Does Shopify Remit Sales Tax? What Merchants Need to Know

Table of Contents

1. Introduction
2. The Fundamental Question: Does Shopify Remit Sales Tax?
3. Shopify vs. Marketplace Facilitators: Defining the Boundaries
4. Understanding Nexus: The Trigger for Tax Liability
5. How Shopify Tax Assists Your Business
6. The Merchant’s Responsibility: Registration and Remittance
7. Sales Tax for Digital Products and Online Courses
8. Building Recurring Revenue with Stability
9. Practical Scenario: Scaling a Boutique Brand
10. Common Pitfalls to Avoid
11. Why Native Shopify Integration Matters for Your Brand
12. Strategies for Streamlining Your Tax Obligations
13. Building a Scalable Knowledge Business with Tevello
14. Conclusion
15. FAQ

Introduction

Did you know that there are over 11,000 different sales tax jurisdictions in the United States alone? For many entrepreneurs, this single statistic is enough to induce a headache. As your e-commerce business grows, you eventually move past the simple excitement of your first sale and into the complex world of regulatory compliance. One of the most common questions we hear from merchants looking to scale is: does Shopify remit sales tax on my behalf?

Understanding the distinction between collecting tax and remitting tax is critical for the long-term health of your business. If you assume your platform is handling everything, you might be met with a surprise audit or significant back-tax penalties that could have been avoided with a clear strategy. At Tevello, our mission is to turn any Shopify store into a digital learning powerhouse, and part of that mission involves empowering you with the knowledge to manage your business operations effectively.

In this article, we will dive deep into the mechanics of Shopify’s tax system. We will explore the differences between Shopify and marketplace facilitators, define the nuances of physical and economic nexus, and explain exactly what your responsibilities are as a store owner. Furthermore, we will discuss how you can diversify your revenue through digital products and courses while maintaining a seamless, compliant checkout experience. By the end of this guide, you will have a comprehensive understanding of how to manage your tax obligations so you can focus on what you do best: building your brand.

The Fundamental Question: Does Shopify Remit Sales Tax?

To provide a direct answer: No, Shopify does not remit sales tax for the vast majority of its merchants. While the platform provides robust tools to help you calculate and collect the correct amount of tax from your customers at checkout, the responsibility of actually filing those taxes and sending the money to the state government lies squarely on your shoulders.

This is a common point of confusion because many new sellers are accustomed to platforms like Amazon, eBay, or Etsy. These platforms operate under "Marketplace Facilitator" laws. In those ecosystems, the platform is legally required to collect and remit the sales tax for every transaction that occurs on its site. Shopify is different. Shopify is an e-commerce platform that provides you with the infrastructure to run your own independent store.

Because you own the store, the customer data, and the brand experience, you are also the "seller of record." This means that in the eyes of the law, you are the one responsible for ensuring the state receives its cut. At Tevello, we believe merchants should own their customer data and brand experience, which is why we built a solution that integrates natively with your Shopify admin. This ownership is a powerful advantage for building long-term brand equity, but it does come with the responsibility of tax management.

Shopify vs. Marketplace Facilitators: Defining the Boundaries

To understand why Shopify doesn't remit your taxes, it helps to look at the legal definition of a marketplace facilitator. A marketplace facilitator is a business that contracts with third-party sellers to promote their sale of physical property, digital goods, or services through a forum it owns or operates. Because these marketplaces control the payment processing and the "mall" where the goods are sold, states find it easier to force the marketplace to handle the taxes rather than chasing thousands of individual small sellers.

Shopify, by contrast, is a software-as-a-service (SaaS) provider. They provide the tools, but you are the one operating the "digital storefront."

The Shop App Exception

There is one specific area where the lines blur: the Shop App. As of early 2025, Shopify began automatically collecting and remitting taxes for orders made specifically through the Shop App (the consumer-facing app where users can browse different stores) for shipments within or to the U.S.

