Shop Channel Marketplace Sales Tax

SHOP Channel Marketplace Sales Tax

SHOP channel is Shopify's marketplace channel that works similar to Amazon, Ebay, etc. You may see “$ (amount) in Marketplace Sales tax was collected by Shop.” If you are also selling through your standalone website, you will still need to remit sales tax directly.

Fortunately, our app recognizes those marketplace channel orders automatically to prevent duplication of payment. As a result, in our sales tax filing we automatically exempt SHOP channel as marketplace sales for you, so you won't be double-paying sales tax. There will be no need for further action on your end!

Difference between Shop Pay and Shop App

SHOP Pay

Accelerated checkout/payment method for faster, one-tap purchases on Shopify stores and in the Shop App.
Only a payment method; does not affect how sales tax is handled or remitted.
Orders placed using Shop Pay on your own online store are not* considered marketplace orders for tax purposes.

SHOP App

Mobile shopping marketplace where customers can discover, buy from, and track orders from multiple Shopify merchants.
Orders placed through the Shop App are considered marketplace transactions, like Amazon or eBay.
For US sellers, Shopify automatically collects and remits sales tax on Shop App orders because it acts as a marketplace facilitator.
Tools like Sidr Tax automatically exempt Shop App orders from manual tax remittance, since Shopify handles it.

SHOP App Sales

You can review your SHOP app sales in Sidr sales tax reports. Navigate to the reports page, If you have transactions through the SHOP channel, you will see it in the marketplace section.



Rest assured that Sidr Tax automatically exempts SHOP channel sales when we file for you!

In short:

Shop Pay is just a fast checkout option, while the Shop App is a marketplace. Only orders placed through the Shop App have sales tax automatically collected and remitted by Shopify.

Updated on: 06/13/2025