How is tax calculated on Shopify Collective transactions?

Whether tax is calculated on the retail price or the cost price, and where it's payable, depends on where the supplier and customer are located. For most countries outside the US, tax is calculated on the cost price and payable in the retailer's location. For US suppliers, most states calculate tax on the cost price, with California and Massachusetts calculating on the retail price instead; the payable location depends on whether the customer is in the US or elsewhere.

Shopify provides worked examples showing how B2B tax (on the supplier-retailer transaction) and DTC tax (on the customer's purchase) interact under both tax-exclusive and tax-inclusive pricing setups, but you should confirm the specifics with a tax professional for your own transactions.