Acutrack has a presence in California and your products are being fulfilled from our California fulfillment center. Under sales tax law, physical presence including warehousing and fulfillment activity can establish a nexus in a state. Because Acutrack serves as your fulfillment arm, your business has a nexus in California regardless of where your business is headquartered.
What is nexus, and why does it matter?
Nexus is the legal connection between your business and a state that requires you to collect and remit sales tax to that state. Nexus can be established through several factors, including:
- A physical office or business location
- Warehousing or inventory storage
- Fulfillment operations
Because your products are stored and shipped from Acutrack's California facility, California nexus applies to your business.
Does this mean I need to collect sales tax in both California and my home state?
Yes, in most cases. You will generally need to collect sales tax in:
- Your home state where your business is registered and operates
- California where fulfillment and warehousing occur through Acutrack
Is it standard for an ecommerce platform to enable tax collection in multiple states?
Yes. Shopify's tax settings are designed to reflect every state where your business has nexus. If California and your home state are both listed, it means the system has identified taxable presence in both locations. This is expected and appropriate when using a third-party fulfillment center like Acutrack.
What should I do to make sure I'm configured correctly?
We recommend the following steps:
- Confirm your nexus states at minimum, your home state and California should be enabled in Shopify
- Register with the California Department of Tax and Fee Administration (CDTFA) if you have not already done so, as California requires businesses with nexus to be registered before collecting tax