Shopify makes it easier for US ecommerce sites to manage taxes
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Shopify (opens in new tab) has added a new tool to its offering in an effort to simplify some of the management processes faced by merchants in the US.
Shopify Tax includes a feature that helps highlight when a business in the US is liable, as well as a solution for: ecommerce platform (opens in new tab) owners to collect the right amount of tax at the right time.
The VAT calculation tool is aimed at SMBs and is free for online store owners who have their first $100,000 in sales each year, and after that there are transaction fees that apply per order in tax-collecting jurisdictions.
Easy on the tax
Shopify Tax also provides tax insights that give sellers a clear picture of their current and future tax calculations.
Vibhor Chhabra, head of tax products at Shopify, says the tool will be completely free for the rest of 2022, regardless of how much a company sells.
“Our long-term goal is to build a true end-to-end solution for your business. Today we start by focusing on two areas: knowing when you are liable and calculating and collecting taxes,” he says.
“At Shopify, we actively monitor the most frequent and urgent requests we receive from sellers. This information helps us decide what to build and find out if our products or alternatives will meet your needs. These two areas were consistently at the top of those lists.”
The Shopify Tax tool also notifies merchants of important changes in the tax world that could affect their business, and advises on the best course of action to proceed. 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 sellers ensure they are collecting the correct tax rates on products by suggesting the tax category that best fits each item on their site.