Does Shopify collect sales tax when dropshipping from AliExpress to the US?

AliExpress charging sales tax depends on what state you are dropshipping to. Each US state has different rules for their sales tax. In general, you must charge sales tax in states where you have a ‘nexus’. A nexus is a legal term for when you have a sufficient physical presence in that state (for example a physical store, or if you live in that state).

If you have a nexus in a state that you want to dropship to, then you must have a sales tax permit which you can register for online.

If you do not have a nexus in the state that you are dropshipping to, then you may be exempt from charging sales tax.

So when thinking about dropshipping tax requirements, AliExpress items may have a sales tax charge, depending on where they are being shipped to in the US.

How to charge sales tax on Shopify? – You can have Shopify collect sales tax for you by going to ‘Settings’ on your Shopify dashboard and selecting ‘Taxes’.

Under ‘Tax Rates’, select ‘United States’. Here you can let Shopify know where you have a physical presence (for your nexus).

Then, select ‘Products’ and choose the products that you want to charge sales tax on. Scroll down to the ‘Pricing’ section, select the check-box ‘Charge taxes on this product’ and then ‘Save’.

Now, Shopify will automatically collect the right amount of sales tax for the order.