Straight answers to what Shopify sellers actually ask

Usually not in all of them — and that's the part most sellers get wrong.

Since South Dakota v. Wayfair (2018), a state can require you to collect once your sales into that state pass its economic-nexus threshold. Each state sets its own economic-nexus threshold. Most are based on your sales revenue into that state; some also count separate transactions, though several have removed the transaction test and more continue to. Because the figures differ by state and change from year to year, we don't publish them here. Some states have no transaction count. Some use gross sales, others use taxable sales.

Two things sellers commonly miss. First, thresholds are measured at the business level, not per storefront — if you run more than one store, the totals combine. Second, whether sales through a marketplace count toward your own threshold is not uniform across states.

Our free nexus checker gives you an educational signal, one state at a time. It is not a determination — confirm any state where you're close with a tax professional.

Almost certainly not. This is the fear that makes sellers consider quitting a channel, and it's usually much bigger in the imagination than in reality.

You only have an obligation in a state once you've actually crossed that state's threshold. Most small and mid-sized sellers cross in a handful of states, not fifty — typically the large-population ones where their orders concentrate. Five states have no general statewide sales tax at all.

The practical approach is not to prepare for fifty. It's to know which specific states you're near or over, and deal with those. That's a monitoring problem, not a fifty-state problem — and it's answerable from data you already have in Shopify.

They solve different problems, and the honest answer is that most growing sellers end up needing both.

Software does the mechanical work: pulling every order and payout, matching them, categorizing expenses, producing a P&L that ties out. That work is repetitive, high-volume and unforgiving — exactly what software is good at, and exactly where doing it by hand in a spreadsheet quietly goes wrong.

An accountant makes the judgment calls: your entity structure, which method to elect, how to treat the genuinely ambiguous items, and signing your return. No software should be making those decisions for you, and we don't.

The most common failure isn't picking wrong — it's handing a CPA messy books. A good bookkeeping setup makes your accountant cheaper and more useful, because they spend their time on judgment instead of cleanup.

Start from what the customer paid, then subtract everything that actually left your hands:

1. Payment processing. This is the one most sellers get wrong, because the rate depends on your Shopify plan — Basic, Grow and Advanced each carry a different card rate, plus a flat per-transaction fee. International cards and some wallets cost more again. Fees are charged on the full amount the customer paid, including sales tax — not on your net sales.

2. Cost of goods. What the item actually cost you, including inbound freight and duties, at the cost in effect when that order shipped — not today's cost.

3. Sales tax collected. This is never your money. It's a pass-through liability you're holding for a state, so it should never appear in your revenue.

4. Discounts and refunds. Refunds reduce your gross receipts; they aren't an expense.

Our free per-order profit calculator walks through this with your own numbers.

More than the plan page suggests, and the gap is usually where a seller's assumed margin quietly disappears.

The card rate on your plan is only the starting point. Add the flat per-transaction fee, the extra charged on international cards, wallet and buy-now-pay-later rates that differ from your standard card rate, chargeback fees, currency conversion, and the monthly cost of every app in your stack allocated across your order volume.

None of this is hidden — it's all disclosed. It's just spread across places nobody adds up, which is why the margin a seller believes they have and the one they actually have are rarely the same number.

For a genuine business, generally yes — most are ordinary and necessary business expenses under IRC §162, which is the general rule that lets a business deduct the ordinary and necessary costs of carrying it on.

The trap is where they go rather than whether they count. A common error is reporting gross receipts and then forgetting that your 1099-K also reports gross — so the processing fees need to be deducted, not quietly netted out and lost. Some costs behave differently: inventory-related spend is recovered through cost of goods sold when the item sells, and a few items are capitalized rather than written off in year one.

Our free deduction checker covers 153 common e-commerce expenses with the code section and IRS publication behind each one.