However, it is vital to note that this only applies to orders placed directly within the Shop App. It does not apply to orders placed through your main online store URL, even if the customer uses Shop Pay to check out. Since the majority of your traffic likely comes through your own website, you cannot rely on this exception for your general tax compliance.

Understanding Nexus: The Trigger for Tax Liability

Before you can determine whether you need to remit taxes, you must understand if you have "nexus" in a particular state. Nexus is a legal term that describes a business's connection to a state that is significant enough for the state to require the business to collect and remit sales tax.

Physical Nexus

This is the traditional form of nexus. If you have a physical presence in a state, you almost certainly have physical nexus. This includes:

• An office or storefront.
• A warehouse where you store inventory.
• Employees or independent contractors working in that state.
• Attending trade shows where you make sales.

For example, if you are a merchant based in Texas but you use a fulfillment center in Pennsylvania to ship your products, you may have physical nexus in both states.

Economic Nexus

Following the landmark Supreme Court case South Dakota v. Wayfair, Inc. in 2018, states are now allowed to tax out-of-state sellers based solely on their economic activity within the state. This means even if you have no office, no employees, and no inventory in a state, you could still be required to collect and remit sales tax if you meet certain thresholds.

Most states have set these thresholds at $100,000 in gross sales or 200 separate transactions within a calendar year. If your Shopify store starts gaining traction in a new region, you must keep a close eye on these numbers.

How Shopify Tax Assists Your Business

While Shopify doesn't remit the tax, it does offer a powerful suite of tools called "Shopify Tax" to make the collection process as painless as possible. If you are selling digital courses or memberships using Tevello, you can benefit from all the key features for courses and communities that ensure your digital products are handled correctly within this system.

Automatic Calculations and Rates

Shopify Tax uses high-accuracy technology to determine the specific tax rate based on the customer’s precise rooftop address. This is far more accurate than zip-code-level calculations, which can often miss local or district-level taxes.

Liability Insights

One of the most helpful features in the Shopify admin is the "Liability Insights" tool. This dashboard monitors your sales across the U.S. and alerts you when you are approaching or have exceeded the economic nexus threshold in a specific state. This takes the guesswork out of compliance, allowing you to focus on examples of successful content monetization on Shopify rather than staring at spreadsheets.

The Cost of Shopify Tax

Transparency is important to us, and it’s important to understand Shopify's pricing for these tax services. Currently, Shopify Tax is free for your first $100,000 in U.S. sales each year. After you cross that threshold, Shopify charges a small transaction fee (typically 0.35%, or 0.25% for Shopify Plus) to cover the cost of the advanced calculation engine. There is a cap on this fee per order and per state, ensuring it remains affordable as you scale.

The Merchant’s Responsibility: Registration and Remittance

Once you have identified that you have nexus in a state, your path to compliance follows three main steps:

1. Register for a Sales Tax Permit: You must register with the state's Department of Revenue before you begin collecting tax. It is actually illegal in many jurisdictions to collect sales tax from customers without a valid permit.
2. Collect Tax at Checkout: Once registered, you update your Shopify settings to begin charging tax for customers in that state.
3. File and Remit: On a regular basis (monthly, quarterly, or annually, depending on the state’s requirements), you must file a return and send the collected funds to the state.

Many merchants find the filing and remittance phase to be the most daunting. To simplify this, you can use specialized tax software that integrates with Shopify to automate the filing process. These tools pull your sales data directly from your admin and handle the paperwork for you.

Sales Tax for Digital Products and Online Courses

As a merchant using Tevello, you are likely dealing with digital goods—online courses, downloadable PDFs, or community access. The taxability of these items is a nuanced subject because every state views digital goods differently.

Are Digital Goods Taxable?

In some states, digital goods are treated just like physical products and are fully taxable. In others, they are considered "services" or "intangible property" and are exempt from sales tax. For instance, a state might tax a pre-recorded video course but not a live 1-on-1 coaching session.

