MAJOR UPDATE: How to Pay Tax When Dropshipping (How to Pay Sales Tax with Shopify)

IMPORTANT: Please watch our updated video on how to pay sales tax when dropshipping.
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DISCLAIMER: We are not CPAs, accountants or lawyers. This is NOT official legal advice!
In this updated video, Sarah discusses what your tax obligations are as a dropshipper after the Wayfair vs. South Dakota Supreme Court ruling. This video is relevant for the following types of sellers:
They are sourcing items from Chinese dropshippers, such as Aliexpress dropshippers.
They are selling to customers that are based in the USA.
Please note, on this channel we only focus on teaching new dropshippers how to focus on the USA market, which is why we will only discuss your tax obligations when selling to USA based customers.
**What Taxes Do I Need to Pay?**
When dropshipping you there are 2 types of taxes to pay:
1) Income tax
2) Sales tax
**Who Do I Pay Income Tax To?**
You pay income tax to your local government/governing body. So if you live in Australia, you will always pay your income tax to the Australian government. It doesn’t matter if your customers are based in the USA: you do not pay income tax to the USA government, you would pay it to the Australian government.
**Do I Need to Collect and Pay Sales Tax?**
In the USA, it is states that you need to collect and pay sales tax to - not the federal USA government. Previous to June 2018, there was a law in the USA that meant that you had to have nexus in a state before you were required to collect and pay sales tax in it. Nexus is a legal term that means you have a sufficiently large physical presence in a state to be eligible to collect and pay sales tax.
For example, if you lived in Arizona then that would be a very large physical presence, and so you would have nexus in it. If a customer comes to your dropshipping store and purchases a mug from you, you would be required to collect and pay sales tax on that order. The sales tax rate in Arizona in 5.6%. You could need to collect this tax on the order and pay it to the Arizona state.
Now let’s imagine that a customer from Texas came to your store. Because you didn’t live there (or have any physical presence in Texas), this means that you didn’t have nexus in Texas. That meant that you were not required to collect sales tax on that order and pay it to the Texas state.
This also meant that if you were not a USA citizen that you usually did not have nexus in any state, and thus didn’t have to collect/pay any sales tax at all.
However, in June 2018 a Supreme Court ruling (South Dakota vs. Wayfar) changed this. It abolished this law and said that states can now require large out-of-state vendors to have to collect and pay sales tax. So… does this mean that you now have to collect and pay it even if you don’t have nexus?
NO! It doesn’t. To be required to collect and pay it, the following needs to happen:
1) A state needs to pass a law which overrides the baseline nexus law (most states have not passed a bill yet).
2) You will need to be a large vendor (the current baseline is doing $100,000+ sales in a single state, or 200+ transactions in a year).
For most established stores, this means that they will likely only have to start collecting and paying sales tax in a small percentage of states - likely the large ones such as New York City.
BUT, if you are a new dropshipper then you do not need to worry about this until you start making a lot of money and making a lot of sales. For now, you only need to collect and pay sales tax on orders made in states that you have nexus in (which for most people, will only apply to the state that they live in). For states to legally pass a bill that targets small vendors, a new Supreme Court case will be required.
Want to find out how to start collecting sales tax on your orders in Shopify? Watch the video to see Sarah’s step-by-step tutorial on how to pay sales tax with Shopify!

[@WholesaleTed]

So... what is YOUR opinion on the new court ruling? Are you a YAY or a NAY?

[@WholesaleTed]

Ah... my New Zealand accent!

[@WholesaleTed]

Hi Haval. As long as you can open a PayPal business account, you can start a store. If you can't open a PayPal business account I don't recommend it.

[@marioStortuga]

Makes no difference to me. Sales tax is paid by the customer ;)

[@scotttovey]

I don't like the wording of the law. $100,000 or 200 sales. That means a person that sells 200 $1.00 items has to pay sales tax in that State. That would be a loss of whatever percentage the sales tax is. The first year with that many transactions, they will have to eat the sales tax themselves if they did not anticipate that many orders. You can't go back and charge sales tax after the customer has paid the bill. Not only is it illegal, it's bad business policy.

[@WholesaleTed]

I definitely agree with this. I think that 200 transactions was too few. I understand the need for sales tax to be charged to out of state vendors, but think the transaction threshold should be higher. One thing that is good in the USA though is that more than half the population live in just 10 states, so that is where the bulk of your transactions are likely to from even for most successful, established store.

