Are we considered having “nexus” without a physical office?

Asked 4 years ago

I manage an online store from my house, so do I have tax nexus in Canada with a Shopify store if I live in Canada. The concept of state sales tax is confusing to me, especially when it's related to a globally shipping Shopify store.

Tax Nexus Economic nexus Physical nexus

Abeeha Qasmi

Saturday, September 11, 2021

You need to pay Shopify taxes dropshipping if you are selling on Shopify. While the Shopify tax nexus is only applicable to you if you own some physical office or store in the country you are selling in.
Sale tax nexus is of two types: physical nexus and economic nexus.
As the name suggests, physical nexus refers to the owning and running of the physical business: outlet or retail shop. On the contrary, economic nexus applies to companies that exceed a specific amount of state revenue. In such a case, they might have to register their business to pay sale taxes.
If your business fit in any of the two categories, you have to pay nexus.

Avik Das

Saturday, October 23, 2021

If you have or own a physical office in another or in your state, then you would need tax nexus. As you run the business from your house, it is technically a physical space and an office. Therefore, tax nexus would be applicable here. However, different states have different nexus amounts but you would still be considered having nexus in your state.