Because Tevello offers a unified login that reduces customer support friction, your customers will see a professional, consistent experience during the checkout process where these taxes are applied. Whether you are selling a physical workbook or a digital masterclass, Shopify's tax engine treats the transaction according to the product category you assign.

The Advantage of Selling Digital and Physical Together

One of the unique benefits of the Tevello ecosystem is that digital products that live directly alongside physical stock create a streamlined business model. Imagine a merchant selling premium coffee beans. By adding a "Barista Basics" video course, they create a high-margin upsell that requires no shipping boxes and no physical inventory costs.

From a tax perspective, having everything in one place—the Shopify checkout—means you don't have to reconcile data from multiple platforms. If unifying your stack is a priority, start by a simple, all-in-one price for unlimited courses.

Building Recurring Revenue with Stability

The goal of any great e-commerce business is to move away from the "one-and-done" sale and toward a model of recurring revenue and high Customer Lifetime Value (LTV). Memberships and courses are the perfect vehicles for this. When you use Tevello, you are building on a foundation that supports your growth without hidden traps.

We believe in predictable pricing without hidden transaction fees. While other course platforms might take a percentage of your hard-earned revenue (on top of what the payment processor takes), we charge 0% transaction fees. You keep 100% of what you earn, which makes your tax calculations much simpler to manage because you aren't constantly subtracting platform "success fees" from your gross totals.

Practical Scenario: Scaling a Boutique Brand

Consider the story of a creator who started selling handmade crochet patterns. Initially, they only sold to a few customers in their home state. As they grew, they began generating revenue from both physical and digital goods.

By using Tevello, they were able to see how one brand sold $112K+ by bundling courses and apply those same strategies. As their sales grew across the U.S., their Shopify admin alerted them that they had reached economic nexus in California and New York.

Because they were using a native integration, they didn't have to export data from a separate LMS to calculate their total sales for those states. Everything—the yarn, the hooks, and the "Advanced Crochet Techniques" course—was already in their Shopify sales reports. They simply registered for their permits and used the Shopify data to file their returns. This level of integration is why our mission is to keep keeping customers at home on the brand website rather than sending them to a third-party domain where data becomes fragmented.

Common Pitfalls to Avoid

When it comes to sales tax, ignorance is rarely accepted as a defense by state auditors. Here are a few pitfalls to avoid:

• Collecting Without Registering: As mentioned, you must have a permit before you start charging customers.
• Ignoring Digital Taxability: Don't assume that because there is no physical box, there is no tax. Always check the rules for "Digital Audio-Visual Works" or "Digital Books" in the states where you have nexus.
• Forgetting Use Tax: If you buy equipment for your business (like a camera for filming your Tevello courses) and weren't charged sales tax by the seller, you may owe "use tax" to your home state.
• Not Accounting for All Sales Channels: If you sell on Shopify and also have a small presence on a secondary platform, you must combine the sales from both to see if you've hit the economic nexus threshold.

Why Native Shopify Integration Matters for Your Brand

Many course platforms redirect your customers to a different URL (e.g., yourbrand.externalplatform.com). This not only hurts your SEO and brand consistency, but it also creates a "data silo." When your sales data is split between two platforms, determining your tax liability becomes a manual chore of exporting CSV files and merging them in Excel.

At Tevello, we prioritize a "Native Shopify Integration." This ensures a seamless checkout experience using the payment gateways you already trust, like Shopify Payments or PayPal. It also means that every dollar you earn is tracked in one central location. You can see how merchants are earning six figures by keeping their operations lean and their data centralized.

By staying within the Shopify ecosystem, you benefit from Shopify’s world-class security, its robust tax calculation engine, and its comprehensive reporting tools. This allows you to scale your community while avoiding per-user fees as the community scales. Our Unlimited Plan is designed to grow with you, offering a flat-rate plan that supports unlimited members.