[@EileenTheCr0w]

Launched my store a few days ago and attempting to follow most of your advice.. still waiting on that first sale, wish me luck!

[@AlonzoLombardi]

How is it going?

[@piecesofme8531]

Good luck. 🍀👍🏾Do you still need that luck???

[@ilia9401]

Hey what happened 😊 how's your progress going?

[@josueabarca1913]

Eileen the Crow how’s it going with your store?

[@parkerjohnson5270]

update?

[@DavidTheDave]

Thanks very much for this. So well done. I love the way you don't make any assumptions about anyone's knowledge of state and federal taxes. It clarifies many questions I had as an Australian seller. I really appreciate the effort you put into these videos.

[@chadbest5445]

When you said at around 9:30 in the video that the only way you will have nexus in a state is if you own property or live in the state, this is not accurate. You establish nexus by meeting the threshold that each state has decided establishes nexus. In South Dakota, the threshold is $100,000 in annual sales or 200 transactions. In Oklahoma, it is a much lower threshold at $10,000 in annual sales. The whole point of this Supreme court case was to get rid of the previous "physical presense" rule previously defined in the Quill v North Dakota decision.

[@castingcauldron6578]

I made a Shopify store in 2019 following your tutorial. I did not set it live as I could not afford it. I have had businesses before and I wondered about tax. I recently followed your tutorial again and made a new store following your tutorial all the way to the end. My store now is very nice and now it is live!. I do wish you would have mentioned going to watch this tutorial or something about taxes which I don't recall at all in that tutorial. I've watched it at least half a dozen times. Everything is great but I just didn't see you referring to this video so we knew how to set up tax. I have now gone to settings and set up taxes which was really easy in this new version and I'm now collecting tax in the state where I live which is by the way South Dakota!! 😃 I do appreciate all the information you did share on the tutorial so that I could get it built. 😊

[@mndoglovertv8302]

Thanks for the vid...gonna sell some merch with music downloads and using a drop shipper...watched five videos from tax accountants and got nothing out of them but a killer headache...you were the only one who could explain this in a fashion that made sense...much appreciated :-)

[@wendylim6500]

thank god that there is finally someone who is talking clearly about paying or not to need to pay sales tax with shopify here ! thanks a lot!

[@WholesaleTed]

Thank you Wendy :) I've been talking about it for a few years now, but you're right: it's information that is not often discussed!

[@Venhonias]

Very great, informative Video, Sarah! More of those are needed on KZbin instead of clickbait "I made over 10,000$ in 24 hours".

[@DReed1945]

I love that you call us Teaxas because we do enjoy our tea.

[@EileenTheCr0w]

This stuff is so draconian and overly complicated. Sales tax should just apply to all sales based on where the stores owner lives. Then the states would be more competitive too trying to brand themselves as eCommerce hubs.

[@GreyGhost-r4z]

I have been sitting here for all morning freaking out how on earth I will keep track of all 50 states taxes as well as individual Counties and make payments to each state, when I haven't even started my store yet. Great video.

[@annkrav8654]

The video is outdated in 2020. Now you do have to do all of that once you reach 200 sales in a year.

[@WholesaleTed]

That is not true, you have left this reply multiple times to different people, and I do understand you are trying to help others, which is very admirable, but since this statement isn't true, it is further adding to confusion that a lot of people have about sales taxes 🙏 each state has their own economic nexus threshold. Some states have a 200 sales threshold, some states require a sales threshold, such as $100,000 or $500,000 in sales for a year. Some states require you to meet 2 thresholds. Some states have no economic nexus at all if you live out of state, and some states do not even have sales taxes. Please do not spread misinformation in the comments section stating things like this as fact, that if you make 200+ sales in any state, you have economic nexus in that state, because this is not true. 🙏

[@annkrav8654]

@@WholesaleTed I heard you mentioned in one of the videos that most probably most of our sales will come from a couple of big states. This is relieving on one hand, meaning that a tiny seller will have to do paperwork only for several states and not all of them. On the other hand, it's concerning, since it will be easier to reach the treshold of 200 sales in a specific state. But I checked some big ones like California and Texas and see that their law has only revenue theshold (quite high), not transactions treshold. Which is great! But please please please, can you do an updated video on taxes? This will be so useful to all your viewers. IRS are serious guys to deal with, they will hunt you down at the bottom of the ocean, even for $1 I guess) This is an important part of the business and the scary one for a tiny avergage Joe, as opposed to the fun part finding products and marketing them) Thank you for this incredible channel and for the ecommerce clubhouse one! It makes this whole undertaking sound like a detailed and fun plan) Except for this taxes thing >_

[@Uriel.47AC]

None of this shit you spewed out is true, go eat up wholesale's reply, eat em up!

