Shopify makes it easier for US ecommerce sites to manage taxes

Shopify has added a new tool to its offerings in a bid to simplify some of the managing processes facing sellers in the US.

Shopify Tax includes a feature that helps to highlight when a business in the US is liable, as well as a solution for ecommerce platform owners to be able to collect the right amount of tax at the right time.

Focusing on SMBs, the sales tax calculation tool is free for online store owners’ first $100,000 in sale each year, and after that, there’s a transaction fee that will apply per order in jurisdictions where taxes are collected. 

Easy on the tax

Shopify Tax also provides sales tax insights that give merchants a clear view of their current and upcoming tax calculations.

Vibhor Chhabra, head of tax products at Shopify, says the tool will be completely free for the remainder of 2022, regardless of how much a business sells.

“Our long-term goal is to build a truly end-to-end solution for your business. Today, we’re starting out by focusing on two areas: knowing when you’re liable and calculating and collecting tax,” he says.

“At Shopify, we actively monitor the most common and pressing requests we get from merchants. 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.”

The Shopify Tax tool also notifies merchants regarding significant changes in the tax world that might impact their business, and advises on the best action to move forward. Chhabra also mentions that Shopify deciphers the 11,000+ US sales tax jurisdictions so merchants don’t have to.

The tool also includes a product categorization feature that helps merchants ensure they are collecting the right tax rates on products by suggesting the tax category that best fits each item on their site.

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