E5: Shopify Plus Sales Tax Changes & Deep Dive into Sales Tax Complexity
In this episode of the Ecommerce Finance Podcast, Stephen Brown and Mac Wright from Avalara discuss the upcoming changes to sales tax for Shopify Plus users. They delve into the complexities of sales tax calculation, the importance of understanding nexus, and the registration process for compliance.
Mac explains how Avalara's tax engine simplifies the sales tax process for ecommerce businesses, while also addressing the challenges posed by varying tax laws across states and countries. The conversation highlights the need for businesses to stay informed and compliant in an ever-evolving tax landscape.
Sound Bites
"Sales tax is a complex and annoying world."
"Nexus is your relationship with the state."
"You need to collect tax if you have nexus."
Takeaways
- Avalara has been a leader in tax technology for over 20 years.
- The relationship between Shopify and Avalara is changing with new tax solutions.
- Businesses must migrate to new tax engines by April 30, 2025.
- Sales tax is complex and requires understanding of nexus and registration.
- Nexus determines a business's obligation to collect sales tax.
- Collecting sales tax before registering can lead to complications.
- Sales tax calculation involves where, who, and what.
- Different customers may have different tax obligations.
- VAT is a significant consideration for international sales.
- Staying compliant with sales tax is crucial to avoid penalties.
Chapters
00:00 Introduction to Sales Tax Changes in Ecommerce
02:09 Avalara's Role and Shopify Plus Integration
06:38 Migration Options for Shopify Plus Users
10:19 Understanding Sales Tax Complexity
11:34 Nexus: The Foundation of Sales Tax Obligations
19:05 The Registration Process for Sales Tax
21:30 Calculating Sales Tax: The Key Factors
28:39 The Importance of Product Taxability
31:26 Navigating VAT and International Sales Tax
37:02 The Future of Sales Tax Compliance
Work with LedgerGurus
Sales Tax Services