[@Uriel.47AC]

@@WholesaleTed go get em girl!

[@leochan6239]

I always come back for this video when I forgot about the sales tax requirements, so educational, thanks Sarah!

[@moechuckka]

Finally! Someone finally speaks on the TAXES topic, unlike all these teens that will eventually get caught up with the IRS down the road lol

[@alexanderdow5347]

Thank you for clarifying this, Sarah! You're the bestest!

[@3PairDesigns]

Sarah, once again, thank you for simplifying that. I was actually reading the HELP section in Shopify and got a little bit lost. You decoded it nicely, so thank you! BTW, I think that the US collects enough taxes! So my opinion on the ruling was NAY! Thank you again! :-)

[@XarahDax]

I remember seeing your other tax video, where you mention the word Nexus at least 4000 times and I got a headache. This one is so much better. I finally understood!

[@ashwinipurandare9121]

hey Sarah, how are you today? Hope everyone is safe. Thank you for your videos. Can you please make a new tax update on POD sellers selling on etsy? Sometimes etsy and printful both deduct sales tax and the seller has no idea what to do. Could you please make a video on 2021?

[@justbored3.14]

i keep hearing Texas. I'm from Texas it sounds cute when you say it

[@hansolo1935]

Tex, Texus, Nexus.. I'm getting confused

[@mr.f4832]

i also heard texas

[@bwpyrotechnics1272]

Nexus basically means your presence in the state (any state). So, there's physical and economic presence. Physical presence means that you have any physical/material presence in state (for example, warehouses, employees, house etc). Economic presence means that you have crossed state threshold which is roughly 100k$ in profit or 200 transactions (may vary in each state). When you cross any of these 2, 100k$ or 200 transactions, that means you have to collect and remit SALES tax in that state. I have LLC in US, but I'm not from US. That means I don't have to worry about physical presence (I'm dropshipper, no warehouse nor employees). But I have to worry about economic nexus, which is 100k in profit or 200 transactions. Hope you understand it now :)

[@MsMarytips]

You should’ve made the video 👍

[@lenmixx6209]

@@bwpyrotechnics1272 Thank you 🙏

[@bwpyrotechnics1272]

@@lenmixx6209 You're wellcome🤜🤛

[@rickhoffman1167]

Your videos are always full of value bombs and well organized and researched. You put everything simply for us all and have great visuals. And you don't even live in the states...unreal!! I totally value your channel, Sarah! Much appreciate...TY!

[@valentinvladimirov3011]

Yo you girl just saved my enthusiasm about dropshipping ❤️

[@mrf8514]

You explained taxes and the recent court ruling very well. There should be no thumbs down on this vid. Something that new US entrepreneurs are not aware of is that we have to pay double federal tax on our profits. When an employee works for an employer, the employer has to pay a portion of the tax of the employee's wages. As a self-employed individual, this tax the employer would owe is still collected but called self-employment tax. And self-employed individuals can claim a loss. But I think after two or three years of claiming a loss it's possible the Fed Govt can claim you don't have a business but a hobby. I saw a vid a several months back by a lady who kept meticulous track of all her expenses and profits each month and invested every dollar back into her business in the form of inventory by December 31st. By doing that she "broke even" and therefore claimed zero profit, and subsequently paid no tax for the year. There's another entrepreneur who invests his profits into purchasing websites that are already producing a cash flow because not only does he then have another passive income stream, he also gets to write off the entire purchase cost (@$50,000) on his taxes for the year - which offsets his tax liability for the year greatly. I'm keeping both of these methods in mind as I start and grow my business.

[@WholesaleTed]

My guess is that the thumbs downs are from people finding a video on taxes to be boring/dull!

[@craigme2583]

I so need to understand how to pay tax in 50+ states in us Sarah you are an absolute Gem!

