AutomationSet Up Tax-Exempt Customers
Last updated: November 18 2024
Managing sales tax can be tricky for online sellers, but it’s an integral part of running a legitimate eCommerce business. Properly setting up tax-exempt customers like non-profits or government agencies is critical to avoiding mistakes down the line.
In this article, we’ll walk through the process of setting up tax-exempt shoppers at your Shopify store. Then, you can ensure compliant and accurate tax handling for different customer types. Let’s get started!
How to Set Up Tax-Exempt Customers on Shopify
Step 1: Access Customer’s Profile
- Go to Customers from the left-hand menu.
- Find the customer you want to make tax-exempt and click on their name.
Step 2: Edit Customer Details
- On the customer’s profile page, refer to the “Customer” area > click the Action (…) button > Choose Manage tax exemptions
- Browse/ search for the tax exemptions that you wish to add, then tick on those boxes to confirm.
Step 3: Save Changes
- Click the Save button to apply for the tax exemption for the customer.
How to Set a Product to be Exempted from Sales Tax on Shopify
Step 1: Navigate to Products
- In your Shopify admin, go to Products > All products.
- Select the Product you wish to make tax-exempt.
Step 2: Edit Product Details
- Scroll down to the Pricing section on the product details page.
Step 3: Uncheck “Charge taxes on this product”
- Uncheck the box labeled “Charge taxes on this product”.
Step 4: Save Changes
- Click the Save button at the top right corner to apply the changes.
By following these steps, you can easily manage tax exemptions for individual products within your Shopify store.
FAQs
What Are The Steps To Set Up Tax-Exempt Status For A Customer On Shopify?
To set up tax-exempt status for a customer, log into your Shopify admin panel, navigate to “Settings,” then “Taxes.” In the “Tax exemptions” section, click “Add tax exemption,” and choose whether to base the exemption on products or customers. For customers, locate the specific customer account, update their tax settings to mark them as tax-exempt, and save the changes.
Can I Set Up Tax Exemptions For Specific Products Instead Of Customers?
Yes, Shopify allows you to set up tax exemptions based on specific products. When creating a tax exemption, you can select the option to apply it to designated products. This option is useful for businesses that sell both taxable and tax-exempt items.
Are There Any Third-Party Apps That Can Help Manage Tax Exemptions On Shopify?
Yes, several third-party apps are available that simplify the management of tax exemptions in Shopify. For example, Avalara or Vertex can automate calculations, streamline processes, and ensure compliance with tax regulations.
What Should I Do If I Have A Mix Of Taxable And Tax-Exempt Customers?
For stores with both taxable and tax-exempt customers, you can configure tax settings in Shopify to differentiate between them. You can set specific customers as tax-exempt while ensuring that others are charged the appropriate sales tax. Then, you can manage information through the customer profiles in the Shopify admin panel.
In conclusion
Properly managing sales tax is an essential part of any successful online business. This article has provided a simple 5-step process for designating tax-exempt customers on your Shopify store. If you found it helpful, don’t hesitate to like and share it!
