Shopify Tax

Shopify Tax improves the accuracy of tax calculations for US merchants that sell to customers in the United States. The following features are available when using Shopify Tax:

  • Rooftop accuracy, which means that taxes are calculated precisely according to street address, rather than being limited to zip codes.
  • Product categories improve the accuracy of tax calculations and reduce the need for tax overrides.
  • An estimated tax calculation is displayed to customers when they are in the checkout process. After the checkout process is complete, the final tax amount is calculated and charged to the customer.
  • Tax liability insights are available to help determine where stores have nexus.

Learn more about your US tax service options.

Considerations for using Shopify Tax

Shopify Tax isn't available for stores that have manual payment capture set up.

Calculations using Shopify Tax are only available for certain transactions. If a tax calculation can't be performed using Shopify Tax, then the tax calculation is performed by using registration-based, non-rooftop accurate calculations. For more information, refer to US taxes or to registration-based tax settings.

Calculations using Shopify Tax are only available for the following orders:

  • Orders that originate in and are destined for locations in the United States.
  • Orders that are processed through the following gateways and payment methods:
    • Shopify Payments
    • Shop Pay
    • Stripe
    • Gift cards
    • Authorize.net
    • Paypal
    • Manual payments
    • Orders marked as paid

Calculations using Shopify Tax are not available for the following:

  • orders that originate in a country other than the United States
  • orders that are shipped to a country other than the United States
  • orders that are affected by apps that allow for buy now, pay later
  • orders with tax inclusive prices
  • orders that contain one or more products with an associated product or shipping rate tax override
  • orders that contain one or more products that are set as non-taxable
  • orders that are processed through the following gateways and payment methods:
    • bank transfers
    • Braintree
    • multiple payment methods
    • POS
    • Amazon Pay
    • Apple Pay
    • Shop Cash
    • deferred payments

Shopify Tax pricing

As of January 1, 2023, fees apply to some tax calculations performed by Shopify Tax.

Shopify Tax fee threshold

The fees for tax calculations apply only if your store has made sales into the United States that are equal to or greater than $100,000 USD in one calendar year. If your store's sales are below $100,000 USD, then there is no charge for tax calculations.

A calendar year is the period starting on January 1 and ending on December 31. Sales that count towards the threshold are orders that originate in and are destined for locations in the United States, and includes the following:

  • sales of gift cards
  • sales made through Shop
  • sales that include non-taxable products
  • sales made through all payment gateways
  • taxes and shipping fees on sales

POS sales do not count toward the threshold.

Shopify Tax fees

If your store's total sales are equal to or above the fee threshold, then a percentage fee is incurred on transactions in your store that have tax calculated. The fee applies to orders from states where you have tax collection enabled, including orders where no tax is charged due to products or customers that are tax exempt. The fee does not apply to the following:

  • orders placed with merchants that are located outside of the United States, because they aren't calculated using Shopify Tax
  • orders from states where you don't collect tax
  • imported orders from outside Shopify
  • orders or portions of orders that are paid for with a gift card
  • POS orders

This fee is charged to you on your subscription invoice for Shopify. It isn't charged to your customers and doesn't appear on their invoice.

The amount of the fee is based on your store's plan:

  • Shopify Starter, Shopify Lite, Basic Shopify, Shopify, and Advanced Shopify plans: 0.35%
  • Shopify Plus plan: 0.25%

For all plans, transaction fees are capped at a maximum of $0.99 USD per transaction and annual fees are capped at a maximum of $5,000 USD.

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