[@lilmzlondon]

I really enjoy your video, they are amazing - i was wondering if you could do and update Tax 2021 videos - as i am starting this year, I'm wondering what has changed

[@ashleybirch93]

This is great information. I was worried id have to charge 20% vat because I live in the UK, that was pushing the product price a bit too high for my liking. Glad it's based on sale location instead. Thank you for the information

[@EileenTheCr0w]

That one comment saying "who would pay for the roads, schools, etc.?" The same people that pay for them now, the citizens. Except we'd pay a lot less and get better results. Btw roads are often paid for privately, same with schools and hospitals in the US. If we just cut out the rest of the taxes that go to those things we could have better private schools, roads that get fixed quickly and cheap, etc. Idk why people can't fathom a world where you paid more things directly instead of sending $100 to the govt and then getting $40 back to be spent by other people for you.

[@Shazzzam74]

One thing that I learned at a Tax conference was that if you live in Texas for example and you have merchendise at an Amazon location in let say California then you also have nexus in California. Their were a lot of people in my industry that were getting bit with back taxes because they assumed that because they didn't live there it was ok not to pay. Like Sarah said do your own research and make sure you know the laws. This of course only applies if you live in the States.

[@robynmasters335]

Thanks to South Dakota vs Wayfair, more and more states with "Economic Nexus" allowing them to tax remote transactions. A small few states have Cookie/software Nexus. As of January 1st 2019, there are about 29 states with what is called "Affiliate or Click Through Nexus". If you are a US citizen drop shipping to people in these states, you will still be required to register in all 29 of these states. You can file with them individually or use some company like Avalara to help you file all the correct forms. I also recommend some sort of tax calculation plugin to help automate your calculations for each area. A good CPA can help you with all of this.

[@joshnelson1883]

4:54 I know I didn’t just read “Orgeon” 😐

[@CameronAlford]

THANK YOU FOR THIS. YOU ARE AMAZING and keep it down to earth and easily applicable information to individuals. keep doing you!!!!!!

[@mfarrell123456]

If you have products stored in a state than you have Nexus and must collect and pay sales tax. If you have an Amazon store and Amazon is storing you merch than you have Nexus in every state that you merchandise is warehoused. That could be a lot of states. In some states like California the sales tax is different in different cities. If you live in California and your warehouse is in a different city, use the city that you live in. If this is wrong let me know.

[@DidiGrooves]

You're absolutely right. This video is outdated. I use printful and live in NY and have three places with nexus where I must report to: NY, CA and NC bc Printful has offices and warehouses in the latter two. My first time filing with NY is coming up shortly.

[@remusremeczan709]

You're great! I have been living in the EU and I have been looking for this information for 2 weeks, I can't thank you enough.(PS: i love your accent)

[@bwpyrotechnics1272]

God bless you Sarah❤ I was searching for hours, but this video is all I needed. Thank you x1000👌

[@robertorodrigues6459]

Best tax explanation I've seen regarding dropshipping and ecommerce. Clear and objective. Congrats!

[@emilyworkman]

You have to register for a sales tax permit if you have Nexus in the state of Utah. Pain in the ass as you have to know the following before you can get a sales tax # (plus you need an FEIN if you have employees)...: 1. The business entity type. e.g., Corporation, Limited Liability Company, Sole Proprietorship, etc. question 2. The proposed name of your business. This system will perform a lookup against existing business names and will allow you to request the name you have in mind, if it is available. If the name is unavailable, you will need to select another name before you can complete your registration. question 3. Date the new business is going to start in Utah. 4. Date of the first payroll in Utah. 5. Names, addresses, phone numbers, FEIN's and SSN's or TIN's of proprietors, partners, corporate officers, LLC members and Registered Agent. NOTE: This service requires an electronic signature by at least one principal. Principals must be 18 years of age and above. This can be completed by having at least one principal electronically sign this application, or by having a Power of Attorney, or Attorney-in-Fact electronically sign this application. The business location(s). 6. Brief description of the business activity. 7. Name and telephone number of person submitting the registration. 8. Forms of Payment (American Express, Discover, MasterCard, Visa, Subscription Account) 9. For Foreign Corporations (Incorporated/organized outside of Utah): You will need to upload a Certification of Good Standing/Existence from the State of Incorporation dated no earlier than ninety (90) days prior to filing with this office.

