The year has officially kicked off which means it's time to start thinking about filing your sales tax returns. The vast majority of states – 39, including the District of Columbia – have their annual or semi-annual filing deadlines in January. Whether your file annually, semiannually, quarterly, or monthly, you probably have taxes due soon.
Fortunately, Shopify Tax can help you save time and make managing sales tax a little less stressful! To get you started, we've compiled a list of tips and key January deadlines below.
Remember, it's your responsibility to consult with local tax authorities or a tax professional to verify that you’re collecting the correct tax rates from your customers and to ensure you file and remit your taxes correctly. Plus, most of the tax professionals we know are pretty cool people.
Refresh yourself on where you’re currently collecting tax – or may soon need to – and communicate any changes
Did you open a new New York flagship store? Did your recent marketing campaign lead to a spike in sales in Arizona? Big milestones for your business may impact your tax-collection requirements. You may hear the term Nexus used to describe when a business must register and start collecting and remitting sales tax in a particular state. Nexus may be established through a physical presence like a storefront or warehouse, or through an "economic" presence determined by exceeding a defined sales threshold. There’s no better time than the present to make sure you’re on top of your tax requirements. If you use Shopify Tax, you can take advantage of sales tax insights to verify where you’re currently collecting and receive guidance on where else you may be liable today or in the near future.
Create a calendar of your upcoming tax filing deadlines and requirements
Your sales may impact when you need to start collecting tax and your filing frequency. Most of the businesses we speak with start off with annual filing requirements and then increase to quarterly or monthly filing as their business grows. If you’re not sure, now’s a great time to check in with the state's Department of Revenue.
Once you’ve determined your filing frequency, it's a great time to familiarize yourself with key deadlines. We’ve provided January's due dates along with helpful links below. While creating your plan for January, take a bit of time to review and add any other key 2024 dates to your calendar. Your future self will thank you!
Compile your state-level reports
When it's time to file, the state relies on your business's sales and tax data to determine how much of the tax you’ve collected should go to the state, as well as each county, city, or local jurisdiction. Compiling and reconciling all this information can be time-consuming and frustrating, which is why Shopify Tax now includes enhanced sales tax reports. Select the state and your filing frequency, and you’ll be taken to a jurisdictional breakdown of sales made and tax collected. Use this information to complete your online or physical returns, or export and provide to your tax and accounting team.
Send in your returns!
You’ve done all the hard work; now file those returns! Most states recommend, and some even require that you file online. You can find more details by visiting each state’s website.
Consider automatically setting aside sales tax in the future
Tax time is stressful enough without having to worry about whether you set aside enough cash to pay taxes. To help save funds for tax filing time, you can set aside US sales tax from your Shopify Payments payouts and Shop Pay Installments payouts using Shopify Balance. Go to Balance and then turn on the sales tax account under Settings to get started. Once activated, the tax you’ve collected will be automatically allocated during your next Shopify Payments and Shop Pay Installments payout. You can withdraw funds from your dedicated sales tax Balance account at any time. This way, you'll have the necessary funds ready when it's time to file your taxes.
Take the stress out of sales tax
Shopify Tax strives to make sales tax management as seamless as possible. Take the first step towards a less stressful year with insights, hyper-accurate tax calculations, enhanced reports, and more!
The following information is for educational purposes only. Consult with the state or a tax professional to verify that you’re filing and remitting correctly and on-time.
State
Annual Filing or semiannual
Quarterly Filing
Monthly Filing
