Understanding Shopify Tax Plans and Sidr Tax Compatibility

Understanding Shopify Tax Plans and Sidr Tax Compatibility

When setting up sales tax management for a Shopify store, it is important to understand how Shopify’s own tax plans differ and how they integrate with Sidr Tax services. This helps ensure your setup is both cost-efficient and fully compliant.

Shopify’s Basic Tax Plan vs. Paid Plans

Shopify offers a free Basic Tax Plan, which includes its built-in tax engine. This plan automatically calculates sales tax based on store location, customer location, and product taxability settings. It handles tax rate determination and calculation in real time during checkout.

Paid Shopify Tax plans expand beyond calculation. They may include additional tools for advanced reporting, filing help, or customized support. These paid options are beneficial for merchants who rely entirely on Shopify for end-to-end tax handling within the platform. However, the primary difference is that while the paid plans offer convenience features, the tax calculation itself uses the same core Shopify tax engine as the free plan.

Sidr Tax’s Role and Integration

Sidr Tax is not a tax engine. Instead, it connects with Shopify’s existing tax engine to import accurate tax data. Once that tax data is in place, Sidr Tax provides specialized services that Shopify’s plans do not directly handle, such as:

• Sales tax registration and account setup across multiple states
• Nexus monitoring and reporting for physical and economic presence
• End-to-end sales tax filing and remittance support

Sidr leverages Shopify’s tax calculation capabilities but focuses on the compliance side—ensuring merchants meet their state-level obligations and jurisdictional breakdowns properly.

Compatibility and Best Practices

Sidr Tax works seamlessly with all Shopify Tax plans, including Basic and paid tiers. However, there is no added benefit to combining Sidr Tax with Shopify’s paid tax plan, since both services overlap in certain management functions. The most efficient configuration is to remain on the Shopify Basic Tax Plan, using it exclusively for its tax engine functionality, while relying on Sidr Tax for registration, nexus tracking, and filing services.

This setup ensures you avoid redundancy, save on monthly costs, and still benefit from accurate tax calculations paired with full compliance coverage.

Updated on: 02/17/2026