[@monode953]

Thumbs up for your New Zealand pronunciations, as an Englishman, I love hearing you butcher American place names! XD

[@mamadukanAU]

Can you please do a video on this topic now on what it’s like for a Australian brand making its product in China then warehousing it in Hong Kong and selling worldwide specially for US via e-commerce? Please do a duty and tax implications since lot has changed.

[@MurphyArtPrints]

Only 200 sales in a state? I make that in a month with cheap digital items but I am nowhere near $100k They are still out of touch with the internet.

[@maryandmartha]

I live in Canada and I am setting up a tee-shirt store with Printful and Shopify. Printful says I need to obtain a seller permit and when I looked into this, it appears I need to apply for exemption in every state! (they call it a resale permit, so that might be a different thing). Any advice?

[@sadsadkrusty]

Did you figure this out? I'm Canadian as well looking into this.

[@Joe-oq2zn]

omg, this video is the most clear video out there

[@yessir6282]

AHAHAH I love her accent, I was watching this on a forum but I had to come here to comment lmao, TIXAS...TEXIS ahah

[@EvonArnold]

She is so Super Awesome for year I have been listening to her she very very knowledgeable!

[@xdeadyoungx]

I live in Auckland and sell online in USA and have been wondering about taxes. Great video!

[@plasmablobs2477]

Great video, nicely presented and crystal clear. I felt so happy with the "don't worry about it" statement at about 10minutes in, quite relieved! :)

[@illusica]

Wow this is pretty interesting do you have an updated video on this topic?

[@dememobius4789]

200 transactions are not that hard to reach. So after collecting the sales tax for the US, how do you actually pay it to IRS? What's the procedure? Do you need LLC and American bank account for that?

[@GreyGhost-r4z]

You should be doing ALL the videos for Shopify...

[@JimmyGotDishes]

I thought this video was about ''TEXAS'' !?!

[@VarunPathakCovers]

that accent tho

[@kyivstuff]

There are only two things certain in life: death and Texas!

[@gigdriving3171]

Anyone else from Florida? I'm new to the 1099 tax and looking into drop shipping business. Do you have any ideas how drop-shipping reseller do their taxes? Because we don't own the inventory and the goods come from every states and sell to every states within the US. Thanks for this great content and I know other people want to see this!

[@neilthackeray6640]

What does this mean if your dropshipper, like Printful, is in California and I live in Illinois? I'm assuming that I have to pay sales tax for California too.

[@iEKNOWS_]

Yes, this is correct but I believe only if you have over 200 transactions in that state or make over a certain amount of money in that state. Taxjar should have what the requirements are for CA. Also, you can get your resale certificate in Illinois and let printful know so they don't tax your orders from there. You will be responsible for implementing the states sales tax with what you sale.

[@Dsnidess]

Thank you for making it so simple

[@wowincredible7551]

Yes very helpful!! I sell primarily on amazon... I’m not at all concerned about the federal government nearly as much as I’m concerned about amazons TOS

[@angelanaya9641]

what if an 18 year old lives with his parents would they have to pay any sales tax, even though they don't own the house? And just to add what if there new to drop shipping?

[@MeMe-fg5sr]

This doesn't answer the question of whether the warehouse you are dropshipping from counts as you having nexus or not, which should be one of the biggest questions for dropshipping.

[@pdotgames]

If I dont collect taxes, do I have to pay taxes??

[@Sapient-x2l]

Hey Sarah, what happens for example: If you do POD and your manufacturer is in the USA?

[@michellebaldovi7435]

OMG I love you so much. You answered all my questions in just 1 video.

[@raistlin449]

Most informative on this topic, thanks

[@MarleneP]

Hi Sarah. Thank you so much for doing this. Honestly, I would be so totally lost without your helpful advice and encouragement. Can you please explain whether I need to show Printful a tax certificate for each of the 50+ states - or do I only do that once I approach whatever each state's threshold is? It's so confusing to me. I thought I only had to do that for New York. Thanks in advance!

[@olivierpire8311]

i understand the fact that Shopify calculates the tax amount for you, but i did not hear anything about how is it paid, by who, and when. If anyone knows, thank you for answering me.

[@samy6559]

Does having a US supplier affects a dropshipping store on having to pay sale taxes? In other words is it considered having a physical presence? Also, can your residential location affect in any way the sale taxes you have to pay?

[@sandeepbhandari1308]

I love watching your videos due the value u put it. could you create videos on how to advertise product on FB ads?

