Resale Certificate for Shopify Store Owners

Running a Shopify store means you're responsible for your own tax compliance—unlike marketplaces like Amazon or eBay that handle sales tax collection. Understanding resale certificates and sales tax is essential for Shopify merchants.

This guide covers everything you need to know.

E-commerce Store

Why Shopify Sellers Need a Resale Certificate

As a Shopify store owner, you're buying products to resell. A resale certificate lets you:

1. Buy inventory tax-free from suppliers
2. Open wholesale accounts (most require it)
3. Access better pricing from distributors
4. Operate legitimately as a retail business

The Cost of Not Having One

Let's say you spend $5,000/month on inventory in a state with 7% sales tax:

Setting Up Your Shopify Store for Tax Compliance

Step 1: Get Your Resale Certificate

Register for a sales tax permit in your state:

1. Apply through your state's Department of Revenue
2. Receive your sales tax permit/number
3. Obtain your resale certificate

This establishes you as a legitimate business authorized to collect sales tax.

Get Your Resale Certificate →

Step 2: Determine Where You Have Nexus

You need to collect sales tax in states where you have nexus:

Step 3: Configure Shopify Tax Settings

Shopify has built-in tax features:

1. Go to Settings → Taxes and duties
2. Set up regions where you need to collect
3. Enable automatic tax calculation
4. Register with states as needed

Step 4: Register in Nexus States

For each state where you have nexus:

1. Register for a sales tax permit
2. Set up collection in Shopify
3. File returns as required

Using Your Certificate with Suppliers

Wholesale Suppliers

Most wholesale suppliers require your resale certificate to:

• Open an account
• Access wholesale pricing
• Receive tax-exempt treatment

How to provide it:

1. During account registration
2. Upload to supplier portal
3. Email to your sales rep

Print-on-Demand Providers

If you use POD services with Shopify:

Dropship Suppliers

Even though you don't hold inventory:

• Provide your certificate
• Buy tax-free from supplier
• Collect tax from your customers

Shopify Business Models and Tax

Model 1: Traditional E-commerce

You buy inventory, store it, and ship to customers.

Tax considerations:

• Certificate for buying inventory
• Collect tax based on customer location
• Consider where you store inventory (nexus)

Fulfillment options:

• Self-fulfillment from home/warehouse
• 3PL provider like 3PLGuys
• Amazon Multi-Channel Fulfillment

Model 2: Print-on-Demand

Products made when ordered by POD provider.

Tax considerations:

• Certificate for your POD provider
• They handle production; you handle tax collection
• Nexus may exist where POD provider is located

Model 3: Dropshipping

Products ship directly from supplier.

Tax considerations:

• Certificate for each supplier
• You're responsible for sales tax collection
• Nexus questions around supplier locations

Model 4: Hybrid

Combination of inventory, POD, and dropshipping.

Tax considerations:

• Certificate needed for all suppliers
• Complex nexus analysis
• Consider tax automation software

Sales Tax Collection on Shopify

Unlike marketplaces, Shopify doesn't collect tax for you. You're responsible for:

Calculating Tax

Shopify can calculate tax automatically:

• Based on customer shipping address
• Uses Shopify's tax database
• Or integrate with tax services

Collecting Tax

Tax is added at checkout when:

• You've enabled collection for that region
• Customer is in a taxable state
• Product isn't exempt

Remitting Tax

You must file returns and pay collected tax:

• According to each state's schedule
• Usually monthly, quarterly, or annually
• Based on your sales volume

Tax Automation Options

Multi-Channel Selling from Shopify

Many Shopify sellers also sell on:

• Amazon
• eBay
• Walmart
• Facebook/Instagram Shops
• Etsy

Inventory Management

Managing inventory across channels requires good systems. Tools like Raidframe help Shopify sellers:

• Sync inventory in real-time
• Prevent overselling
• Track profitability by channel
• Manage orders from one place

Tax Across Channels

• Marketplaces may collect tax (marketplace facilitator)
• Shopify sales—you collect
• Keep track of what's collected where

Common Shopify Tax Questions

"Do I need to collect tax in every state?"

No—only states where you have nexus. Start with your home state, then add states as you trigger economic nexus.

"What if I use a 3PL for fulfillment?"

Storing inventory with a 3PL may create nexus in that state. Check if your provider's location triggers registration requirements.

"How do I handle international sales?"

Different rules apply:

• May need to collect VAT in EU/UK
• Tax exemptions for exports (usually)
• Consider Shopify Markets for international

"What about selling digital products?"

Digital products have different rules by state:

• Some states tax them
• Others don't
• Configure products correctly in Shopify

"Do I charge tax on shipping?"

Varies by state. Some tax shipping; others don't. Shopify handles this based on your settings.

Scaling Your Shopify Store

When to Outsource Fulfillment

Signs you're ready:

• Spending more time shipping than marketing
• Running out of space
• Missing orders or making errors
• Can't keep up with volume

A 3PL like 3PLGuys can handle:

• Receiving inventory
• Storage
• Pick, pack, ship
• Returns processing

This lets you focus on marketing and growth.

When to Automate Tax

Consider automation when:

• Selling in multiple states
• Hitting economic nexus thresholds
• Spending too much time on tax
• Worried about compliance

Checklist for Shopify Tax Compliance

1. ☐ Register for sales tax permit in home state
2. ☐ Get resale certificate
3. ☐ Provide certificate to all suppliers
4. ☐ Identify states where you have nexus
5. ☐ Register in nexus states
6. ☐ Configure Shopify tax settings
7. ☐ Set up filing reminders
8. ☐ Consider tax automation software

Get Started Today

Your resale certificate is the foundation of tax-compliant Shopify selling. Get yours and start buying inventory tax-free.

Apply for Your Resale Certificate →

Need help with Shopify tax setup? Contact us for guidance.