Understanding Shopify Sales Tax Filing and Registration

Dec 14, 2022 | Blog Posts, E-Commerce, Shopify, Tax Filing, Tax Registration

Understanding Shopify Sales Tax Filing and Registration

The world of e-commerce and its accompanying sales tax can be a confusing and sometimes overwhelming space. With ever-changing state-by-state regulations, small to medium size online retailers often find themselves scratching their heads at the nuanced details that go into this process.

Are you tired of spending so much energy on such a detailed element of sales? Do you find yourself wishing for a simpler process and want to return to a more straightforward approach to sales tax? HOST has you covered.

This article lays out everything you need to know on how to approach e-commerce sales tax with a clear head. Below are some steps to make registration and filing a breeze and how HOST’s services can help you get there. While our clients utilize a numerous array of e-commerce platforms and plugins, this article primarily focuses on the ins and outs of sales tax registration and filing for Shopify.

What is Economic Nexus

At HOST, our consultants work directly with small and medium-sized e-commerce businesses and financial service partners that need a helping hand managing changing sales tax requirements.

The introduction of economic nexus requires e-commerce retailers to register and collect sales tax once they have crossed the economic nexus thresholds per state. Although the thresholds vary by state, the most commonly used threshold among the states is $100,000 in sales OR 200 transactions in a calendar year. While Shopify provides some services that may inform clients of when they have reached their nexus, they do not provide support services for tax filing or registration. HOST meets the growing demands of e-commerce companies and remote sellers alike that need a one-stop shop sales tax service.

How We Can Help

HOST offers a myriad of customizable service options to provide each of our clients with a tailored assistance plan fitting for their individual needs. We directly handle sales tax registration and filing at the state level, taking care of the nuanced details so our clients can put the focus back on their businesses.

To start, our clients are provided with a form that helps them get a sense of the necessary next steps. They are also provided with several informative resources to provide clarity on the tax registration and filing process. These resources cover the following topics:

  • The registration process in easy, digestible steps
  • Where and how to register for sales tax
  • The difference between economic and physical nexus
  • What a marketplace facilitator is
  • And much more!

Sales Tax Registration & Filing Services

Depending on the tier of service our clients have selected, once they fill out the brief form on our website we use to gather business information, HOST takes it from there.

Once we set up tax registration for our clients in the states in which they sell, they are set up with an online filing account. HOST will take the lead in submitting any necessary documents to the state and, if you opt into our filing services, handling any tax season filing and return needs (depending on the state).

Filing status/frequency is assigned at the time of registration and HOST will let you know that state assigned frequency, along with other state assigned information, at the end of the registration process. Our filing services include HOST filing completely on our clients’ behalf, gathering necessary information from our clients when needed, and providing monthly updates to ensure communication remains clear throughout the entire process. HOST files the returns to the state and we remit the tax liability payment on our clients’ behalf.

Want to learn more about HOST’s tax filing and registration services?