Why is Shopify not charging tax at checkout?

Is the tax missing, or already included in your prices?

The symptom comes in a few shapes: no order carries tax at all, one product sells untaxed, one customer never pays it, or it is missing only on draft orders or Shopify POS sales. Start from the default: Shopify displays product prices without sales tax or VAT, and taxes are added at checkout.

If you set your prices to include tax, leave Charge tax on this product selected on your product pages so that taxes are included in the displayed price. These tax-inclusive features affect how your prices are displayed, not how tax is calculated and charged to customers.

Is Shopify set up to collect tax where the order ships?

When no order shipped to a state or country carries tax, start here. Collecting is a separate step in Shopify's tax setup: after you register, you start to collect tax in each state or country. In the United States, you set up tax collection once you've registered with the tax agencies and have your sales tax ID.

Shopify's troubleshooting list for Shopify Tax has one US-only entry: a state that doesn't have tax collection activated. Go to Settings > Taxes and duties > United States and add the destination state if it isn't listed.

Our US sales tax guide covers registering with the state before Shopify collects; whether you must collect there is a question for that guide and your tax adviser.

In the EU and the UK, Shopify will only collect VAT in countries that are covered by the applicable registrations, so check that one of yours covers the destination country.

On international orders, customers might be charged additional duties and import taxes. Managed Markets and collecting duties and import taxes at checkout might also override your store's tax settings.

Is the product exempt, or covered by a tax override?

When one product sells untaxed while the rest are taxed, check the product and any override that covers it:

• Charge tax on this product is deselected. Deselecting it is the step Shopify gives for setting a product to be exempt from sales tax; for a digital product the path is the Price section, then Charge tax.
• The product isn't marked as physical. On Shopify Tax, Shopify then treats it as a digital product, and digital products might be tax-exempt in certain states.
• The product category is missing, unconfirmed or wrong. For merchants using Shopify Tax in the United States, European Union or United Kingdom, Shopify's list of possible causes names an Uncategorized product, a suggested category that isn't confirmed and an incorrect category. The list also covers incorrect tax amounts, which this page leaves aside.
• A tax override is set to 0%. The percentage you enter in a tax override is the amount to be collected, not the amount exempted, so 0% removes the tax. On Shopify Tax, overrides always take precedence over product category calculations.
• The product was added by hand to an override collection. Shopify says that after you apply a tax override to a collection, any products you manually add to it become tax exempt everywhere in your store, whether the collection is unpublished or not — a side effect covered in our answer on reusing one collection in a discount or tax rule.

If the product is a bundle, check its component products instead: tax overrides on the bundle product itself are ignored at checkout, because its individual products are added to the order separately.

Is the customer tax exempt?

When one customer's orders come through untaxed, open their profile. Tax exempt customers aren't charged any tax when they complete a checkout. The profile's tax setting reads Collect tax, Don't collect tax (no tax is collected) or Collect tax unless exemptions apply (tax is collected except for the exemptions you select there).

Customer tax exemptions always take precedence over tax overrides: an exempt customer won't be charged tax on applicable products, even if there are tax overrides in place. These customers need to check out using the same email address as the one listed on their customer account.

On a plan that supports Shopify B2B, tax exemptions can also be applied to company locations. And with Shopify Tax in the EU or UK, a B2B customer whose tax status is set to Don't collect tax is exempt on all future orders without real-time VIES validation — a status that must be configured before the customer places their order.

Did the order come from a draft or Shopify POS?

By default, a draft order includes taxes based on your store's tax settings and the customer's shipping address, or their billing address if no shipping address is on file. Under Estimated tax, though, each draft has a Charge taxes checkbox that can be deselected; our draft orders guide explains how tax is worked out on a draft.

If you test Shopify Tax with draft orders, add a shipping method first: draft orders require one to calculate taxes, and a shipping rate of zero is enough.

For Shopify POS, store locations must be included in your shipping zones for taxes to be calculated correctly. Tax overrides apply to POS sales as well as online ones.