Why Am I Being Charged Sales Tax on My Wholesale Order?
Wholesale Sales Tax ExplainedWe receive questions from time to time regarding sales tax applied to wholesale orders. This page is designed to clearly explain why tax may appear at checkout, how resale certificates work, and what is required to remove sales tax from qualifying accounts. Why Is Sales Tax Being Charged on My Wholesale Order?Hero Medallions does not manually apply sales tax to orders. Sales tax is calculated automatically by Shopify’s tax engine based on:
If tax appears at checkout, it means Hero Medallions does not currently have a valid resale certificate on file for your account, and therefore your account is not marked tax-exempt within Shopify. How Shopify Calculates Sales TaxShopify is legally required to calculate and collect sales tax in states where tax collection obligations exist. The system applies tax automatically unless a valid tax exemption is properly documented and attached to the customer account. Hero Medallions cannot override or manually suppress tax within Shopify’s checkout system. What Is a Resale Certificate?A resale certificate (sometimes called a reseller’s permit or sales tax exemption certificate) allows a business to purchase goods tax-free when those goods are being resold to an end customer. In simple terms:
However, this exemption only applies when a valid resale certificate is on file. Common Misunderstanding: “We Charge Our Customers State Sales Tax”We frequently hear: “Why are we paying sales tax to you? We charge our customers state sales tax.” Charging your customers sales tax in your state does not automatically exempt your wholesale purchases from tax. Tax exemption applies only when:
Without that documentation, Shopify must calculate tax in accordance with applicable state and local rules. What Happens If No Resale Certificate Is On File?If no resale certificate is on file:
If tax was charged because documentation was not on file, you may consult your accountant regarding whether it can be claimed appropriately in your bookkeeping. How to Submit Your Resale CertificateIf you are a qualified reseller and would like your account reviewed for tax exemption:
Once approved, your account will be marked tax-exempt in Shopify and future qualifying purchases will not have sales tax applied. Frequently Asked QuestionsCan you remove the tax from my order manually?No. Sales tax is calculated automatically by Shopify’s system based on account status and state and local rules. If I submit a resale certificate today, will it remove tax from a previous order?Tax exemption applies to future qualifying orders after documentation is reviewed and approved. We are a wholesale customer. Shouldn’t tax automatically be removed?Wholesale pricing and tax exemption are separate matters. A wholesale discount does not automatically mean tax exemption status. We collect sales tax from our customers. Why do we still pay tax to you?Because resale exemption requires documentation. Without a valid certificate on file with Hero Medallions, Shopify must collect tax when applicable. Final ClarificationHero Medallions does not set tax rates and does not manually control tax collection. Tax calculations are handled automatically by Shopify in compliance with applicable state and local regulations. Providing proper resale documentation ensures your account is correctly configured and prevents unnecessary tax charges on qualifying wholesale purchases. We value our wholesale partners and are happy to assist in reviewing proper documentation to ensure your account is set up correctly. |
Wholesale Sales Tax Explained
Questions about sales tax on wholesale orders come up occasionally. Here is a clear explanation of why tax may appear and how resale certificates work.
Why Is Tax Being Charged?
Sales tax is calculated automatically by Shopify based on:
- Your shipping destination
- Your account’s tax exemption status
- State and local tax laws
If tax appears at checkout, Shopify does not have a valid resale certificate on file for your account.
How Tax Exemption Works
A resale certificate allows you to purchase products tax-free when you are reselling them to your customers.
You then:
- Collect sales tax from your customer (if required by your state)
- Remit that tax to your state
However, exemption only applies when documentation is submitted and approved.
Common Misunderstanding
Charging your customers sales tax in your state does not automatically exempt your wholesale purchases.
Without a valid resale certificate on file, Shopify must apply tax when applicable.
If No Certificate Is On File
- Tax will be automatically calculated.
- Hero Medallions cannot manually remove it.
- Future exemption requires documentation.
How to Submit Your Certificate
- Email your resale certificate.
- Include your business name and account email.
- Allow 1–2 business days for review.
Once approved, your account will be marked tax-exempt moving forward.
FAQ
Can you remove tax manually?
No. Shopify controls tax calculation.
Does wholesale pricing remove tax?
No. Pricing tiers and tax exemption are separate.
Will submitting a certificate fix past orders?
Exemption applies to future qualifying orders after approval.
We appreciate our wholesale partners and are committed to helping ensure your account is properly configured.