Step 10: Confirm Tax Settings
Shopify allows you to take full control over the taxes charged on your online store. To setup & verify your tax settings:
Go to your Shopify Admin > Setting > Taxes.
Under the 'Tax Settings' section on this page, there will be options for:
- Show all prices with tax included
- Charge tax on shipping rates
- Charge VAT on digital goods
I recommend not enabling any of these settings unless you 100% know that you need to use them. Taxes are a tricky thing to help people with, as they're usually different depending on exactly where you're from (they differ from city to city, state to state, and country to country). You will definitely want to do some serious research, or reach out to a local tax professional in your area, before setting this up, so that you know exactly what you need to charge. If in doubt, I recommend using the default tax settings, set by Shopify, until you know exactly what you need to charge.
Under the "Tax Regions" section on this page, there will be a list of each of the countries/regions that you ship to (this is based off of the shipping zones you created from step 9).
If you click 'edit' next to a country/region, it will bring up a page with the tax settings for that area. If you're not collecting taxes yet for that region, the button will say "set up" instead of "edit". You can then set the tax amounts charged, which may look a bit different, depending on the country/region.
For example, the settings for Canada looks a bit different than the settings for the United States.
Depending on your business, you may need to set up specific products to be taxed differently than the rest of the products on your store (ex. New York clothing stores). In these situations, you will want to refer to the Shopify guide on how to setup Tax Overrides. Most merchants/stores don't need to setup tax overrides, but if you do, it's good to know that this feature is available for you to use.
Need more help with this step? Check out Shopify's help docs for tax settings by clicking here.