Account Setup FAQs

During onboarding, Kintsugi reviews your sales data, tax collection history, product categories, exemptions, and nexus exposure to help determine where you may have sales tax obligations. Below are answers to common questions merchants have during this process.

What is the difference between collected tax and tax liability?

Collected tax is the sales tax you have charged and collected from your customers.

Tax liability is the amount of sales tax you may owe to a state based on your nexus status, registration timeline, taxable sales, product taxability, and any applicable exemptions.

These two numbers may not always match. For example, you may have had tax liability in a state before you began collecting tax there, or you may have collected tax before registering in that state.

How can I make sure I am collecting tax from my customers?

Tax collection settings depend on the platform or sales channel you use.

Shopify

In Shopify, you must turn on “Collect tax” for each state where you are registered and required to collect sales tax. If this setting is not enabled, Shopify may not collect sales tax from customers in that state, even if you are registered there.

QuickBooks

QuickBooks offers sales tax calculation features that can be added to invoices. Some merchants may also use third-party tools or integrations to calculate and collect tax on their behalf. Keep in mind that not all third-party tools remit collected tax for you. Some only calculate or collect tax, while others may also support filing and remittance.

Amazon

Amazon generally collects and remits marketplace sales tax on your behalf in states with marketplace facilitator laws. However, you may still have sales tax obligations outside of Amazon, especially if you sell through other channels such as Shopify, QuickBooks, your own website, or wholesale transactions.

Why is there a large difference between my collected tax and tax liability?

A difference between collected tax and tax liability can happen for several reasons.

Common causes include:

1. You crossed the nexus before you started collecting tax

If you met nexus in a state before turning on tax collection, you may have tax liability for sales made during the period when you were not collecting tax from customers.

2. Tax collection was not turned on

If your sales platform was not configured to collect tax in a registered state, your collected tax may be lower than your estimated liability.

3. Product categories need to be reviewed

Product taxability can vary by state. If your products are not categorized correctly, your tax liability estimate may be higher or lower than expected.

During onboarding, make sure your product categories are accurate so Kintsugi can apply the correct taxability rules.

4. Exemptions may be missing

Some customers or transactions may be exempt from sales tax. For example, a customer may have a valid exemption certificate or may be marked as tax-exempt in your customer profile.

If exemptions are missing from your data, your tax liability may appear higher than expected.

5. Your collection start date differs from your nexus date

Collected tax usually reflects when you actually began charging tax. Tax liability may be calculated based on when you first crossed the nexus, which could be earlier.

Why do I see different nexus dates?

You may see different nexus dates because there are different ways a sales tax obligation can be triggered.

Collected Tax Nexus

Collected Tax Nexus shows the first date you collected sales tax from a customer in a particular state.

If you collected tax before registering in that state, you may need to either refund the collected tax to customers or register and remit the tax collected, depending on your situation.

Physical Presence Nexus

Physical Presence Nexus may be created when your business has a physical connection to a state.

Examples include:

• Storing inventory or products in a state

• Having employees, contractors, or representatives conducting business in a state

• Making sales or performing business activities from a physical location in a state

Economic Nexus

Economic Nexus is based on sales activity in a state. You may meet the economic nexus after exceeding a state’s sales threshold, transaction threshold, or both.

Some states use a dollar amount threshold, some use a transaction count threshold, and some use both.

What registration date should I enter for a new registration?

If you have more than one type of nexus in a state, use the earliest nexus date as the registration date.

Using the earliest applicable date helps ensure your registration aligns with when your obligation may have started and supports a more compliant filing process.

For example, if you met the physical presence nexus before the economic nexus, use the physical presence date. If you crossed the economic nexus before collecting tax, use the economic nexus date.

What should I do if my sales in Kintsugi do not match my records?

If the sales totals in Kintsugi do not match your internal records, contact a member of the Kintsugi team so we can review your data.

Common items to check include:

• Whether all sales channels have been connected

• Whether Kintsugi has received all the required transaction data

• Whether product categories are mapped correctly

• Whether exemptions and exemption certificates have been added

• Whether customers marked as exempt in your platform are also reflected correctly

• Whether marketplace sales, refunds, discounts, or adjustments are being handled correctly

The more complete and accurate your onboarding data is, the more accurate your nexus analysis, liability calculations, and filing setup will be.

Need help?

If anything looks incorrect or unclear during onboarding, reach out to the Kintsugi team. We can help review your data, confirm your product categories, check exemptions, and ensure your sales tax setup is aligned with your business activity.