Strategies for Streamlining Your Tax Obligations

Managing sales tax doesn't have to be a full-time job. Here are three strategies to keep your business running smoothly:

1. Automate Your Record-Keeping: Use the reporting tools within Shopify to categorize your sales by state and tax jurisdiction. Ensure your product types (Digital vs. Physical) are correctly labeled in the product settings.
2. Use a Dedicated Tax App: If you are selling in more than five or ten states, consider an automation tool that handles the filing and remittance for you. These apps can be found in the Shopify App Store and serve as a perfect companion to your course-building tools.
3. Review Your Nexus Annually: At the beginning of every year, look at your previous year’s sales. Check the "Tax Liability" section of your Shopify admin to see if you’ve crossed any new thresholds.

By staying proactive, you can focus on the fun parts of your business—like creating content and engaging with your community—knowing that the administrative side is under control.

Building a Scalable Knowledge Business with Tevello

Choosing the right tools for your business is about more than just features; it’s about the philosophy of the platform. We believe that you should have total control over your business. This means no hidden fees, no redirection of your customers, and no complex pricing tiers.

Our Unlimited Plan for $29.99 per month includes:

• Unlimited courses and students.
• Unlimited video hosting and bandwidth.
• Drip content scheduling and quizzes.
• Community features like member directories and social feeds.

This all-in-one ecosystem allows you to build a community and a library of knowledge without worrying about your software costs skyrocketing as you become more successful. You can find strategies for selling over 4,000 digital courses natively by observing how other successful merchants have structured their Tevello-powered stores.

Conclusion

Navigating the world of sales tax can feel like a daunting task, but it is a vital part of being a successful e-commerce entrepreneur. To recap: does Shopify remit sales tax? Generally, no. While the platform is an incredible ally in calculating and collecting the correct amounts, you remain the steward of that money until it is remitted to the proper state authorities.

By understanding your nexus, leveraging Shopify’s built-in tax tools, and keeping your sales data centralized through a native integration like Tevello, you can manage these obligations with confidence. Growing your brand into a digital learning powerhouse is about more than just selling—it’s about building a sustainable, compliant, and professional business that your customers can trust.

At Tevello, we are here to support that journey. We invite you to experience the ease of building a community and selling courses directly on your own Shopify store. With our 14-day free trial, you can build your entire curriculum and set up your community features before paying a cent. Plus, with our commitment to 0% transaction fees, you can scale your revenue with complete peace of mind.

To build your community without leaving Shopify, start by reviewing the Shopify App Store listing merchants install from. If you’re ready to take the next step in your e-commerce journey, install Tevello from the Shopify App Store today and start your 14-day free trial and build your first course now.

FAQ

1. If I only sell digital courses on Shopify, do I still need to worry about sales tax? Yes. Many U.S. states consider digital courses and digital downloads to be taxable. You should check the specific laws in your home state and any state where you have reached the economic nexus threshold (usually $100,000 in sales or 200 transactions). Shopify Tax can help you identify where these rules apply.

2. How does the 0.35% Shopify Tax fee work? Shopify Tax is free for your first $100,000 in U.S. sales each year. Once you exceed that amount, Shopify applies a 0.35% calculation fee to orders in states where you have enabled tax collection. This fee is capped at $0.99 per order, ensuring that even large transactions remain cost-effective for the merchant.

3. Will Tevello charge me a percentage of my course sales for tax purposes? No. Tevello believes in a transparent, flat-rate pricing model. We charge 0% transaction fees, meaning we never take a cut of your sales. You are responsible for the standard payment processing fees (like those from Shopify Payments or PayPal) and any applicable sales tax, but Tevello itself will never charge you a "success fee."

4. Can I use Tevello to sell courses internationally, and how does tax work then? Absolutely. Tevello supports merchants and students worldwide. International tax (like VAT in the EU or GST in Australia) follows different rules than U.S. sales tax. Shopify has built-in features to help you manage international taxes, ensuring that your digital products are compliant no matter where your students are located.