How is sales tax handled on TikTok Shop, and who is responsible for filing it?
TikTok, as the marketplace facilitator, is responsible for collecting sales tax from buyers on TikTok Shop, and for reporting and remitting it to the appropriate tax authorities, in accordance with marketplace facilitator laws.
For more information, please refer to TikTok Shop Academy: US Sales Tax FAQ (https://seller-us.tiktok.com/university/essay?knowledge_id=77147478607658)
Will the seller receive the sales tax amount from TikTok?
No, the sales tax paid by customers is collected by TikTok and will be excluded from the seller’s payouts.
If you want to prevent sales tax data from being sent to your Shopify store or any downstream systems like Avalara, NetSuite, or other ERP systems, you can easily do so by adjusting your ShoppeDance settings.
Can I choose not to send sales tax data to my Shopify store?
Absolutely! To stop sales tax data from being transmitted to your downstream systems, simply enable the [Remove Sales Tax] setting in ShoppeDance VeriSync. You can find this option by visiting your ShoppeDance VeriSync settings.
"Remove sales tax as a line item and from the order total" refers to the tax line item in Shopify order detail. If you remove this amount, we will automatically deduct this amount from the order total.
"Subtract the sales tax amount from the total paid by the customer" refers to the "Paid" value in Shopify order detail
What to Expect When You Enable These Settings
When you enable both options:
TikTok Shop seller center shows a sales tax of 0.66 USD
The sales tax of $0.66 has been removed from the tax, total, and paid line items on the Shopify order.
When you issue a refund from TikTok Shop seller center, the order status gets synced to Shopify
When you only remove sales tax from order total, but keep it in the amount paid by customer:
The sales tax of $0.66 has been removed from the tax and total line items on the Shopify order, but it remains in the paid line item.
Shopify may indicate that "a refund is owed" if the customer paid amount is more than the order total, as shown below.
