If you are looking to start your own business, Shopify is a great platform to do so. Shopify provides a variety of tools and services to help you get your business off the ground. One of the most important aspects of running a business is collecting sales tax. The good news is you’re only required to collect sales tax if you meet the criteria for establishing a significant business presence in the state or “sales tax nexus.”

What is Sales Tax Nexus?

Sales tax nexus is a term used to describe a business’s presence in a state, which then requires the business to collect and remit sales tax from customers in that state. The criteria for establishing a sales tax nexus varies from state to state, but generally includes having a physical presence such as a store, warehouse, or office in the state.

How Do I Know if I Have a Sales Tax Nexus?

To determine if you have a sales tax nexus in a state, you should look at the criteria for establishing a sales tax nexus in that state. Each state has its own set of criteria, but generally includes having a physical presence such as a store, warehouse, or office in the state. It is important to note that even if you do not have a physical presence in a state, you may still be required to collect sales tax if you have an economic presence in the state.

What Are the Benefits of Selling on Shopify Without Collecting Taxes?

There are several benefits to selling on Shopify without collecting taxes. First, it allows you to focus on other aspects of your business, such as marketing and customer service, instead of worrying about collecting sales tax from customers. Second, it saves you time and money, as you do not have to worry about filing sales tax returns or dealing with customer complaints about sales tax. Finally, it allows you to compete with larger businesses who are required to collect sales tax, as you can offer lower prices to customers.

Conclusion

Selling on Shopify without collecting taxes is possible if you do not meet the criteria for establishing a sales tax nexus in a state. However, it is important to understand the criteria for establishing a sales tax nexus in each state and to be aware of the potential benefits and risks associated with selling without collecting taxes.