Managing multiple Shopify stores? Follow these tax compliance tips

On Shopify, sellers are focused on growth. That might mean adding new products, expanding across borders, or setting up multiple stores on the platform.

Each of these exciting frontiers carries its own set of logistical considerations, and accounting for tax compliance ranks highly among priorities. Running multiple Shopify stores, for example, introduces a number of complexities that are not easily managed by the platform’s native capabilities. 

Tax compliance cannot be overlooked, but it doesn’t need to slow down the growth of your aspiring ecommerce empire. Avalara’s new guide, Solving top tax compliance challenges for Shopify businesses, offers in-depth guidance and expert tips to help merchants set themselves up for success. In this post, we’ll zero in on a specific scenario and highlight best practices for scaling seamlessly. 

The number of shoppers placing an order with Shopify merchants has increased by 47.7% since 2020. (Backlinko)

Shopify enables customers to create up to 10 stores from a single account, each with a unique domain, dashboard, and customized settings. Note that new stores will require their own subscription fees. 

There are a number of reasons a Shopify merchant might want to set up multiple storefronts, such as:

• Selling in different countries or regions: Separate storefronts can be tailored to different languages, currencies, etc.
• Creating microsites for specific products or sub-brands: Give each one its own look and feel. 
• Segmenting B2B versus B2C: The process for purchasing as a consumer versus as a business tends to be different, and different stores can accommodate for the different experiences.
• Managing complex corporate structures: Larger enterprises often have elaborate business frameworks — e.g., parent and subsidiary companies — that multiple Shopify stores can help accommodate. 

Shopify merchants can also add up to 20 subdomains (up to 1,000 on Shopify Plus plans) but this is not the same as setting up additional stores, since the URLs will point back to your main storefront. For step-by-step guidance on setting up multiple Shopify stores and overcoming common obstacles, Omnisend has a helpful primer.

Several tax compliance implications can arise for businesses operating more than one storefront on Shopify. It’s important to keep these on your radar and implement proactive solutions if any of these scenarios apply to you.

Tax compliance across different jurisdictions

Running multiple Shopify stores often means selling in different regions, countries, or even continents. This can make your sales subject to a varying array of nexus complications, thresholds, and tax rates. And that’s only within the United States. For those with different stores selling in different countries, factors like VAT and GST come into play, adding more layers of complexity.

If you’re running stores in only a couple of different states or countries, you might be able to keep track of all these obligations manually with Shopify’s native capabilities. But if your ecommerce business has already scaled beyond that point, or plans to, investing in automation software is crucial.

Product-specific taxation

Ever-changing product taxability rules and complex bundling regulations can be a challenge for ecommerce businesses of all kinds, especially those selling different products across different stores and locations. 

As explained in Solving top tax compliance challenges for Shopify businesses, “Although Shopify provides merchants with the ability to set up tax overrides and custom rules, they must be manually configured. As you might imagine, keeping track of all these details is an extraordinary challenge.” 

When you take advantage of solutions that automate tax calculations based on factors like product category and jurisdiction-specific rules, you can stop worrying about charging the wrong rates and upsetting customers. Avalara for Shopify can verify SKU-level tax rules for millions of product and service universal product codes (UPC) and thousands of tax code categories.

Consistency in tax setups and reporting across stores

Running multiple stores on Shopify means you’ll need to ensure tax settings are configured properly for each. For example, a merchant selling to U.S. and Canadian customers on separate Shopify stores must follow different tax filing deadlines, remittance methods, and reporting formats. And this can’t be a set-it-and-forget-it exercise, because rates and exemptions change all the time. 

Using one central tool for unified data and consolidated reporting helps you accurately report and remit taxes across different stores and jurisdictions.

Managing multiple Shopify stores opens doors for growth but also adds tax compliance barriers. From varying tax rules across jurisdictions to keeping settings consistent, staying compliant can be complex and time-consuming. Automating these processes helps reduce errors and keeps operations running smoothly.

Avalara for Shopify automates tax calculations, product taxability, and multijurisdiction reporting, and there is no limit or extra cost for using the solution in multiple stores, subdomains, or even companies. With this peace of mind, merchants can focus on growth — not tax headaches. 

Whether expanding globally or launching new product lines, Avalara ensures compliance and efficiency, making tax management seamless across multiple storefronts.

Want to learn more about the best practices of tax compliance on Shopify? Explore our free ebook full of expert insights, or check out our guide showing how Avalara solves seven real-world challenges faced by Shopify sellers.