Do I collect tax from my first sale?

Only where you are registered, which should be where you have nexus. Register before your first taxable sale in your home state.

Is Shopify liable if I get taxes wrong?

No. Shopify is a calculator, not a filer; tax compliance is the merchant's responsibility.

What about marketplaces like Amazon or Etsy?

Marketplaces collect and remit themselves as marketplace facilitators; your own Shopify store is separate and your responsibility.

Shopify Tax Setup for Beginners (US Focus)

For US stores, Shopify can calculate and collect sales tax automatically once you tell it where you are registered: go to Settings then Taxes and duties, add your state registrations, and Shopify applies the right rates at checkout. Shopify calculates and collects; filing and remitting to the states remains your job.

Nexus decides everything

You collect sales tax where you have nexus: a physical presence or enough sales into a state to cross its economic threshold. Most new stores have nexus only in their home state. Register there first and add other states only when thresholds are actually crossed.

The Shopify-side setup

Under Settings then Taxes and duties, add each state where you are registered with its tax ID. Shopify then calculates current rates automatically, including county and city layers. Keep product tax categories accurate (most products are standard), and mark tax-exempt customers where appropriate.

What Shopify does not do

Shopify collects the tax with each order but does not remit it. You file returns in each registered state, typically through the state's own portal, on the schedule the state assigns. The tax liability reports in Shopify analytics give you the numbers per state per period.

Selling to other countries

Cross-border adds VAT or GST questions and possible registration duties abroad. For a young store, a common pragmatic line is domestic sales first; expand internationally when the volume justifies the compliance work or a service that handles it.

Frequently asked questions

Do I collect tax from my first sale?: Only where you are registered, which should be where you have nexus. Register before your first taxable sale in your home state.
Is Shopify liable if I get taxes wrong?: No. Shopify is a calculator, not a filer; tax compliance is the merchant's responsibility.
What about marketplaces like Amazon or Etsy?: Marketplaces collect and remit themselves as marketplace facilitators; your own Shopify store is separate and your responsibility.