As of January 1, 2025, Shopify began collecting and withholding sales taxes for all orders placed through the Shop sales channel that are shipped to or within the United States. Shopify will remit these taxes through the Marketplace Facilitator Tax in all US states for all US-registered Sellers only.
This initiative is part of Shopify's efforts to streamline tax compliance for sellers. This change only affects the Shop Sales channel (3890849) marketplace and not Online.
For more detailed information on this change, click here to read more from Shopify's official documentation.
Impact on A2X Users
How A2X Handles the New Tax Collection
To aid our users in adapting to these changes, A2X has developed an update starting from February 27th 2025, that will automatically separate out the transactions related to Shopify's Marketplace Sales Tax to facilitate the mapping of these transactions to the appropriate tax liability accounts. In addition, we also made updates on the mappings of ShopCash Credit and ShopCash refund Debit to move it within the Gateway transactions bucket to offset ShopCash gateway transaction lines. This update will significantly improve the accounting accuracy of Shop sales channel related transactions.
For all A2X users who have a Shopify US-based store and are reporting the US Sales Tax, the next Shopify payment payout that is generated into A2X from the end of February that contains a MarketplaceSalesTax - 3890849 (debit) will be recorded accordingly to offset the Shopify Sales Tax collected transactions.
A2X will capture these data, and in the Payout users will see both:
The tax collected (Shopify calculating the tax) CR
And the tax remitted (Shopify paying the tax) DR
And also:
The Gateway Shop_cash (customer's redemption of their shop cash rewards for full or partial payments of the total order)
And the ShopCashCredit (Shopify crediting the amount redeemed towards the applicable payout)
What Sellers Need to Do
Although Shopify's new system handles the collection and remittance of sales tax, sellers are still responsible for ensuring that these transactions are correctly recorded. Sellers should:
Verify that your accounting software does not apply additional tax calculations to transactions already taxed by Shopify.
Adjust mappings for these new transaction types within A2X to ensure they are accurately reflected in your financial statements.
If you have auto-mapping enabled you can let A2X auto-map the new transactions to the default A2X current liability account type for the MarketplaceSalesTax - 3890849 and a Shopify clearing or ShopCash clearing account for the ShopCashCredit - 3890849 and ShopCash refund Debit - 3890849.
If you are manually mapping your Accounts and Taxes page, please keep an eye out for the new transaction and map it to the current liability account where we recommend you also have the other transactions that relate to Tax - 3890849 mapped.
Ideally, these transactions will be mapped to the same accounts which will balance out to $0.
If you’d like your existing Shopify Payments in A2X to reflect the new MarketplaceSalesTax - 3890849 and ShopCashCredit - 3890849 separately, you'll need to refresh your data. This update applies to payouts starting from January 1, 2025.
Continued Efforts for Improvement
We are continuously working to enhance the accuracy of the debit and credit transactions received from Shopify. A2X aims to provide more detailed descriptions for these line items as we strive to improve transparency, however, as these transactions are often listed as simply, a "Credit" or "Debit" in Shopify’s payout file, our ability to refine these descriptions is limited by the data made available by Shopify. If you’d like more detailed information about debits and credits in Shopify payouts, please read this article.