply generates a report for you (which does help). The reason you would consider TaxJar is for one reason - AUTOFILE. The filing process is probably my least favorite thing to do as an entrepreneur of all time. I would pay 10x what Taxjar charges to not have to manually file my sales taxes. TaxJar automatically does your sales tax for you through their autofile feature. It’s incredibly helpful.
You have the best videos. Thank you. I live and I am incorporated in the state of Montana. Montana does not have sales tax, but I sell to people on shopify in other states. I think I understand you are saying no, I only charge sales tax for the state I live in. So if MT has no sales tax, then I don't charge sales tax to anyone?
3:38 It is against the law to collect sales tax "just in case" - you MUST hold a seller's permit for the state you are collecting sales tax in, files sales and use tax returns, and remit that sales tax. Do not follow this advise - completely incorrect and harmful to viewers.
Okay so I’m based in PA. If someone from say New York or Florida buys something they don’t pay any tax on the product but people from PA will pay tax? I used big cartel before shopify and on every product I just put the clothing tax code and everyone would pay taxes regardless the state besides states like Jersey who don’t pay tax on clothing. Let me know thanks!!
Thank you so much! I'm just starting and have a huge migraine trying to figure out the tax thing and with you saying I don't have to worry about it right now because I don't have my LLC due to not having money and don't know if it's worth it I can breathe and open my shop.
Do I still collect sales tax if I just plan on selling under my ssn and not get a LLC ? And what happens if I don’t collect sales tax ? How do I pay the sales tax that I collected if I operate my business under my ssn and don’t plan to get a LLC ?
Great video my friend. I have a quick question. Does Shopify have a setting that it doesn’t show that I’m collecting taxes yet it will collected on the back end and put it on that jar app that you mentioned? Example my shirt is priced at $25 and I want to includ the sales tax on that price but I don’t want my customers to see it. Thanks
Hey question because I’m so confused and been trying so hard to understand. Your video helps a lot but my question is let’s just say we are using your account to sell stuff. You only turned on sales tax for your state of Oklahoma but what if something sells in South Carolina? You only turned on sales tax for Oklahoma so do you have to turn it on for South Carolina since you sold it there? Or is it only turned on for the state where you are physically located?
Well when your adding your EIN to Shopify it asks how the business is registered and if that's not correct because you told someone to create and LLC after they can't make sales.
Do I have to pay sale taxes if I sell little? I dont have an llc i just have my EIN. When will it be good to get an llc license? After selling a lot? I hope you can answer thanks
If you’re selling a very small amount, I probably wouldn’t worry about it right away. But don’t take this as professional advice, you might want to talk to a CPA.
I wanted to do what you say about Not to collect taxes at the beginning, but shopify reported me that I needed to do it, and checking the NY state law, they say that even sole proprietorship Must register for tax collect and register the business before starting. So, I had to do it before opening the online store.
My business c corporation is in Wyoming but I live in Florida. Do I correct for both of those states and pay both states?? I was in affiliate marketing only before but looking to start print on demand
Thanks so much for explaining. Question: at 3:46 you mentioned prior to registering an LLC/license/tax permit etc., to still proceed with setting up sales tax in Shopify so you’re collecting it, and just set it aside in case you have to come back and pay those taxes once biz is set up. But the US sales tax page in Shopify (shown at 5:08) reads “If you have a nexus, you can start collecting taxes once you’re registered with the appropriate tax authority”. So does this mean that even if you add your state (with nexus) now, tax wont be collected until registering with the appropriate tax authority? Or does it just say that, and will still allow you to collect tax prior to registering with the state? Thanks again!
I still don't get it. So do I only choose my state when collecting tax? What about they are from different state purchasing to my website? Do they still get charge for the tax?
so do i have to set up it for each state? you said that people in oklahoma would only be charged sales tax... so does that mean if you only set up oklahoma people in californa wont get charged sales tax?
Does taxjar deal with sales taxes and income taxes? Thanks 😁 Most helpful video I’ve seen on taxes! Edit: is there a better substitute for taxjar since after looking through reviews their service seems to be terrible now then it was before… thanks.
If you don’t use an app, you can do it manually. When I was doing it manually, it would take me 3-4 hours on average in one sitting to process my sales taxes each month. This could be quicker depending on how good the system is in your state. Oklahoma stinks.
