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Shopify Launches Tool to Help Merchants Manage Sales Tax

Shopify Launches Tool to Help Merchants Manage Sales Tax

Ecommerce platform Shopify launched a tool to help merchants manage their sales-tax collection obligations – and the company said it was just the beginning. Its long-term goal is to build a complete end-to-end sales-tax solution for sellers.

A spokesperson for the company told us that as of today, October 12th, all Shopify merchants doing business in the US can use a new feature called sales tax insights to stay on top of their state-level requirements. And in the coming weeks, it will provide additional benefits.

A blog post outlined Shopify Tax’s initial offerings:

“Today, we’re starting out by focusing on two areas: knowing where you’re liable and calculating and collecting tax. Why start here? At Shopify, we actively monitor the most common and pressing requests we get from merchants like you. This information helps us decide what to build next and learn about whether our products or alternatives are meeting your needs. These two areas consistently appeared at the top of those lists. Additionally, these solutions provide a universal benefit for all merchants regardless of size, industry, or tax expertise.”

Initially the tool is free for everyone through the end of the year. Use of the new sales-tax calculation tool is free for sellers for their store’s first $100,000 in sales each year. After that, a transaction fee will apply per order in jurisdictions where taxes are collected.

Shopify told EcommerceBytes merchants are tired of not knowing how to correctly collect taxes and of getting blindsided with charges when it comes time to file each year.

She outlined Shopify Tax’s key features:

  • Sales tax insights: Merchants can track which tax obligations are coming and where they are liable, so they can avoid being caught off guard. Sales tax insights will also notify merchants which states they are required to pay taxes in, and which state thresholds they’re approaching.
  • Product categorization: Shopify helps merchants ensure they are collecting the right rates by suggesting the tax category that best fits their product.
  • Tax rates with rooftop precision: With rooftop precision, merchants can apply the right taxes at the right time, with calculations based on the customer’s precise address. Shopify deciphers the 11,000+ U.S. sales tax jurisdictions so merchants don’t have to.

Shopify also notifies merchants of significant changes in the tax world that might impact their business and advises them on the best action moving forward, she said, and said Shopify also integrates with ecommerce tax apps so that merchants can use a compliance solution that works best for them.

More information is available on Shopify.com.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.

One thought on “Shopify Launches Tool to Help Merchants Manage Sales Tax”

  1. After many years of hosting on Shopify and paying over $100/month for basic functionality, I switched to Woo. There was never any additional or improved service for that monthly. You always have to add a $$ plugin for any changes in regulations (i.e., gdpr, ADA), the market, or customer expectations. On top of that, their corporate still counts my inactive account for their investors. Not sure why they’re offering this, since several of their plugin developers offer similar, but there’s no way it will be free.

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