Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
SALES TAX BOOT CAMP FOR SHOPIFY
SELLERS
Your Guide to Getting Sales Tax Compliant
with LIZZY GREENBURG
Put a lid on sales ...
GOALS
• Cover some tax basics
• Connect sales tax to Shopify
• Share next steps
• Resources for help in the future
• Quest...
3
QUICK INTRO:
• Passion: using tech to solve
problems for small business!
• Shopify Seller since 2011
• CA and TX Sales T...
WHO WE TALK WITH EVERY DAY
• People making a living online
• Multi-channel sellers
• Want to be educated
• Trying to deter...
”
“
“I want sales tax
to go away!”
3/2/16Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 5
– Average...
SALES TAX BASICS
Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 6
CHAOS PREVAILS
• No federal laws or governing body (yet)
• 45 states (and DC) = 46 sets of laws
• Nexus
• Taxability
• Rat...
8
WHAT’S TAXABLE?
• Tangible items are taxable
• Common exceptions are clothing and food
• Services are mostly not taxable
•...
PASS-THROUGH TAX
• Pay what you collect
• Never pay out of pocket!
• Sellers are ‘collection agents’
Copyright © 2016 TaxJ...
AUTOMATE!
Starting is the hardest part
Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 17
WHAT THE HECK IS NEXUS?
Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 18
NEXUS IS WHEN/WHY YOU CARE
Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 19
A presence / connectio...
WHAT’S THE RIGHT TIME TO
COLLECT SALES TAX?
Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 27
GOLDEN RULE OF COLLECTION
Collect sales tax when the item sold is shipped
to a state where you have nexus
Copyright © 2016...
MEET JOE SELLER
• Based in Akron, OH
• Only has nexus in OH
• Complying in 1 state
Akron, OH Lakewood, OH
Collect sales tax
NEXUS SALE
Collect sales tax
REMOTE SALE
3/2/16Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc.
Boston, MAAkron,...
Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc.
HOW MUCH SALES TAX
SHOULD I COLLECT?
Copyright © 201...
COLLECTION LOGIC: SOURCING
• State where item is shipped determines tax rate
• Tax rate usually = sum of applicable rates
...
ORIGIN VS. DESTINATION SOURCING
• Origin-based state
• Tax rate = seller’s location
• One rate for entire state
• Destinat...
35
36
Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc.Copyright © 2015 TaxJar. TaxJar is a trademark of TPS...
TAX COLLECTION IN SHOPIFY
• Shopify has a free tax collection service
• Can collect in multiple states
• Tax collection is...
RECOMMENDED SETTINGS
• Select “I want to specify taxes automatically.”
• Separate sales tax from the cost of the item
• (I...
If You’re selling multi-channel on Amazon...
• YOU have to enable collection in Seller Central
• Amazon will NOT tell sell...
Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 41
FILING RETURNS
Copyright © 2015 TaxJar. TaxJar is...
HOW OFTEN DO I FILE?
● Filing deadlines usually tied to sales volume
• The more you collect, the more often you pay
● Freq...
FILING TO THE STATES
• Combine and file a single return per state
• Not separate returns per channel
• File zero returns!
...
PAY ON TIME = $$
Some states have discounts
for on-time payment
• Generally between 1-2%
• It’s free money!
Copyright © 20...
PAY MORE IF YOU’RE LATE
All states have penalties for late payment
• Booo!
• Late payment charges
• Interest on what wasn’...
FILING IN DESTINATION STATES
• Huge pain!
• States rely on you to divide up the money collected
• Calculate taxable sales ...
47
CA SCHEDULE B
3/2/16 48
HOW ARE YOU FEELING?
Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 49
3/2/16 50
WHAT DO I DO NOW?
3/2/16Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 51
Head-in-the-sand is not an option
Best effort > no effort
Don’t drain your
resources trying to
comply
HOW DO I GET STARTED?
3/2/16Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 55
START COLLECTING AT HOME
1. Comply in your home state
• Register for a sales tax license
• Enable sales tax collection
• P...
Sign Up for a Free 30-Day Trial
57Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc.
WHAT ARE YOUR SALES & TAXES COLLECTED BY STATE?
HOW MUCH SALES TAX DID YOU COLLECT BY JURISDICTION?
3/2/16Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited,...
WHERE DO YOU HAVE NEXUS?
January 11, 2016Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 61
INTEGRATIONS
Thousands of happy customers, including...
Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 63
Helpful resources
64
youtube.com/taxjar
For visual learners
salestaxcommunity.com
Talk with 5,000 other store owners and t...
CALL US!
855-800-6681
Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 65
• 30-day free trial (no credit card required)
• Monthly or annual subscriptions
• Pricing based on transaction volume
• St...
3/2/16Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 67
WE LOVE QUESTIONS!
WHAT ARE YOUR SALES & TAXES COLLECTED BY STATE?
QUICK INTRO:
• Passion: using tech to solve
problems for small business!
• Founded TaxJar in 2013
• Not a CPA or tax profe...
Sales Tax Bootcamp for Shopify Store Owners
Sales Tax Bootcamp for Shopify Store Owners
Sales Tax Bootcamp for Shopify Store Owners
Sales Tax Bootcamp for Shopify Store Owners
Sales Tax Bootcamp for Shopify Store Owners
Sales Tax Bootcamp for Shopify Store Owners
Sales Tax Bootcamp for Shopify Store Owners
Sales Tax Bootcamp for Shopify Store Owners
Sales Tax Bootcamp for Shopify Store Owners
Sales Tax Bootcamp for Shopify Store Owners
Sales Tax Bootcamp for Shopify Store Owners
Sales Tax Bootcamp for Shopify Store Owners
Sales Tax Bootcamp for Shopify Store Owners
Sales Tax Bootcamp for Shopify Store Owners
Upcoming SlideShare
Loading in …5
×

