Guest Blog by HarQuin Boutique Bookkeeping
Shopify may file your sales tax, but it doesn’t take responsibility for it — and that leaves more on your plate than you might expect.
This service uses automated calculations to process returns, meaning there is no human reasoning applied to your filings. You are still responsible for ensuring everything is being filed correctly, including verifying that Shopify is not double-paying VAT tax or marketplace sales.
If something is filed incorrectly, Shopify will not amend the return. Automated filing is performed only for current or upcoming filings. If you need help with past or amended returns, Shopify recommends contacting a tax professional.
Automated filings also do not include orders that had tax calculated by a tax service other than Shopify Tax.
In addition, Shopify Tax automated filing only includes information for orders placed on supported channels and marketplaces. Automated filing is not compatible with the Loop Returns & Exchanges app. Because of this, you are not guaranteed that all sales tax is being accounted for. And since the process is fully automated with no real person reviewing your filing, there is no one to catch missed sales or reporting errors.
Shopify also does not support prepayments in any state.
Another important note: Shopify does not offer tax registrations. These must be completed before setting up your tax returns with Shopify. You are also responsible for any new registrations required as you reach nexus in additional states.
Since Shopify only offers automated services, there is no support available to work with state agencies on your behalf if issues arise.
Shopify also includes this disclaimer on their website:
“Tax laws change frequently. If you have further questions about your tax returns, then you should contact local tax authorities or a tax professional. It’s your responsibility to consult with tax authorities or tax professionals to ensure that you file and remit your taxes correctly.”
At the end of the day, automated tools can support your process — but they do not replace oversight. Knowing your numbers, reviewing your reports, and understanding what is actually being filed is what protects your business.
If you are not confident in your setup, now is the time to take a closer look.
