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Shopify Empowers Retailers with New Collective App and Automated Tax Filing

Shopify has announced the rollout of its Collective app, designed to streamline the process for suppliers and retailers to connect and transact. Alongside this, the e-commerce giant is enhancing its tax capabilities with automated filing options, aiming to simplify compliance for businesses operating across various jurisdictions.

Key Takeaways

  • Shopify Collective allows suppliers to easily share product catalogues and pricing with retailers.
  • Retailers can import products from suppliers and sell them on their own Shopify stores.
  • Automated tax filing options are being introduced to ease the burden of sales tax compliance.

Shopify Collective: A New Era for Wholesale

Shopify Collective acts as a bridge between suppliers and retailers, enabling a more integrated wholesale experience. Suppliers can install the "Collective: Supplier" sales channel to offer their products to other Shopify retailers. This allows them to reduce operational costs and expand their reach without significant investment in marketing.

Suppliers can create private price lists for specific retailers or public price lists for broader access. Retailers can then import these products into their own stores, setting their own retail prices. Once a sale is made, the order is automatically sent to the supplier for fulfillment and direct shipping to the customer.

To utilise Shopify Collective, stores must meet several requirements, including having an active Shopify plan, being based in a supported country with a supported currency, and activating Shopify Payments. For businesses in the UK and EU, using Shopify Tax, Basic Tax, or a third-party tax app is mandatory, along with verified tax registration.

Streamlining Tax Compliance with Automated Filing

In parallel with the Collective app launch, Shopify is enhancing its tax services with automated filing options. This feature aims to significantly reduce the manual effort involved in sales tax remittance.

Shopify Tax, when enabled, can automatically calculate, collect, and file sales taxes in eligible jurisdictions. The system supports automated filing in numerous US states, with a comprehensive list available for businesses to check their eligibility. This move is expected to provide greater certainty and efficiency for merchants navigating complex tax regulations.

Eligibility and Considerations

While Shopify Collective offers powerful new tools, certain limitations and requirements apply. The "Pause and Build" plan is not compatible with the app, nor are digital products or gift cards. Furthermore, Shopify Collective does not support features like Managed Markets, in-person Shopify POS sales (though products can be added to POS for ordering), Pickup in store, or Metafields. However, it is compatible with product bundles, subscriptions, and Shopify Flow.

For automated tax filing, eligibility is determined by the store’s location and the specific tax jurisdictions it operates within. Shopify provides detailed lists of supported countries and currencies for Collective, and specific states for automated tax filing, ensuring businesses can ascertain their suitability for these new features.

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