Sales Tax Bootcamp for Shopify Store Owners

Learn the basics of sales tax collection and remittance for Shopify from industry expert Lizzy Greenburg of TaxJar. This webinar will take the mystery out of a complex topic with serious financial implications for your business.

Mark will cover when Shopify store owners must collect sales tax, how to determine how much sales tax to collect, and what changes if the current federal sales tax legislation passes.

After “Sales Tax Bootcamp,” you will be armed with the tools and resources to take charge of this complicated part of your business.

Related Books

Free with a 30 day trial from Scribd

See all

Related Audiobooks

Free with a 30 day trial from Scribd

See all
  • Be the first to comment

Sales Tax Bootcamp for Shopify Store Owners

  1. 1. SALES TAX BOOT CAMP FOR SHOPIFY SELLERS Your Guide to Getting Sales Tax Compliant with LIZZY GREENBURG Put a lid on sales tax.
  2. 2. GOALS • Cover some tax basics • Connect sales tax to Shopify • Share next steps • Resources for help in the future • Questions!! (use the chat section to the left) Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 2
  3. 3. 3 QUICK INTRO: • Passion: using tech to solve problems for small business! • Shopify Seller since 2011 • CA and TX Sales Tax payer since 2004 • Not a CPA or tax professional • Talked to thousands of online sellers, pros, auditors, states • Here to help you make informed decisions
  4. 4. WHO WE TALK WITH EVERY DAY • People making a living online • Multi-channel sellers • Want to be educated • Trying to determine where they have nexus • Sales tax is being collected in different accounts • Filing returns is a frustrating, waste of time Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 4
  5. 5. ” “ “I want sales tax to go away!” 3/2/16Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 5 – Average TaxJar Customer
  6. 6. SALES TAX BASICS Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 6
  7. 7. CHAOS PREVAILS • No federal laws or governing body (yet) • 45 states (and DC) = 46 sets of laws • Nexus • Taxability • Rates • Due dates Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 7
  8. 8. 8
  9. 9. WHAT’S TAXABLE? • Tangible items are taxable • Common exceptions are clothing and food • Services are mostly not taxable • Are the tides changing? • Shipping, gift wrapping can be taxable Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 9
  10. 10. PASS-THROUGH TAX • Pay what you collect • Never pay out of pocket! • Sellers are ‘collection agents’ Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 16
  11. 11. AUTOMATE! Starting is the hardest part Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 17
  12. 12. WHAT THE HECK IS NEXUS? Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 18
  13. 13. NEXUS IS WHEN/WHY YOU CARE Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 19 A presence / connection in a state that’s significant enough for you to be required to comply with their sales tax law
  14. 14. WHAT’S THE RIGHT TIME TO COLLECT SALES TAX? Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 27
  15. 15. GOLDEN RULE OF COLLECTION Collect sales tax when the item sold is shipped to a state where you have nexus Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 28
  16. 16. MEET JOE SELLER • Based in Akron, OH • Only has nexus in OH • Complying in 1 state
  17. 17. Akron, OH Lakewood, OH Collect sales tax NEXUS SALE
  18. 18. Collect sales tax REMOTE SALE 3/2/16Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. Boston, MAAkron, OH
  19. 19. Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. HOW MUCH SALES TAX SHOULD I COLLECT? Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 32
  20. 20. COLLECTION LOGIC: SOURCING • State where item is shipped determines tax rate • Tax rate usually = sum of applicable rates • State • Local • Other (i.e., education, transportation) Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 33
  21. 21. ORIGIN VS. DESTINATION SOURCING • Origin-based state • Tax rate = seller’s location • One rate for entire state • Destination-based state • Tax rate = where item is shipped • Variable rate Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 34
  22. 22. 35
  23. 23. 36
  24. 24. Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc.Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 37 RUNNING A SHOPIFY STORE & SALES TAX