[@shannonreinhardt3924]

Awesome video! Cleared up the sales tax questions I had, thank you!

[@agentsat]

As always, you are full of direct, concise knowledge! Thanks :)

[@ozymandias8523]

Thank you. You really explain those things very easily.

[@harrydaniel3801]

You have an amazing style... What if the dropshipping supplier is located in USA though I am not?

[@crossvillegoogler]

It makes a difference, because now you have to keep up with the sales tax in all 50 states since they passed this law, $100,000 threshold notwithstanding. The court ignored nexus and I believe did so illegally based on the information given in the original court case with Quill. As an accountant I know how hard it is to keep track of sales tax in all 50 states, where I worked we had stores in malls in every state. It’s a major headache and even if you hire an accountant to do it you still have to pay that account. All the extra work that the accountant has to do because of this stupid law based on the greedy state of North Dakota which has almost has no citizens is going to really cost the consumer, because we know that when overhead goes up merchants are gonna pass this expense on to the customer, or they will get eaten up by the big chain merchants. That’s really what is going on, lobbying should be illegal.

[@strawberrysoup202]

If I use Aliexpress warehouse based in the US, am I obligated to pay sales tax (I live in Europe)? I read somewhere that if a customer and the warehouse are both in the same state, I'm required to pay sales tax, is this true? I also read that AliExpress is required to collect sales taxes from US consumers who live in the 45 states , so do they take care of the sales tax already?

[@bobbysimon2823]

Wasn't expecting that Buffalo, NY shoutout! Helpful video thanks

[@MellySoWavy]

haha me either, of all the places in the whole world lol this got really custom to me

[@wesalalsharif5672]

This was very helpful to me 😀😀thank you so much

[@louiseberggren5054]

Hi Sarah! Thank you for sharing so many great tips and tricks with us! In the process of setting up my first Shopify store and absolutely love your videos!! I just watch an other video of yours so my question has absolutely nothing to do with this one, but as it's near I thought the chance of getting an answer is better... ;) And if there's a video about this, please let me know! So what's the big difference between Oberlo and Importify? Seems like there's a lot more products to be fund via Importify and that they both help with uploading products, fulfilling orders etc.? Also, is it possible to sell on Shopify using both and/or others? Thank you again!

[@jakemcculloch22]

Can you tell us what income tax obligations new zealand has then please

[@Bartwrite]

If Shopify is collecting the sales taxes, say for New York City and Buffalo, is Shopify paying the sales taxes when due, or do we receive the taxes and have to file and pay them when due? Thx

[@WholesaleTed]

Yes, you still need to pay your tax return. Shopify doesn't do that for you.

[@nathanheath3756]

haha i was scared when my CPA told me that i need a sales tax permit in every state but this relieved the stress, thanks a lot!

[@Fbdevnn]

nathan Heath read tax free wealth

[@sabinarajput786]

Please do a video on dropshipping income tax

[@TomMackaill]

This cleared alot up, thanks 🤟

[@flinkbranding]

Does a PO Box count as having Nexus in that state?

[@sethwallace7666]

Following

[@MUFC20]

Hi, I am looking to sell shopify print on demand products to US customers but I’m an EU citizen. So I only need to pay taxes in my country right?

[@djflipmixx9125]

Can you do a video on details about how to charge taxes on Printify or dose Printify not charge automatically ?

[@dwcleary8694]

OK, so Shopify collects the correct amount of sales tax. What you didn't specifically say - do they pass it along directly to the government and is the bookkeeping done so you can track the tax totals, etc? Thanks.

[@jessedixon365]

Really helpful video. Thanks so much

[@dennischen8887]

I'm American and run Shopify Payments in US payment gateway. Although the revenue is going into US accounts, I do not own property in any state and I stay out of the US for atleast 330 days out of the year in other countries on visitors status. Haven't charged any sales tax so far. Will talk to an accountant and hopefully will be able to continue not charging any sales tax.

[@WholesaleTed]

I think it is worthwhile that you do. You may be able to not qualify for Nexus!

[@mrf8514]

What state do you hold a driver's license from? That's your legal state of residence.

[@dennischen8887]

I don't have a US drivers license or state ID anymore. I have been living outside US for the last 8 years.

[@alexreitler]

In Romania there are no taxes for dropshipping... because the products do not go through Romania there is no tax on them.