If you run multiple shopify stores in the USA, do you know if these stores combined have to pay sales tax in other states when they all hit the threshold of sales in a state? or is it by each store hitting the threshold individually? thank you
I have a Shopify store and I’m having trouble to setting up tax for my state. I’m not seeing Texas in the drop down box where it shows the difference state options. What can I do?
If someone that does not live inside my state, they don’t need to pay sales tax? I looked back on some previous invoices for people out of state and it did not charge tax on their purchases.
Did you say that if i live in NY and i sell my sculptures in another state ... that sales tax is not included in other states .... saving that money.. is that right.
@@KerryEgeler THANKS, are you familiar with ECWID... it is another selling sight.. They have a free plan but it does not come with TAXES CALCULATED automatically... only the paid plans on ECWID... it seems like their free plan is a little inadequet if it does not help with taxes calculated automatically.. I cant imagine selling in a STATE where taxes are not going to be charged.
Hi Kerry, What happens if you are a remote merchant? I live in The Netherlands but want to sell supplements to the US. The supplements are a POD company in the US. Will I need to pay sales a tax?
What about someone who is using Printify? They charge taxes when they print your orders. You're taxed on the production cost. You can only get exemption from your state you have nexus in. But that means I'm paying taxes in all other states out of my pocket. Should I be registering in all states so I can be exempt? But then I'd be required to pay taxes in all those states. Or should I just collect from all states from my customers in Shopify so that cost is covered? Or does that mean the IRS knows I'm collecting and even if I don't have nexus I have to submit the sales tax to each state?
You need to obtain a sales tax license from whatever state you are based in. You can submit this to printify to avoid paying sales taxes on your cost of goods with printify.
@@KerryEgeler Yes, I have that already. But Printify is charging me tax in all other states. There is no way around this, right? I know there is some kind of multi-state exemption that is for a handful of states, that can use my CA sales tax exemption. But if I submit that to Printify, does this mean I have to charge my customers sales tax and submit it to all those other states as well? Or would I only need to charge and pay those states if I meet their threshold?
This does not relate to taxes .. But... How can one build a store ...and still... Capitalize on seasonal trends at the same time.... Need Help... Very confused on how i could/possible to do both..??
@@KerryEgeler doing p.o.d. model is it viable to go in a life style band format like you would in a brick and motor.. Or does that strategy not work well for p.o.d.?
Hi Kerry, I don't fully understand something. You say we only pay taxes in the state where our business is registered. But what about sales taxes collected and sold in other states? Don't we have to pay these taxes in other states as well?
No, you don’t. Unless you have a business location in those states or if your specific state says otherwise. (Double check your state) the only other time is if you sell more than something like 100k/year in a state outside of your own state. …..not financial advice 🤓
3:38 It is against the law to collect sales tax "just in case" - you MUST hold a seller's permit for the state you are collecting sales tax in, files sales and use tax returns, and remit that sales tax. Do not follow this advise - completely incorrect and harmful to viewers.
Very clear video! Thank you. Quick question, I looked at purchases made on my website from other states and the customer is not being charged tax to purchase, but customers in my state are. Does this fall under the Nexus? If I go to purchase something online on shopify from someone I know does not live in my state, I always pay sales tax. Or is tax charged at a later time?
did he ever got back to you?, because i also have the exact same question! i went into the "preview and if the address is from a different state from where im selling it does not charges them tax? wondering if i moved something or is the system is like that. any help will be greatly appreciated
I thought you had to pay sales tax not just in your state- some states collect the rate from where there items ship from and some collect by the destination. Hoping he responds to this soon!
How would I pay my sales tax back to the state if I made a few sales and decided not to go on any further and get an LLC? Also, if I am dropshipping, would I still only charge sales tax in the state I live in?
K so I'm so confused by this. If I start an online store and lets say I have 20 items for sale. If I sell 1 item in my state I pay tax in my state. If 10 other users come and make a purchase from other states do I collect tax for their states as well or do they not pay tax until I hit my limits in that particular state? or do I collect taxes anyway and pay it to my state?
I think there are two separate kinds of nexus. Physical nexus, meaning you have a physical presence within that state and Economic nexus. Economic nexus is when you are required to collect and pay after you have hit a certain threshold of sales. Not sure about the details on economic. Also you don’t need to have a LLC to register for sales tax. You can do this as a sole proprietor as well.
This is the best video that I have seen where you explain taxes and Shopify clearly. Thank you!
