USA tax rates and policies

Automatic Tax Rates - use within United States only

If you are a merchant with a business that needs to charge tax within the United States, taxes will apply on the county, municipal, and state taxes level, depending on your local tax laws.

To enable this feature:

  1. From your Shopify admin, click Settings, and then click Taxes.

  2. Under the Tax Rates header, click United States

    Click usa
  3. Click the I want to specify taxes automatically in the County, Municipal and State Taxes section.

    Automatic taxes

Adding a physical presence

As part of setting up automatic tax rates for your store in the United States, you must add your physical location. Shopify provides automatic tax rates based on the zip code of where your business operates.

To add your store's physical presence:

  1. From your Shopify admin, click Settings, and then click Taxes.

  2. Enter the state your physical presence is in, and select it from the drop-down menu.

    Add presence 1
  3. Enter the zip code for your physical presence, and click Add state.

    Add presence 2

Note

Depending on the state you operate your business in and the products you sell, the amount of tax you're required to charge and remit to your government can vary. Shopify does what it can to calculate your taxes accurately, but you should contact your local Chamber of Commerce, an accountant, or another local tax authority to advise exactly which tax rate(s) you should charge your customers based on the products you sell.

Removing a physical presence

To remove a physical presence for your business, from your county, municipal and state taxes table:

  1. From your Shopify admin, click Settings, and then click Taxes.

  2. Click the trash can icon in-line with the presence you wish to remove.

Remove presence

Note

If your store has different tax rates depending on the products you sell, you will need to set up a tax override.

Manual Tax Rates - outside United States

If you are a merchant with a business that needs to charge tax outside the United States, you must configure your tax rates manually. Manual tax rates are set on a federal level for all countries, but certain countries, like Canada, support sub-regions for its individual provinces.

Configuring taxes in a country with states or provinces

You can configure countries, like Canada, Australia, and New Zealand support taxes by region within the country's tax menu.

To set manual tax rates:

  1. Go to the Taxes page of the store Admin.

  2. Under the Tax Rates header, click the country you wish to set rates for.

    Click canada
  3. Set your Country Tax, and the tax for the individual Regions in that country.

    Canada tax

Tip

When manually configuring tax rates by region, you can name the tax rate, and select to apply it instead of the overall country tax, or to have that rate added to the overall country tax.

If your store has different tax rates depending on the products you sell, you will need to set up a tax override.

Note

Shopify cannot guarantee 100% accuracy with regard to which taxes apply to your business. You should reach out to your local Chamber of Commerce, an accountant, or another local tax authority to advise which tax rate(s) to charge your customers.

Configuring taxes in countries that do not impose local or provincial sales tax

If your country does not impose taxes by region, you will only be able to set the overall country tax.

To set manual tax rates:

  1. Go to the Taxes page of the store Admin

  2. Under the Tax Rates header, click the country you wish to set rates for

    Click uk
  3. Set your Country Tax, and click Save.

    Uk taxes

Note

If your store has different tax rates depending on the products you sell, you will need to set up a tax override.

US state tax policies for shipping and handling

If you are shipping a product to or within the United States, you will notice a Tax policy option under the state's Tax Settings. The Tax Policy is dependent on the state's rules for how shipping or shipping and handling should be taxed.

Viewing your shipping tax policy

  1. From your Shopify admin, click Settings, and then click Taxes.

  2. Click on United States.

    Taxes 4
  3. Click on the tax rate listed under County, Municipal And Other Taxes.

    Taxes 5
  4. Search, or scroll to the county you wish to view the policy for.

    Taxes 6

Note

Shopify automatically updates its automatic tax calculations regularly. If your tax information is out of date, contact our support team and provide a link to official government documentation outlining which changes need to be made.

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