# Do I Need to Charge Tax on Shopify When Dropshipping in 2026?

Canonical: https://trykintsugi.com/blog/do-i-need-to-charge-tax-on-shopify-when-dropshipping
Published: 2025-01-15

Understand physical, economic, and marketplace nexus obligations for Shopify dropshipping businesses.

Shopify dropshippers must determine where they have sales tax nexus before
deciding where to collect tax. The answer is based on the seller's
connections to each state, not simply on where the supplier ships from.

## Three types of nexus

| Type | How it can arise |
| --- | --- |
| Physical nexus | An office, employee, inventory, or warehouse |
| Economic nexus | A state-specific sales or transaction threshold |
| Marketplace nexus | Rules connected to a platform that facilitates sales |

Thresholds vary. Many states use a $100,000 sales threshold, while others use
a transaction count or both. California and Texas use higher thresholds, and
rules change, so confirm current requirements for every state where you sell.

## Shopify's role

Shopify can calculate tax using configured settings, but merchants remain
responsible for determining obligations and filing where Shopify does not
collect and remit on their behalf. Marketplace facilitator treatment also
varies by state.

## Staying compliant

Register in states where you have an obligation, configure product and
shipping taxability correctly, maintain resale certificates, and keep records
of direct versus marketplace-facilitated sales.

Kintsugi can monitor nexus, calculate tax, and support registration and filing
across the states where a Shopify business is responsible for compliance.