Thank you so much
I was so shook after watching a couple of videos and I was like OK I can’t do this but I have to watch your video you made it so simple thank you so much
I love hearing that. Thank you so much
im not the kinde guy that posts comments but this is somethink else. i was frustrated whan it came to taxes as a beginner i looked through a lot of videos but i got more confused until i found your video which was so clear and easy to understand. thank you so much
Wow, thanks so much! Taxes can be extremely frustrating. Glad this helps!
Your video was extremely informative, thank you. Some updates in Florida: It is required as of July 1st 2021 to collect sales tax although you are only selling online. Also, TaxJar requires a subscription to autofile ($20 a month) plus it is $30 more per auto file.
Tax jar saves you about a million dollars worth of time, worth it
i’d rather pay those fees and make sure i’m paying proper taxes , also not stressing myself out by paying them myself
What does this mean for Florida?
I opened and LLC first to start my small business and now I'm going to start my shopify store and I'm nervous. This is the clearest explanation I have heard on where to collect taxes. Thank you!!!
You're so welcome!
😂😂damn. I've roamed all around watching those bunch of sales tax videos couldn't helped me. Why no one could explain as simple as that! Your video made me stress less ❤❤❤thanks alot! 👍
Glad it was helpful!
I been doing a lot of research in this topic but from my understanding is if you reside in one state and you sell your product in another state your considered to have an entity in that state there for you have to pay sales tax for that state as well so this is where I’m confused in , you provide great transparency in your video , but I’m still confused on this aspect please clarify if you can
You pay sales tax on sales made inside your state. No sales tax on sales made outside your state unless you have an office in that state. There are a few exceptions, but this is the case for the vast majority of small businesses.
@@KerryEgeler thank you for the clarification and fast reply , just subscribed 👍🏽
@@KerryEgeler Hey I have another question so my supplier that I use is located in New York and I’m located in Texas but every time that I make a transaction through his store for me to drop ship they charge me A percentage in Sales Tax When we’re shipping to different states , But as you said I can only charge sales tax With transactions in my state So I don’t charge any sales tax out of state, How does that work?
The video I didn’t know I needed. This was sooooo thorough, thank you so much for the step by step walk through!!
Thank you for the kind words!!
So I have a question.
Do I charge the customer sales tax in other states where i am not paying sales tax to that state? I’m operating out of California so obviously I’d collect sales tax for anything sold in California but what about the other states?
Asking to know for sure... I run my business in Texas. I've sold and shipped items to customers in WA and they were not charged sales tax. Is this normal? No states outside of Texas will be charged tax?
Yes this is totally correct and normal
Great video! Quick question, how do I know I’m properly charging sales texts for customers outside of my home state? I’ve had a few orders from customers where they should have had to pay sales tax and didn’t…I just don’t see anywhere on Shopify where you can select to charge all US states (if applicable). Thanks in advance!
You only need to be concerned with this if you are selling a significant amount outside of your state. Generally speaking, you don’t need to worry about sales tax outside your state unless you have let’s say $10k/month+ in another state. States have different thresholds for requiring sales tax.
If you use a POD like Printify, that has print providers all over the country, they actually charge you tax for all your orders. That means even though you only owe tax in one state, your customers all over the country has to pay it (or you pay it on their behalf) directly to Pintify. It sucks, but that appears to now be the way it works at least with them.
This was super helpful!! This whole time Im thinking sales tax and state taxes are the same thing. Would you be able to make a video on how to file your sales tax in your state and how.
I have only ever filed in Oklahoma
Finally, some explaining this in a simpler way and not speaking as if your audience are tax experts! Appreciate the Info!
Man I love that comment! Thank you
The most clear and complete explanation that I've found. Thank you Kerry!
OMG thank you so much for those kind words!
Agreed. Just subscribed for that reason
I have been holding out on my website launch due to the tax issue and not understanding how it works in Shopify. After watching several videos, yours was what I needed for completion of the task at hand. My only question is that Shopify has changed the format within the tax section. The items that you featured as not the same as I have available. I was not sure if you have update this tutorial since you initially posted? I look forward to hearing from you. Thank you again! Really great work!
Thanks for the suggestion! I do not currently have an updated tutorial, but I will consider putting another out
Thank you!! I was so confused and overwhelmed about the tax portion. This helped tremendously.
So glad!
What if there buying from NY and I’m in CA cause taxes don’t pop up in check out ?
What about print on demand? I am in FL but the company that makes the item and mails it to the customer is in California.
