Who We Help · E-commerce · Shopify & DTC
Shopify brands: nobody is collecting US sales tax for you.
The single most expensive misunderstanding in DTC: Shopify is not a marketplace facilitator. Unlike Amazon or Etsy, it never collects or remits US sales tax for your storefront — you are the merchant of record in every state you cross a threshold in. Canadian brands scaling US ads cross those thresholds faster than they think.
By the AnalytIQ Accounting team · Last reviewed: August 12, 2026
At a glance · Shopify sellers
Not sure which applies to you? Get a free proposal or book 15 minutes.
Where nexus actually starts for a Canadian brand
| Trigger | The 2026 reality |
|---|---|
| Most states | $100,000 in sales — the standard economic nexus trigger |
| California, Texas, New York | $500,000 (New York also requires 100+ transactions) |
| Transaction counts | Dying out — 17 states have repealed the 200-transaction test; dollar volume is what to watch now |
| US 3PL inventory | Physical nexus in that state from day one, regardless of revenue |
| Shop channel orders | The one exception — Shopify collects and remits on Shop-channel sales |
Once you trip a threshold, you register, collect, and file in that state — and in California the obligation runs through the rest of that year and the next. We monitor thresholds as you scale so registration happens on time instead of after the audit letter.
Landed cost is the new conversion killer
With the US$800 de minimis gone, every parcel into the US clears customs. Ship duties-unpaid (DDU) and your customer gets a surprise carrier bill — then a chargeback. The working model is DDP with landed-cost calculation at checkout, priced off correct HS codes. Canadian-made goods with CUSMA origin certification still enter at preferential rates; imported-then-reshipped goods don't. Your duty exposure is a product-catalogue question, and we map it SKU by SKU.
The federal and Canadian layers
Shipping from Canada with no US warehouse usually means no US permanent establishment — no US federal income tax under the treaty, claimed via a protective 1120-F + 8833 once revenue is meaningful. A US 3PL changes the state analysis the way FBA does for Amazon sellers. Canadian side: US orders are zero-rated exports that still count toward the $30,000 GST/HST threshold; registration recovers the GST on your ad spend, apps, and inputs as credits.
DTC books that survive diligence
Multi-gateway payouts, holdbacks, refunds, and inventory across a 3PL make Shopify books messy fast. We keep the gross-to-net trail clean in QuickBooks or Xero — margins you can trust and statements a lender or acquirer will accept.
Sources: TaxConnex — Shopify facilitator status · Avalara — threshold repeals.
What we take off your plate
Cross-border tax for Shopify sellers, handled.
- State economic nexus tracked as US revenue crosses each state threshold
- US wholesale and 3PL inventory checked for permanent establishment risk
- Canadian and US returns prepared by one team
- Treaty positions and foreign tax credits lined up
- FBAR and T1135 foreign reporting
- ITIN applications certified in-house
Mistakes we fix
Three things that go wrong for Shopify sellers.
- Booking the net Shopify Payments payout as revenue instead of grossing up fees and refunds
- Assuming Shopify remits US state sales tax the way a marketplace facilitator does
- Expensing dead inventory instead of writing it down to the lower of cost and fair market value
Recognise one? Book a call and we will tell you what it is costing you.
Services for Shopify sellers
Six services, one team that knows how Shopify sellers run.
Start with one. Add the rest when it makes sense; the books, payroll and tax already talk to each other.
Free proposal
A fixed fee for your cross-border tax work, in writing.
- Tell us about your business. The form takes about a minute.
- A short discovery call. Fifteen minutes to confirm what you need.
- A fixed fee in writing. We reply within one business day. No hourly surprises.
- Canadian and US filings under one roof
- Cloud-first: QuickBooks Online, Dext, Wagepoint
- Brampton, Ontario, with clients across Canada and the US
Common questions.
We do about US$300K/year across many states. Where do we stand?
Likely under the threshold in most states and possibly over in a few — it depends where your customers concentrate. A nexus review answers it state by state, usually in one sitting.
Can we just not collect and absorb it if a state calls?
Uncollected sales tax comes out of your margin with penalties and interest, and it survives into diligence when you raise or sell. Registering on time is dramatically cheaper.
Does the Canada-US treaty protect us from state sales tax?
No — the treaty binds the federal government only. States tax on their own rules, which is why nexus tracking matters even when you owe no US federal income tax.
Related reading
Scale the brand, not the back taxes.
Book a consultation and get a plain answer on exactly what applies to you.