General tax set-up steps
Setting up tax is different in each country. Generally, it follows the same steps:
- Determine where you have an obligation to collect tax. This typically starts with your default location and where you operate your business from. This is usually your home country, province or state.
- Register with the appropriate state or country.
- Start to collect tax in each state or country.
After you've activated tax collection, consider:
- If your products have reduced rates or tax exemptions, then set the product category field or establish both a product tax override and a shipping tax override in each state or region.
- You will have to file a return with the state or region you're registered in, based on the filing cadence provided by state or region when you register. This is typically on a monthly, quarterly or annual basis.
As you set up taxes, you can access and review your settings on the Taxes and duties page in your Shopify admin. Shopify will help monitor when you have additional tax obligations in other states or countries, also known as nexus.