If you're looking for a print on demand provider that would be shipping closer to your customers, Gelato is a great option. They have numerous locations globally, and therefore faster shipping time.
I've watch like 6 videos on this topic and yours made the most sense
Let’s goooooo thank you!
Thank you, thank you, thank you!!!! You made it so simple and straight forward for me. I finally understand what I need to do! Much appreciated ❤
3:38 It is against the law to collect sales tax "just in case" - you MUST hold a seller's permit for the state you are collecting sales tax in, files sales and use tax returns, and remit that sales tax. Do not follow this advise - completely incorrect and harmful to viewers.
Best explanation that does not try to scare you into buying some sort of consultation or service! I just subscribed!
Let’s goooooo!
Aside from physical location economic nexus should be considered as well and if you have remote employees you might have nexus as well. I would not recommend to collect sales tax before you have permits from state to do so.
I don't typically comment or like TH-cam videos - But when I do, it means the video was FREAKING HELPFUL! THANK YOU!
OMG thank you! You’re very welcome!
Kerry, that was a life saver of a video 💙
Just one question as I am planning on launching my Shopify store from overseas (Europe).
Is there some automated way to determine whether I have an economic nexus already established with some state?
Or I should set up all the states from day one with tax jar on board?
Or am I simply overthinking? 😜
Thx for response 😉
Hi Kerry, thanks for the useful video.
There's a section in the settings now where you need to categorize your products, which seems super important, since each product category has a different percentage.
Have you covered this in a different video?
Please explain how to calculate taxes on shopify page if customers buy stuff from another countries instead and not only in one as a business owner who lives in one home country?
You don’t charge tax or pay tax on these sales
thanks for the great information. I am based in Norway and starting a POD business. My suppliers will be from China, Usa etc. I will be using printify. I want to just target the US market. I will be paying income tax from my store. but what about sales tax? and how should I go about it?
I am sorry, I don’t have advice for you with you being based in Norway. I am not familiar with the tax laws over there.
Hey, Kerry!
Great content as usual. Greetings from Egypt!
What about the economic nexus? Which means that even if you are not a resident or having some sort of physical nexus in the US, you'd be still charged tax.
For example, if you're using Printful as your dropshipper, they HAVE TO collect taxes as they have nexus in the US. Eventually, they might collect it and deduct it among their costs I guess.
This is what I got of various vids about this topic. Hopefully you correct me if I'm wrong.
Stay safe, awesome and productive!
Great informative video, thank you! I'm still unclear on other states sales tax though...I'm based in AZ so I would set up my state sales tax collection and remittance here. But if I sell to other states, do I not need to collect sales tax at all since I don't have a physical presence there or only when I reach each state's threshold of sales/income?
Correct, Shopify will automatically collect sales tax on sales within your state. Check local laws in your state, but generally will not need to collect sales taxes in other states until you reach their threshold.
Thank you so much for this video. Just wanted to know. I registered my business because I thought I needed to right away. And Im goin to have to pay 3 months before I’m anticipating to launch. What happens if I haven’t started my business before the time needed to pay back?
Usually if your business is registered, then the state will want you to pay sales tax on the sales you’ve made. Hope this helps 🙏🏻
Hello, thanks for this video. So do I have to report sales in other states? Or just report sales from within my state?
Look at local laws in your state, but generally you only collect sales tax from sales made inside your state.
Exactly i dont have ny business permit i was worried about taxed thank you for explaining exactly same idea start first when we earn and love to continue thats the moment to start the permit process
Correct me if I’m wrong, but when running a Shopify print on demand store, are you paying taxes twice on one product? Once when the product is purchased from Printful or Printify, and again when it is sold to the customer shopping in my Shopify store, since we have to collect tax for the irs as well as pay it since we are middlemen right?
Sales tax is 7.84% in my state, so if this is right then I could be looking at a total of 15.68% sales tax total for my state for each product I sell.
I’m trying to figure out how to price my products, and this thought crossed my mind.
Hi Kerry, this is such an amazing video. I just want to confirm that I only need to collect sale tax in my state only?
Thank you!
That is correct, but double check your state
Question, Shopify changed the UI on the site a lot from the example you have here. By default, the automatically selects Shopify Tax, which has a fee, would we be able to select either Basic Tax or Manual Tax? Seems like a bad idea to have Shopify Tax that has a fee and TaxJar which also has a fee, so we would be charged twice. So trying to figure out this new setup.
