Gooten does not include taxes in our US product prices, nor do we collect taxes from you as Gooten is the software that routes and powers your orders, not the seller.
We cannot advise on how to collect or what to charge for taxes and suggest that you consult an accountant due to the complexity of the issue. These are unique to each business, based on your business situation.
In many cases, the situation revolves around each specific state’s sales tax code and its definition of “nexus”, or which transactions your business is required to collect and remit taxes for. A nexus could be created by your home office location, place that you store inventory, where personnel do business for you outside of your home office, or even where an affiliate that markets your business is located. Some states, such as California, consider nexus based on as few as 10 days spent physically in state doing business.
Because there are 50 different state definitions of nexus (and countless other city and local definitions), there is no one “right” answer. A good rule of thumb, though - no matter what your tax liability, if you collect sales taxes, you must remit those sales taxes to the state collected, even if it turns out you it wasn’t a taxable transaction.
This guide by TaxJar provides a good overview to better understand collection of taxes for ecommerce retailers.
Each state has different sales tax nexus definitions so it’s important that you are familiar with your local definitions and the definitions of anywhere you ship to. If you are currently using Shopify, sales taxes are calculated and charged by the Shopify checkout. For Partners on other platforms, there are good software solutions, like TaxJar and Avalara, that can take care of the complexities of sales tax collection.
Please always check and double check the amount of sales tax that you are charging your customers.
When it comes to international orders, there is no general rule when custom duties and taxes are applied, and this differs from country to country. Some countries even require you to list the sales tax in the product price (like when selling into the UK). They depend on the destination country limits, package value, and other factors based on the product itself - and should be covered by the recipient as Gooten is not responsible for covering them.
When setting your retail prices or manually editing them, please keep in mind that customs agencies often calculate duties/fees based on the declared retail price.
If you're a Shopify user, that platform provides you two different options to charge taxes to your customers:
- Taxes already included in the cost of the product
- Charge taxes based on US Shipping rates
We've seen option 1 as the most popular selection for our partners and recommend building taxes into your margins.
Gooten, Inc and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.