Sales Tax

US Taxes Guide for ShopRise Merchants

Note:

This comprehensive guide is tailored for merchants selling in the United States. It is crucial for merchants to consult with local tax authorities or a tax professional to ensure accurate charging of customer tax rates and proper filing and remittance of taxes.

ShopRise assists in automating sales tax charges, but it does not handle the remittance or filing of taxes on behalf of merchants. To establish where tax liability exists, follow this guide to determine regions within the United States where you are obligated to charge taxes. Once you identify these areas, configure your ShopRise store to apply taxes accordingly.

Determining Tax Liability

Physical Nexus

Physical nexus arises when a merchant has a tangible presence in a state, such as a store, warehouse, or employees. The state in which your store is based establishes physical nexus. Factors contributing to physical nexus may include solicitation of sales, fulfillment services, or the presence of inventory. Merchants unsure about activities outside their state constituting physical nexus should consult state tax authorities or a local tax professional.

Economic Nexus

Economic nexus rules apply to all merchants with customers in the United States, irrespective of physical nexus. This occurs when a merchant surpasses a defined sales threshold to customers in a specific state. The Supreme Court’s June 2018 ruling empowers states to require online sellers to collect sales tax based on transaction volume or value (economic nexus). Refer to the state tax reference table to determine sales thresholds for economic nexus in each state.

Digital Products

Some states include digital products in determining economic nexus, while others do not. The state tax reference table provides state-specific information on the inclusion of digital products in nexus calculations.

Marketplaces

Certain marketplaces are considered in economic nexus calculations, depending on state laws. Notable marketplaces include Emadri, MyDeal, Rakuten, Etsy, Fruugo, Wish, NewEgg, BestBuy, Reverb, eBay, Google, Facebook, Walmart Marketplace, Amazon by Codisto, and Amazon by CedCommerce.

Dropshipping

For businesses using dropshipping, tax obligations depend on the location of the customer and nexus with the dropshipping vendor. Various scenarios apply, and merchants should review their responsibilities based on their specific circumstances.

Registering for Taxes

Register with the respective state tax authorities once you identify where tax charges are necessary. Refer to the state tax reference table for state-specific contact information.

Setting Up Taxes in ShopRise

Configure your ShopRise store to manage tax rates automatically and set up tax overrides for products with special tax rates. For detailed instructions, refer to the “Setting up US taxes” section if you are new to ShopRise or the “Registration-based taxes in the US” section if you need to update existing settings.

After your store begins making sales, the “Manage tax liability” page assists in determining nexus regions.

In conclusion, this guide equips ShopRise merchants with a comprehensive understanding of US tax obligations. For further assistance or inquiries, explore the US taxes reference section or consult with ShopRise support.

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