Shopify tax is free under $100k of sales. Shopify tax does not file your taxes for you, it simply generates a report for you (which does help). The reason you would consider TaxJar is for one reason - AUTOFILE. The filing process is probably my least favorite thing to do as an entrepreneur of all time. I would pay 10x what Taxjar charges to not have to manually file my sales taxes. TaxJar automatically does your sales tax for you through their autofile feature. It’s incredibly helpful.
You have the best videos. Thank you. I live and I am incorporated in the state of Montana. Montana does not have sales tax, but I sell to people on shopify in other states. I think I understand you are saying no, I only charge sales tax for the state I live in. So if MT has no sales tax, then I don't charge sales tax to anyone?
3:38 It is against the law to collect sales tax "just in case" - you MUST hold a seller's permit for the state you are collecting sales tax in, files sales and use tax returns, and remit that sales tax. Do not follow this advise - completely incorrect and harmful to viewers.
Okay so I’m based in PA. If someone from say New York or Florida buys something they don’t pay any tax on the product but people from PA will pay tax? I used big cartel before shopify and on every product I just put the clothing tax code and everyone would pay taxes regardless the state besides states like Jersey who don’t pay tax on clothing. Let me know thanks!!
Thank you so much! I'm just starting and have a huge migraine trying to figure out the tax thing and with you saying I don't have to worry about it right now because I don't have my LLC due to not having money and don't know if it's worth it I can breathe and open my shop.
Yes! It can seem like a lot up front, but you've got this!
so I don't have to buy a sales tax ID for all the states I sell to because my business is not actually there?
That is true
We have to collect sales tax for in state and out of state for TN
many states have a nexus of 200 orders OR $100,000 in sales
Thanks for the info
Do I still collect sales tax if I just plan on selling under my ssn and not get a LLC ? And what happens if I don’t collect sales tax ? How do I pay the sales tax that I collected if I operate my business under my ssn and don’t plan to get a LLC ?
What about adding sales tax on other states? Would you have to add every single state individually and get a sales tax permit for every single state?
Look at local laws in your state, but typically you only collect sales tax from sales made inside your state.
Great video! Have the rules changed for/in 2022? If so, do you have an update for us? Thank you. :)
As far as I’m aware, this process is still current!
@@KerryEgeler Is it still current now or do you have an updated video now in 2024?
we are from UK.. whats is difference between sales tax and vat ? are they same ?
No idea
Great video my friend. I have a quick question. Does Shopify have a setting that it doesn’t show that I’m collecting taxes yet it will collected on the back end and put it on that jar app that you mentioned? Example my shirt is priced at $25 and I want to includ the sales tax on that price but I don’t want my customers to see it. Thanks
Bro your a blessing, this video saved me I was mad close to giving up after spending hours making my store🙏🏾
Thank you for watching and thanks for your comment!
Hey question because I’m so confused and been trying so hard to understand. Your video helps a lot but my question is let’s just say we are using your account to sell stuff. You only turned on sales tax for your state of Oklahoma but what if something sells in South Carolina? You only turned on sales tax for Oklahoma so do you have to turn it on for South Carolina since you sold it there? Or is it only turned on for the state where you are physically located?
In most states, you only need to worry about sales within your state
Well when your adding your EIN to Shopify it asks how the business is registered and if that's not correct because you told someone to create and LLC after they can't make sales.
This isn’t true, just put your social security number and sole proprietor and move on. Shopify even states you can do this
Thanks so much for this video!!!!! Do purchases on other states will not be taxed? But do we still have to pay tax on them?
Do I have to pay sale taxes if I sell little? I dont have an llc i just have my EIN.
When will it be good to get an llc license? After selling a lot?
I hope you can answer thanks
If you’re selling a very small amount, I probably wouldn’t worry about it right away. But don’t take this as professional advice, you might want to talk to a CPA.
I wanted to do what you say about Not to collect taxes at the beginning, but shopify reported me that I needed to do it, and checking the NY state law, they say that even sole proprietorship Must register for tax collect and register the business before starting. So, I had to do it before opening the online store.
Do your thing!
My business c corporation is in Wyoming but I live in Florida. Do I correct for both of those states and pay both states??
I was in affiliate marketing only before but looking to start print on demand
Thanks a lot man, I'm trying my luck in the tshirt business and was a little perplexed on how to make sure my taxes are being collected.
Glad I could help
Should I make sales before setting up sales taxes on shopify to collect?
