Hi, Shopify sellers. This
is Kexin from LedgerGurus.,And today I'm gonna talk to you about
sales tax settings in your Shopify store.,I know this is not the
most exciting topic,,and it's just another admin task
to add to your list. But trust me,,if you can set this up correctly,,then you are on a really good path
to be compliant with sales tax,,and you don't have to pay
much out of your pocket.,So before we dive into the content,,if you haven't done so please subscribe
to our channel and hit that bell,,so when we get new videos
published, you will get notified.,So at LedgerGurus,,we help so many e-commerce clients with
their e-commerce accounting and journal,entries and transaction coding and bank
reconciliations. But at the same time,,we also have a dedicated
sales tax team that manage,everything that's relating to
sales tax for these customers.,So I'm in Shopify all the time,,and I do these sales tax settings
for my clients day in and day out.,So this is really my arena to share
my experience with you guys. Please,comment if you have any questions
and we'll be sure to get back to you,on those questions. So, today
I'm gonna talk about two things.,The first is how does sales
tax work with Shopify?,Who's collecting it?
Is Shopify like Amazon?,And then the second part is I'm gonna
walk you through the things you need to,make sure you finish setting up on
your Shopify store to be sales tax,compliant. So to answer
the first question,,we get lots of inquiries on,what's Shopify? How does
Shopify deal with sales tax?,And the answer is Shopify is not like
Amazon or Etsy or Walmart or another,marketplace facilitator,,where you can just hand
over the responsibility to,them for, to collect and to remit
tax to the different states.,If you are selling on Shopify,,every sale that goes through Shopify
is your responsibility to collect,and remit sales tax. So Shopify's
not gonna do it for you.,You have to do it yourself.,Shopify's not gonna turn on those
settings for you automatically.,You have to turn them on yourself.,So then let's talk about how
to turn on those settings.,There are five things that,,over the years of my struggle with
Shopify, that I've figured out.,So I hope that this is
really helpful to you guys.,So,,the first thing is to enter the places
you want Shopify to collect sales tax in.,So you would go to settings and you
go to Taxes and then you go to US,store. And then that's where
you can add all the states.,If you are one of the older Shopify
users, you need to add a zip code.,If you are using the new
interface, which I really like,,then you don't have to enter the zip code.,You just need to enter your
sales tax license and then the,state. And, then sometimes it asks
you which way of sourcing you want.,So we can talk about
sourcing another time.,So that's the first thing is you need
to tell Shopify where to collect tax.,The second thing is after step
one, if you go back out of US,,if you go to settings and then
taxes, if you scroll down,,so it's below all the different countries,,you can see a box that says
automatically calculate tax on shipping.,Some states charge
shipping, some states don't.,So you would need to check this box, so,Shopify will calculate tax on shipping.
And then for the states that you,know, are not taxing shipping,,you need to go in and add a tax
override for shipping in that,specific state.,The third thing is you want to make
sure all your taxable products are,collecting sales tax. So to do this,,you need to go to your products
and go to each products. You,can edit each variant and
then somewhere in the middle,,there's a box that says
charge tax on this product.,You want to check that for the
products you that are taxable,,some products are not
taxable, for example, gift
cards. Those are not taxable.,So you would not check the
box for those products.,Then the fourth thing is you want to
add all your locations in from where the,fulfillments are going through.,So your warehouses that are
fulfilling these orders that are,sold through your Shopify store. So
you would go to settings and locations.,And at all of those...The reason that
this is important for sales tax is because,some states are origin sourcing.
Some states are destination sourcing.,So depending on where the
goods are shipped from,,if it's an intra-state, transaction,,meaning if it's shipped from the state
to a customer in the same state versus,shipped from one state to another state,,the rates are very different and where
to look for those rates are different.,So it's important to put the
location of your warehouse there.,And the last thing is exempt
customers. If you sell to,exempt entities, or if you sell to,like wholesalers that are gonna
use your products for resale,,then those are all legitimate reasons
to exempt sales tax for certain,customers.,And thus you would go to customers and
you go edit this customer's information,and you check the box to say,
this is an exempt customer.,And you can also give a
reason on why this is exempt.,So to just summarize - five places, first,,you need to tell Shopify
where to collect sales tax.,Then you need to configure
shipping options. And then third,,you need to make sure your products
are all collecting tax for the,taxable products. And fourth, you need
to add locations of your warehouses.,And the last thing is to add
information for your exempt customers.,Let me know if you have any questions,,feel free to leave comments and
for sure to get back to them.,If you like this video, please like it.,Share it with your fellow Shopify users.,Hope you all have a good day
and I'll see you soon. Bye.
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