The following provides an introduction to Tax Nexus, how it impacts your business, and why it’s important to have it managed in QuickBooks Online (QBO) properly.
Please make sure to consult your tax advisor for specific guidance.
Simply put, where there is nexus, you may be required to collect sales tax. So what is nexus? Well, there is what’s known as Physical Nexus and Economic Nexus, both of which may impact your business.
Physical Nexus - for each location you operate your business from (e.g. corporate office, warehouse), you may be obligated to collect and report sales tax. To have this managed properly in QBO, it requires that your addresses in QBO are setup correctly. You can learn more about setting up addresses in QBO by reading:
Economic Nexus - As you sell your products and services via your Shopify store, depending on what your sales are in a state, you may be required to collect sales tax for that state.
Please make sure to consult your tax advisor for specific guidance, but here are a couple of great articles from QuickBooks (Intuit) that will help provide further education on this topic.