  25. 25. TAX COLLECTION IN SHOPIFY • Shopify has a free tax collection service • Can collect in multiple states • Tax collection is based on zip code • To activate, go to SETTINGS > TAXES > TAX RATES • Enter your location’s city and zip • Be sure to collect in every state you have nexus Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 38
  26. 26. RECOMMENDED SETTINGS • Select “I want to specify taxes automatically.” • Separate sales tax from the cost of the item • (If outside the US) You can select ‘charge taxes on shipping’ where applicable • Set your tax overrides • Treat clothing and food differently • Avoid collecting tax when you don’t have to • You can even specify a tax rate by ‘collection’ Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 39
  27. 27. If You’re selling multi-channel on Amazon... • YOU have to enable collection in Seller Central • Amazon will NOT tell sellers • How to collect in FBA states (TaxJar will) • Where to collect (TaxJar will) • Easy to collect ‘wrong’ • Collecting only state tax in a destination-based state Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 40
  28. 28. Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 41 FILING RETURNS Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc.
  29. 29. HOW OFTEN DO I FILE? ● Filing deadlines usually tied to sales volume • The more you collect, the more often you pay ● Frequencies: annual, semi-annual, quarterly, monthly ● Deadlines typically fall on 15-30th of the month Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 42
  30. 30. FILING TO THE STATES • Combine and file a single return per state • Not separate returns per channel • File zero returns! • When you’ve collected $0 in sales tax Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 43
  31. 31. PAY ON TIME = $$ Some states have discounts for on-time payment • Generally between 1-2% • It’s free money! Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 44
  32. 32. PAY MORE IF YOU’RE LATE All states have penalties for late payment • Booo! • Late payment charges • Interest on what wasn’t paid Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 45
  33. 33. FILING IN DESTINATION STATES • Huge pain! • States rely on you to divide up the money collected • Calculate taxable sales & sales tax collected by jurisdiction • Gets worse if you’re multi-channel Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 46
  34. 34. 47 CA SCHEDULE B
  35. 35. 3/2/16 48
  36. 36. HOW ARE YOU FEELING? Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 49
  37. 37. 3/2/16 50
  38. 38. WHAT DO I DO NOW? 3/2/16Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 51
  39. 39. Head-in-the-sand is not an option
  40. 40. Best effort > no effort
  41. 41. Don’t drain your resources trying to comply
  42. 42. HOW DO I GET STARTED? 3/2/16Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 55
  43. 43. START COLLECTING AT HOME 1. Comply in your home state • Register for a sales tax license • Enable sales tax collection • Pay and file 2. Think about your nexus... Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 56
  44. 44. Sign Up for a Free 30-Day Trial 57Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc.
  45. 45. WHAT ARE YOUR SALES & TAXES COLLECTED BY STATE?
  46. 46. HOW MUCH SALES TAX DID YOU COLLECT BY JURISDICTION? 3/2/16Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 59
  47. 47. WHERE DO YOU HAVE NEXUS?
  48. 48. January 11, 2016Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 61 INTEGRATIONS
  49. 49. Thousands of happy customers, including... Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 63
  50. 50. Helpful resources 64 youtube.com/taxjar For visual learners salestaxcommunity.com Talk with 5,000 other store owners and tax pros! blog.taxjar.com Content just for ecommerce & sales tax
  51. 51. CALL US! 855-800-6681 Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 65
  52. 52. • 30-day free trial (no credit card required) • Monthly or annual subscriptions • Pricing based on transaction volume • Starts at $19/month for 1k transactions • $19.95 per AutoFile return Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 66 Start a FREE 30-Day trial
  53. 53. 3/2/16Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 67 WE LOVE QUESTIONS!
  54. 54. WHAT ARE YOUR SALES & TAXES COLLECTED BY STATE?
  55. 55. QUICK INTRO: • Passion: using tech to solve problems for small business! • Founded TaxJar in 2013 • Not a CPA or tax professional • Talked to thousands of online sellers, pros, auditors, states • Here to help you make informed decisions Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 69

×