Thank you ! For making this extremely simple ! I went threw a couple of tutorials and I was about to pull my hair out tryin to understand LOL
Same for me literally going crazy lol I’m so happy I found this video
Thanks so much for explaining. Question: at 3:46 you mentioned prior to registering an LLC/license/tax permit etc., to still proceed with setting up sales tax in Shopify so you’re collecting it, and just set it aside in case you have to come back and pay those taxes once biz is set up.
But the US sales tax page in Shopify (shown at 5:08) reads “If you have a nexus, you can start collecting taxes once you’re registered with the appropriate tax authority”. So does this mean that even if you add your state (with nexus) now, tax wont be collected until registering with the appropriate tax authority? Or does it just say that, and will still allow you to collect tax prior to registering with the state?
Thanks again!
pardon, did you find this answer to your questions? because i have the same questions...
If i have office in florida and warehouses in new york i must add one location my residnet based iffice ?
You would pay taxes on any sales you make to customers in Florida and New York. And you would need sales tax permits in both states I believe
I still don't get it. So do I only choose my state when collecting tax?
What about they are from different state purchasing to my website? Do they still get charge for the tax?
so do i have to set up it for each state? you said that people in oklahoma would only be charged sales tax... so does that mean if you only set up oklahoma people in californa wont get charged sales tax?
First video I found that actually explained it clearly
🕺🏻🔥
Does taxjar deal with sales taxes and income taxes? Thanks 😁 Most helpful video I’ve seen on taxes!
Edit: is there a better substitute for taxjar since after looking through reviews their service seems to be terrible now then it was before… thanks.
If you don’t use an app, you can do it manually. When I was doing it manually, it would take me 3-4 hours on average in one sitting to process my sales taxes each month. This could be quicker depending on how good the system is in your state. Oklahoma stinks.
If you run multiple shopify stores in the USA, do you know if these stores combined have to pay sales tax in other states when they all hit the threshold of sales in a state? or is it by each store hitting the threshold individually? thank you
Your business as a whole would need to hit the threshold unless you have them setup as completely separate businesses.
What if all our sales come from other states. I'm in Texas. If no one in Texas buys from me do I still file or file zero.
what if your shop is in Canada and you're selling in the states?
Absolute best video on this subject. How on Earth are the other youtubers skipping over this??!?! Thanks man.
Thank you so much!
So When do I need to get a sales tax permit or do I even need one if I use Tax Jar?
I have a Shopify store and I’m having trouble to setting up tax for my state. I’m not seeing Texas in the drop down box where it shows the difference state options. What can I do?
If someone that does not live inside my state, they don’t need to pay sales tax? I looked back on some previous invoices for people out of state and it did not charge tax on their purchases.
Thanks for the info! Do you know if TaxJar automates use taxes too? I’m going to need to pay them since I’ll be selling via POD
Wow, this info is gold. Thank you for dropping these gems.
This explained everything I needed in 11 minutes, i thank you so much man
Glad to hear that
Did you say that if i live in NY and i sell my sculptures in another state ... that sales tax is not included in other states .... saving that money.. is that right.
If taxes are to be charged in the state where your customer is located, Shopify will add it to the order.
@@KerryEgeler THANKS, are you familiar with ECWID... it is another selling sight.. They have a free plan but it does not come with TAXES CALCULATED automatically... only the paid plans on ECWID... it seems like their free plan is a little inadequet if it does not help with taxes calculated automatically.. I cant imagine selling in a STATE where taxes are not going to be charged.
Hi Kerry, What happens if you are a remote merchant? I live in The Netherlands but want to sell supplements to the US. The supplements are a POD company in the US. Will I need to pay sales a tax?
im from sweden and sell thing all aorund the globe, which customers do i have to charge taxes on?
Not sure, I sell in the US
Another legendary video! And this is the first time I've been on your channel!
Dang!! Love it!!
Taxer autofill isn't included in the $19 month, correct?
I don’t think so
What about someone who is using Printify? They charge taxes when they print your orders. You're taxed on the production cost. You can only get exemption from your state you have nexus in. But that means I'm paying taxes in all other states out of my pocket. Should I be registering in all states so I can be exempt? But then I'd be required to pay taxes in all those states. Or should I just collect from all states from my customers in Shopify so that cost is covered? Or does that mean the IRS knows I'm collecting and even if I don't have nexus I have to submit the sales tax to each state?
