Product categorization in Shopify directly determines how sales tax is applied during checkout. Assigning the correct categories ensures your store complies with regional tax regulations.
If products are miscategorized—for example, labeling taxable items incorrectly as "Apparel & Accessories"—you might accidentally charge incorrect tax rates or fail to collect required taxes.
Proper categorization helps you:
Accurately calculate taxes for different regions.
Prevent incorrect tax charges.
Avoid potential compliance issues with tax authorities.
Always review and confirm your product categories to ensure accurate sales tax collection.
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