How to Handle Sales Tax on Shipping Charges in Shopify 

Shopify is a leading e-commerce platform. It enables entrepreneurs to build their online stores. Shopify is easy to use, especially for dropshipping, so you can start your store even without any technical knowledge or experience. It is perfect for users who want to create an online store without hassle. Plus, using Shopify will give you access to the rich Shopify themes and apps available on the platform. Over a million entrepreneurs and companies already use Shopify to run their businesses, probably because of their excellent options that allow users to succeed with their online stores. And, of course, if you’re looking for add-ons that aren’t available on Shopify, you can find them in the Shopify app store to supplement your store’s needs. Many companies are looking for a platform that will guarantee security and speed even during the biggest holidays when there are many purchases and high traffic.

There are many dilemmas regarding the taxation of shipping costs. While some countries’ shipping costs are taxable, other countries consider it unnecessary. And you can also encounter much more complicated situations. That’s enough to confuse you. Although, if you’re operating through Shopify, you probably want everything to comply with the law of the country you’re operating from. Let’s simplify the situation a bit by explaining to you how to deal with taxes and taxation if you work through Shopify.

What is sales tax?

We have already mentioned that sales tax and taxation can often be confusing. First, we should emphasize that a certain percentage of every sale is considered a sales tax. This means that you have to pay that part, or a certain percentage, to the government of the country where you work. When it comes to Shopify, you need to be aware of the rules and laws of the country where you operate. Even in America, laws vary from state to state. You must carefully analyze all the laws, so you do not find yourself in an awkward situation.

Shopify can bring you very good business and rapid advancement. On the other hand, it is also essential that you respect certain things as the Shopify platform respects you. This includes sales tax. When shipping to certain countries, it is crucial to check the tax regulations of the country you are shipping to. Although this is not fixed for all countries, you should research it yourself. Some countries consider shipping tax-free, which makes your customers more satisfied.

The advantage of being a Shopify seller is that you can set up your store to account for all taxes. This means that tax calculation will be done automatically every time. That way, you will save time and nerves for sure. Shopify helps you with calculations, so you know how you stand with taxes, but on the other hand, it doesn’t respond to sales tax returns. While this is some boring legal stuff, you need to be familiar with it in order to legally run a Shopify store. Simply put, it means you have to legalize your store, and the IRS will take care of your sales tax. You certainly don’t want to screw up things like this in business.

How to charge sales tax?

First, let Shopify know where it needs to collect sales tax from customers. Go to Settings, select Taxes, then select regions. And it’s not that hard, right?

After that, set up sales tax calculations. And you will finish this in a few simple steps. First, you need to fill in some information and then choose between four options related to tax calculation

Final Words

Although this looks confusing and boring at first glance, you must pay attention to sales tax. If not, you can put yourself in a bad situation, where certain countries can charge you for various things related to tax. You certainly don’t need it. And best of all, you can do the job in a few simple steps.