You need to obtain a sales tax license from whatever state you are based in. You can submit this to printify to avoid paying sales taxes on your cost of goods with printify.
@@KerryEgeler Yes, I have that already. But Printify is charging me tax in all other states. There is no way around this, right? I know there is some kind of multi-state exemption that is for a handful of states, that can use my CA sales tax exemption. But if I submit that to Printify, does this mean I have to charge my customers sales tax and submit it to all those other states as well? Or would I only need to charge and pay those states if I meet their threshold?
Shopify taxes works by Billing address or shipping address?
This does not relate to taxes .. But... How can one build a store ...and still... Capitalize on seasonal trends at the same time.... Need Help... Very confused on how i could/possible to do both..??
We can definitely help - check out our free class at shirtschool.com
@@KerryEgeler doing p.o.d. model is it viable to go in a life style band format like you would in a brick and motor.. Or does that strategy not work well for p.o.d.?
@@KerryEgeler will do second i get home from work
Does this work also for canada the « you only pay taxes for people in ur state »
In 2022 do I still need to pay sales tax on products in my state
Yes
Hi Kerry,
I don't fully understand something. You say we only pay taxes in the state where our business is registered. But what about sales taxes collected and sold in other states? Don't we have to pay these taxes in other states as well?
No, you don’t. Unless you have a business location in those states or if your specific state says otherwise. (Double check your state) the only other time is if you sell more than something like 100k/year in a state outside of your own state. …..not financial advice 🤓
This was so incredibly helpful! I really appreciate you taking the time to explain this. Thank you so much!!
Glad to hear this!
Perfect timing, Kerry!!! Just got my state's Sales & Use Tax license!!! Thanks for this!
Let’s gooooo !
@@KerryEgeler Opening a Brick & Mortar for Luv Pup so very anxious for that POD to Screen Printing training!
You said..."sales nucleus"....so did the lawas change recently? I thought it all depended on Sales "nexus?"
I probably just said the wrong word 😳
just started my company and you have been great I absolutely love your videos and will always come back to your page for advice or how to’s thank you!
Thank you so much!
Where do I change the tax rate? Our county just lowered the tax rate. Thanks
Shopify auto calculates it
Kerry this is golden..you gotta be the goat!
3:38 It is against the law to collect sales tax "just in case" - you MUST hold a seller's permit for the state you are collecting sales tax in, files sales and use tax returns, and remit that sales tax. Do not follow this advise - completely incorrect and harmful to viewers.
Very clear video! Thank you. Quick question, I looked at purchases made on my website from other states and the customer is not being charged tax to purchase, but customers in my state are. Does this fall under the Nexus? If I go to purchase something online on shopify from someone I know does not live in my state, I always pay sales tax. Or is tax charged at a later time?
did he ever got back to you?, because i also have the exact same question! i went into the "preview and if the address is from a different state from where im selling it does not charges them tax? wondering if i moved something or is the system is like that. any help will be greatly appreciated
@@angelaguerra7149 No response. I have searched several shopify blogs and no direct answer.
@@angelaguerra7149 any answer?
@@justashleydenise any answer?
I thought you had to pay sales tax not just in your state- some states collect the rate from where there items ship from and some collect by the destination. Hoping he responds to this soon!
Should I start with Tax Jar then when i get enough sales get a LLC?
Get your LLC and sales tax permit before using taxjar
@@KerryEgeler thank you and lastly do i need to buy a 150$ llc or i can get the basic 50$ one
Thank you so much for this info...I was kinda worried 😟
You’re very welcome!
What about ppl who buy things that are from another state? Do you collect sales tax for them as well?
Look at local laws in your state, but generally no, you only collect sales tax from sales made inside your state.
Can you do the same for non us residents
I have not personally dealt with taxes outside of the U.S.
How would I pay my sales tax back to the state if I made a few sales and decided not to go on any further and get an LLC? Also, if I am dropshipping, would I still only charge sales tax in the state I live in?
You can’t pay sales tax without an LLC and sales tax permit. And yes
This was soooo helpful! Other videos are so vague but you really made it easy to follow. Sharing this with my friends!
Thank you!
K so I'm so confused by this. If I start an online store and lets say I have 20 items for sale. If I sell 1 item in my state I pay tax in my state. If 10 other users come and make a purchase from other states do I collect tax for their states as well or do they not pay tax until I hit my limits in that particular state? or do I collect taxes anyway and pay it to my state?
Thanks so much! so helpful!