Taxes that you need to know when operating EC for US (for beginners)

by Chie Suzuki

What I want to know when selling products on EC sites overseas is tax.

Especially in the United States, it is complicated because the state tax is different for each state, depending on the product, and various elements are overlapped and taxes are imposed. 。

Today, we have briefly summarized the outline of American taxes generated when selling products at online stores and how they can respond on SHOPIFY.


About Sales Tax in the United States

As you may know, there is no tax in the United States in the Japanese consumption tax.

In Japan, consumption tax is charged not only when consumers purchase products at shops, but also when purchasing products from manufacturers.In the United States, Sales Tax is only when consumers buy products at shops.

Sales Tax (Sales Tax): Tax incurred when consumers purchase products at retail stores

Consumption tax in Japan: Excise Tax also exists, but in the United States, consumption tax is only for specific products such as tobacco, alcoholic beverages, trailers, tires, and petroleum products, so Japan is Japan. The concept is a little different. This is based on the concept of taxation based on luxury items.

American Sales Tax varies depending on the state and products

Sales Tax in the United States is characterized by different tax rates depending on its state, group, and cities.
A typical example is 7.25%in California, 4%in New York and Hawaii, 6.25%in Texas, and 6.5%in Washington.

Sales Tax can be determined by each state and local governments. So the tax rate varies depending on the product.

For example, for apparel shops in New York, the tax rate is different between clothes and accessories. In addition, in New York, it is tax -exempt to wear clothes and shoes with less than $ 110.

Please check this out for details.
List of sales tax rates for each state and local governments: Federation of Tax Administrators

In that case, it is thought that the number of people who buy products will increase in a state with low sales tax rates. To prevent it in the United StatesUsed tax: USE TAX there is.

So, for example, even if I live in California and buy a product in Texas, if I use a product in the autonomy, the use of the product from the state where I purchased the product, the tax rate that uses the product is deducted. You will pay taxes. In principle, Sales Tax and USE TAX in the own crate are the same.

And it's complicated.

Price display method at online store

Then, I would like to introduce how to solve the complicated tax problem above when operating an online store for the United States using Shopify.

1) In the case of cross -border (when shipping products from Japan to US)

In the case of cross -border EC, the major difference from domestic sales is that consumers may have to pay tariffs and local consumption tax after payment.
There are two ways to display the price at the online store:

DDU (Delivered Duty Unpaid)= Credzzles in the display priceNot included
DDP (Delived Duty Paid)= Credzzles in the display priceinclude

In the case of any price display, to avoid anxiety to customers,You need to list the tax conditions on the online store help page and product page.

SHIP & CO's article was written as follows. And this article was very easy to understand, so please read it.

"One day the buyer is suddenly contacted by customs, and in order to prevent the fact that tax payment is requested, or to prevent it from being refused to receive it, it is on the policy page of the company's site and each product page. It is important to clearly describe these tax conditions. By doing so, customers will be able to shop with peace of mind and enhance the purchase decision rate and repeat rate. source:About "Taxation" at cross -border EC

2) If you have a US corporation and operate the online store in SHOPIFY

You can set the automatic tax rate calculation from SHOPIFY. In addition, it is possible to set the tax priority to products that apply a special tax rate.
I will briefly introduce the setting method!

1. Move from the management screen in the order of → lower left.

2. Tax areaIn the section, enter with the United States and click.
3. Calculate taxClick in the section.
4. Select the state.

5. Enter the postal code of the location with Nexus beside the state and click the state.

Then, the corresponding tax is displayed in the entered location.

When entering the postcode,NexusEnter the physical location (office, warehouse, other facilities, etc.) in each area with each.
* Regarding Nexus, SHOPIFY Help CenterAmerican tax NexusPlease confirm.

When using Shopify Plus

If you are using Shopify Plus, pay for itAVALARA AVATAX You can also use the service.
AVATAX is an article tax software that automatically calculates and fills in taxes. Avalara has a tax rate in areas of tax on more than 12,000 placesProvided in real time.SHOPIFY's automatic calculation is also performed regularly, but it can be used in real time in more detailed adjustments.

Bonus ~ US interesting reduction tax rate ~

Since the hard story continued, I would like to end the end of the United States and end three interesting sales taxes.

  • Bagel tax
    In New York, bagels are tax -exempt if you buy them as they are. However, it is taxed to bake, apply cream cheese, or sandwich ingredients. Is it useless to give a chip? I thought.
  • Soda tax
    Berkeley in California and Philadelphia, Pennsylvania are taxed on soft drinks such as carbonated drinks and sugar beverages. Let's play a role in dieting.
  • Glowing toy tax
    In West Virginia, toys (fireworks, toys, etc.) made to surprise people are subject to tax. It seems to be useful for deterring gun crimes and violent crimes.

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