Manual Tax

Note

This guide is for merchants in the United States, European Union, and United Kingdom who set tax rates manually. If you use Shopify Tax, then refer to Shopify Tax.

It's your responsibility to consult with local tax authorities or a tax professional to verify that you charge your customers the correct tax rates, and to ensure that you file and remit your taxes correctly.

To ensure that you charge the correct amount of tax, configure your tax settings on the Taxes and duties page in your Shopify admin.

Limitations of manual tax settings

The following features aren't available when you set your taxes manually instead of using Shopify Tax:

• Automatic rate calculations using tax registrations
• Automatic rate calculations using product categories
• Automatic recommendations for product category
• Rooftop accuracy
• Support for state fees
• Managed Markets
• Tax holidays
• Tax liability insights
• Advanced reports
• B2B tax exemptions
• Customer tax exemptions

If you require any of these features, then review the table of tax services to determine which tax service is best for your needs.

Before setting up tax settings and rates manually

If you're new to Shopify, then you need to determine whether you should charge sales tax before you start selling. You might need to register with multiple tax agencies. After that, you can set up your taxes in Shopify to help ensure that you charge the correct rates wherever you sell in the United States, European Union, and United Kingdom.

Before you add tax rates in your admin at Settings > Taxes and duties, review the following considerations:

• You need to determine whether you should charge sales tax. If you're not sure, then consult with the relevant tax authorities or a tax professional.
• If you need to charge sales tax in one or more jurisdictions, then you need to contact each of the relevant agencies and register with them. The process varies depending on where your business is based and where you sell, and on individual government requirements.
• After default tax rates are set up manually, they're not automatically updated based on new regulations unless you click the Reset to default tax rates button again.

Set up manual tax rates

After you determine where you need to charge sales tax, you can manually set your tax rates.

Steps:

1. From the Shopify admin, go to Settings > Taxes and duties.
2. In the Tax regions section, click the region that you want to set up taxes for.
3. In the Base taxes section, specify the taxes manually for each state and region, or select Reset to default tax rates to use the current sales tax rate for each state or country.
4. Optional: For US tax settings, you can choose whether a tax in a region is used instead of a federal tax, added to a federal tax, or compounded with a federal tax.
5. Click Save.

Remove a physical presence

Although you can remove your business's physical presences, you need to keep at least one physical presence for the country that's specified in your store address on the Settings > Store details settings page.

For tax purposes, it's assumed that you have a physical presence at your store address. If you remove that physical presence from the Taxes and duties page, then that location is automatically added back.

You can remove a physical presence from the County, municipal, and state taxes section.

Steps:

1. From the Shopify admin, go to Settings > Taxes and duties.
2. In the Tax regions section, click the relevant region.
3. Click the trash can icon beside the physical presence that you want to remove.