Shopify Launches Automated Tax Filing for U.S. Merchants Using Shopify Tax

What Is Automated Filing with Shopify Tax?

Automated filing allows Shopify to submit sales tax returns on behalf of eligible merchants directly to tax authorities. It covers sales made through your Shopify store and any connected Shopify-supported sales channels-making tax season far less manual.

This service is only available to U.S.-based Shopify merchants who have activated Shopify Tax, and it applies exclusively to current and upcoming returns-not past filings or amendments.

Who Is Eligible?

Before setting up automated filing, merchants must meet specific criteria:

• Your store must be based in the United States.
• You must be using Shopify Tax, not Basic Tax, Manual Tax, or a third-party tax service (including those used in 2024).
• The orders must have had taxes collected using Shopify Tax at the time of transaction.
• You cannot use automated filing if your store had customer data erasure requests.
• Only orders where your Shopify store is the merchant of record qualify.
• Imported orders or sales via unsupported external channels (e.g., Amazon, TikTok, Meta when not marked “Filed”) are excluded.

If you haven’t completed tax setup in each state where you collect sales tax, you must do so before the filing deadline.

Important Considerations

Shopify’s automated filing is designed to handle standard filings going forward but won’t support:

• Prepayments to state tax authorities
• Streamlined Sales Tax (SST) participation
• Filing amended or overdue returns
• Orders involving other tax tools or pricing structures (e.g., tax-inclusive pricing)
• Stores using non-USD currencies

Additionally, it does not work with the Loop Returns & Exchanges app, which may interfere with order classification and tax reporting.

Marketplace Sales Reporting

Even though marketplaces like Amazon, Etsy, and TikTok are responsible for collecting and remitting tax on your behalf, some states still require you to report those gross sales. Shopify helps by including these marketplace sales in the tax filings for specific states, but only if those channels are supported and marked as “Filed” in your finance report.

States Where Marketplace Sales Reporting is Required

If you sell on marketplaces, your gross sales must be reported in the following states (even if the platform collects tax for you):

• Required: Alabama, Arizona, California, Connecticut, D.C., Hawaii, Iowa, Indiana, Kentucky, Louisiana, Massachusetts, Maine, Minnesota, North Carolina, Nebraska, New Mexico, New York, Oklahoma, Pennsylvania, South Carolina, South Dakota, Texas, Washington, Wisconsin
• Not Required: Arkansas, Colorado, Florida, Georgia, Idaho, Illinois, Kansas, Maryland, Michigan, Missouri, Mississippi, North Dakota, New Jersey, Nevada, Ohio, Rhode Island, Tennessee, Utah, Virginia, Vermont, West Virginia, Wyoming

What Merchants Should Do

If you’re using Shopify Tax and meet the eligibility criteria, you can activate automated filing by completing your tax setup for each relevant state in your Shopify admin. Once enabled, Shopify handles the rest-calculating, submitting, and reporting your state sales tax filings.

This system is built for simplicity-but taxes are never one-size-fits-all. For complex scenarios or questions about your tax liabilities, consulting a tax professional is still recommended.

Bottom Line: Time Saver

Shopify’s automated filing is a welcome update for U.S.-based merchants who want to reduce the stress of sales tax compliance. While it doesn’t replace tax professionals, it dramatically reduces the manual effort required to keep up with state-by-state filings.

For merchants using Shopify Tax, this could be the most important upgrade of the year.