[@cherifmokdad3937]

Hi, sarah, could you please consider posting a video on how to choose a niche and a product to sell? many people get stuck at this point>

[@WholesaleTed]

Hi Cherif, this is actually a topic I've talked about in several videos: kzbin.info/www/bejne/ipbTZKyClNmtj7M kzbin.info/www/bejne/rZSWmZucjt6Ea9E kzbin.info/www/bejne/oHnSfWOvnJV_pZI kzbin.info/www/bejne/e5i2mp9noNajhck

[@cherifmokdad3937]

i am stuck in choosing a niche and a website name, accessories maybe, about a topic like bunnies? i dont know what to choose. its easy to choose the wrong niche, and i dont want to choose something most ppl chose

[@eamaxpips]

I opened my company in Hong Kong, I never needed to pay sales tax, now I want to change my fiscal residence for the Panama, and I will not have to pay any taxes again, remember tax and theft.

[@frequentneeds7011]

What happens if some of the products didn't have a charge tax option? Best to keep the item or take the item off of the store?

[@SK-gm9uc]

Can you explain taxes for Etsy sellers outside the US

[@helenamb6391]

Hi Sarah, thank you and the entire Wholesale Ted for all your videos, they are very helpful. I still have one question though, it's about that "OR" in $100.000 OR 200 transactions. While (unfortunately) I do not need to worry about $100.000 part, the 200 part might be important. Let's imagine I am an international dropshipper who found his niche and a winning product and has a whopping success by selling swimming suits to Alaska. My swimming suits are so great that every Alaskan wants to have them, so I am selling hundreds of them (hundreds of orders, i.e. hundreds of transactions, $5 per suit, made more than $15.000 within a year in Alaska alone). Do I need to collect Sales Tax?

[@clairestile5743]

You are so smart! Thank you!

[@jeremyl9515]

What if you don't live or own properties in any state, but do have product storage in a fulfillment center in some states that would trigger nexus?

[@crossvillegoogler]

Who files the tax return however? Does Shopify file a tax return with the state and pay the taxes, somebody has to file a return. If they don’t then I do, which means I pay the taxes twice if Shopify held out tax money unless they are going to pay the state I live in.

[@yanikashanty7436]

Thanks! Question - you pay tax where you live or you have to register the company and pay tax of the business registration? Let’s say I live in UAE and have a company in Estonia.

[@desmondlim4883]

Hi Ted, this is a great video. However, can you explain a bit on tax in U.K if dropshipper wants to sell there?

[@SamuelMariyanto]

Thanks Sarah for the enlightenment. I have a question, can I be helped with enlightenment? because I searched on the internet I couldn't find it. I'm not a US resident, I don't live in the US, but I dropship from a US supplier to a US customer, do I still collect sales tax or not? Please advise Sarah. Thank you in advance

[@minhnorthman6974]

So long story short... If I am not physically in the US, dont have any companies, any employees etc., but just doing print on demand with a print provider located in the US and my earnings are under 100k ( depends on states), then I do not pay any taxes?

[@Lilly-iv4rk]

What about Printful? I’m selling via eBay…

[@truth.abroad]

Thank you for the video! For those that are shortcutting - there is no single requirement for all states, sales tax is different in pretty much every state. I might be wrong, but Kansas for example requires sellers to get sales certificate straight from the first sale even for out-of-US-sellers (I am not sure on this, just warning how important to check the laws)

[@allanhof6553]

Do you have any tips in finding out these requirements and taxes within all states? I'm from europe and find it really hard to find the 2021 requirements online.

[@REXNEMORE]

2022 update please!

[@GemmaWeirs]

There are two types of nexus in the US. Physical nexus and economical nexus. It seems you've only covered (pretty much) physical nexus. With CA's upcoming tax law changes, how would you advise non-resident dropshippers to proceed? I've been looking at using TaxJar for dealing with sales tax. Have you used them?

[@David-hh8on]

One thing I wounder is will the customer in USA wait 20 days for a items?

[@WholesaleTed]

The definitely will kzbin.info/www/bejne/qXPYmoFjeLure5Y

[@craigstrickland8978]

If you are a dropshipper and the supplier ships out the products do you have to pay sales tax. I heard if the retailer doesn't ship out products from their own warehouse they are not liable for paying sales tax.