I have an ecommerce client whom is rightfully concerned about collecting taxes in other states. from my understanding you should be charging tax if you have at least 100k in sales or 200 transactions in another other than your own. Would webflow start charging state tax after one of these points or how would we go about collecting it ourselves? is there a way to manually determine which states we choose to collect tax in?
Welcome to the Community, @EdwinConde95
I’m by no means a tax expert (so depending on the size of your client’s business, it may be beneficial for them to chat with one just in case) but as far as I’m aware you’re only required to collect sales tax if the business is operating in a state that collects sales tax.
Based on what I believe, if I start a business where I live (in Oregon), I’m not required to collect sales tax on products—regardless of where they end up. Alternatively, if I started a business where I grew up (in Arizona) then I would be required to collect sales tax—even from places like Oregon who don’t require it locally.
Sates may vary as to when this takes effect (like you said, it may only kick in after 100k sales or 200 transactions) but this would depend on where the business is located. Some states could easily require it for any purchase made from a business within their state—regardless of the volume.
In terms of your specific question, you choose to collect sales tax on orders from your storefront during setup—so if there is a specific rule requiring it be collected only after a certain amount in sales or transactions then you would need to manually enable it at that point. Webflow only collects taxes when you tell it that it’s required:
I would imagine this is because some businesses choose to include sales tax within their product pricing—rather than include it at the end during checkout. With either situation (in states where taxes are required) the business would be required to pay back X% of their revenue to the state itself.
As I said, with any tax-related business questions it’s best for your client to find themselves a CPA that can confirm when taxes are necessary given their location and specific business type/size. I’m sure there is some wiggle room for businesses operating under a certain revenue per year, but it’s always better to get the correct information sooner rather than later.