Does Shopify File Sales Tax Returns? | Shopify Tax Filing Guide

Shopify does not automatically file sales tax returns for you. While Shopify helps you collect and report sales tax from your customers based on your store’s tax settings, it is your responsibility as a merchant to file and remit those taxes to the appropriate state or local tax authorities. However, Shopify does integrate with third-party tax filing services that can automate this process.

If you want to automate your sales tax filings, you can connect your Shopify store to services like Shopify Tax (US only, for calculation and reporting), TaxJar, or Avalara. These services can handle filing and remittance for you, but require setup and may involve additional fees.

Step-by-Step Instructions

1. Set Up Sales Tax Collection in Shopify

   • Log in to your Shopify admin.
   • Go to Settings > Taxes and duties.
   • Add the regions (states or countries) where you need to collect sales tax.
   • Enter your tax registration numbers as required.
   • Shopify will now collect the correct sales tax on eligible orders.

2. Export Tax Reports for Filing

   • In Shopify admin, go to Analytics > Reports.
   • Select the relevant sales tax report (e.g., "Sales tax report").
   • Export the report as a CSV to use for manual filing.

3. Automate Sales Tax Filing (Optional)

   • Choose a tax automation service (e.g., TaxJar, Avalara, or Shopify Tax for US merchants).
   • Sign up for the service and follow their instructions to connect your Shopify store.
   • Configure your filing preferences and let the service handle filings and payments on your behalf.

Before You Start

• Understand Your Tax Obligations: Research where you have sales tax nexus and registration requirements.
• Register with Tax Authorities: You must have valid sales tax permits before collecting and remitting tax.
• Backup Your Data: Regularly export your sales and tax reports for your records.
• Third-Party Fees: Automated filing services usually charge additional fees not included in your Shopify plan.

Alternatives to This Action

• Manual Filing: You can manually file sales tax returns using the reports exported from Shopify.
• Hire a Tax Professional: If your tax situation is complex, consult a CPA or tax advisor familiar with ecommerce.

Shopify simplifies tax collection but does not file returns automatically. Consider integrating a tax automation service for easier compliance, or work with a tax professional for manual filings.

FAQs

Q: Does Shopify automatically remit sales tax to states?

No, Shopify does not remit sales tax to states on your behalf. You are responsible for filing and paying any collected taxes to the relevant tax authorities.

Q: Can Shopify help calculate sales tax for my store?

Yes, Shopify can calculate and collect sales tax based on your store's settings and the regions where you are registered. However, you must still file and remit these taxes yourself.

Q: What tax automation services integrate with Shopify?

Popular services like TaxJar and Avalara integrate with Shopify to automate sales tax calculations, filings, and payments. Shopify Tax also offers enhanced reporting for US merchants.

Q: Do I need to register for a sales tax permit before collecting tax on Shopify?

Yes, you should register for a sales tax permit in each state or region where you have nexus before collecting or remitting sales tax through your Shopify store.