Why is Shopify different from a marketplace?
Marketplaces such as Amazon, eBay and Etsy are marketplace facilitators: they collect and pay sales tax on orders placed through them. A Shopify store is your own shop, and Shopify provides the software. You are the retailer, so the duty to collect and remit sales tax is yours. See how US sales tax works.
Where do you need to collect?
In each state where you have nexus: a physical presence, such as your home office, staff or inventory, or sales above the state's economic threshold, most commonly $100,000 a year. Include marketplace sales when testing thresholds in states that count them. See economic nexus explained.
How do you set it up?
Register first
Get a sales tax permit from each state where you have nexus before charging tax there. See how to get a sales tax permit and seller's permits and business licenses.
Add registrations in Shopify
Enter each state registration in the store's tax settings so tax is charged only where you are registered.
Set product categories
Assign each product a category so the right taxability applies in each state, for example for clothing or food.
Decide on shipping
States differ on whether shipping charges are taxable. Check that the store follows each state's rule.
Handle exemptions
Mark wholesale and exempt customers as exempt only with a valid certificate on file.
File and pay
Shopify's reports show tax collected by state. File each state's return on the schedule it assigns.
Shipping taxability and sourcing differ by state. See sales tax on shipping and origin vs destination sales tax.
What do Shopify's tax tools do?
They calculate rates for addresses where you are registered, apply product categories, and report tax collected. Some tools can also help you see where your sales are approaching state thresholds. They do not register you with states, and they do not file returns for you unless you use a separate filing service.
What if you also sell on marketplaces?
Keep the channels separate in your records. Marketplace sales are taxed by the marketplace. Shopify sales are taxed by you. Some state returns ask for both, reporting marketplace sales as nontaxable for you. See sales tax for Amazon FBA sellers.
What are the common mistakes?
- Charging tax in a state before registering there.
- Not charging tax where you have nexus, then owing it yourself.
- Treating wholesale orders as exempt without resale certificates. See resale certificates.
- Forgetting to file returns for periods with no sales.
Recording the tax you collect is covered in bookkeeping for Shopify stores.
Want your Shopify tax set up right?
We work out where you have nexus, register you, configure collection in your store, and file the returns every period.
Questions people ask
Does Shopify collect and pay sales tax for me?
No. On your own Shopify store you are the seller and are responsible for collecting and remitting sales tax.
Do I need a permit before charging sales tax on Shopify?
Yes. Register with each state where you have nexus before collecting its sales tax.
Does Shopify file my sales tax returns?
Not by default. Its reports show tax collected, and you file each state's returns yourself or through a filing service.
Do my Amazon sales affect Shopify sales tax?
They can count towards economic nexus thresholds in many states, even though Amazon collects the tax on its own orders.
Sources
Every fee, date and rule on this page was taken from these official and primary sources.
- Streamlined Sales Tax Governing Board: Marketplace facilitator state guidance
- Texas Comptroller: Remote Sellers
- California CDTFA: Tax Guide for the Marketplace Facilitator Act
Rules and fees change. If you are reading this long after September 30, 2026, confirm the figures with the source before you rely on them.
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This guide is general information. It is not tax or legal advice for your situation.