From October 23, Shopify will start calculating tax on return shipping fees for US returns. It happens automatically for stores on Shopify Tax or Tax Platform.
For most stores this is a non-event. For stores that built a workaround to handle that tax themselves, it is a deadline, because the same tax can now get counted twice.
Here is what Shopify announced, who it actually touches, and where I would go looking for a forgotten workaround before the date arrives.
Table of contents
What changes on October 23
Shopify posted the change on September 25. In its words, return shipping fees will be taxed like any other shipping charge.
Today, a return shipping fee can show up on a return with $0 tax. After October 23, Shopify calculates the applicable tax and applies it for you.
The tax amount shows next to the return shipping fee when you create a return, and it is included in the total return tax. Shopify's community announcement adds that it may also appear in return totals, refund summaries, and supported return APIs.
Your existing shipping tax settings still decide the outcome. If shipping is set as untaxed in a state, return shipping fees in that state stay untaxed.
Who it touches and who it doesn't
Two conditions have to be true: the order shipped to a US address, and the store uses Shopify Tax or Tax Platform.
It only matters if you charge a return shipping fee in the first place. If you offer free return shipping, or returns carry no return shipping fee, there is nothing new to tax.
Shopify lists the cases where tax is not calculated on the fee: orders shipped outside the US, stores using Manual Tax or Basic Tax, and tax-exempt orders.
Restocking fees are not part of this. Shopify's help page says restocking fees are never taxed, and the announcement also excludes handling fees.
The required action is narrow. If you use a manual process to calculate, collect, or reconcile tax on return shipping fees, review it before October 23. Everyone else has nothing to do.
Where a manual workaround usually hides
Nothing in this section is a Shopify claim. This is my read, from running store backends, on why "no action needed" deserves ten minutes of checking anyway.
The trouble with workarounds is that the person who set one up is often not the person running returns today. So "do we have one?" is a question worth asking out loud.
In the bookkeeping, not the store
The most likely place is outside Shopify entirely. A bookkeeper or accountant may be adding this tax in a spreadsheet or in the accounting tool at month end.
They will not see a Shopify changelog post. Someone has to tell them.
In a returns app or integration
If returns run through a third-party app, I'd check whether it does its own tax math on the return fee, and whether it reads return data from Shopify.
Shopify says the tax may now appear in supported return APIs. Anything that consumes those numbers and then adds its own could stack the two.
In the support team's habits
Support agents quote refund amounts to customers. If a macro or a saved note tells them what a return "costs," the real number in the refund summary may no longer match it.
A customer who is told one refund amount and receives another writes back. That is avoidable with one message to the team.
The bigger picture: returns are where small numbers leak
This change is good news. Shopify frames it as making return tax more accurate and removing the need to calculate it by hand, and one less manual step is one less thing to get wrong.
But the returns side of a store rarely gets the attention the order side does. I made a similar point about the fulfillment mistakes that quietly kill repeat purchases: the damage usually comes from small things nobody owns.
It also lands about a month before peak season, when return volume follows order volume. A double-counted few cents per return is harmless in a quiet week and annoying to unwind after a busy one.
So I'd treat October 23 as a prompt to look at the whole returns setup once, not just this one line.
What I'd check before October 23
- Confirm which tax service the store uses. This change only applies on Shopify Tax or Tax Platform.
- Open your return rules and note whether you charge a return shipping fee, offer free returns, or have customers buy their own label.
- Ask your bookkeeper or accountant directly: "Do you add or adjust tax on return shipping fees anywhere?" If yes, agree on stopping it from October 23.
- If you use a returns app or a custom integration, ask the vendor or developer how it handles tax on return fees and whether it reads Shopify's return totals.
- Check your shipping tax settings by state, since those decide whether the return fee gets taxed at all.
- Tell support that refund summaries on US returns may show a tax line on the return shipping fee, and update any macro that quotes a fixed amount.
- After October 23, create one test return on a US order and read the tax line before you trust it at volume.
If none of those turn up a workaround, you are done. That is the best outcome, and now you know it instead of assuming it.
Source: Shopify Changelog, September 25, 2026, with detail from the Shopify Community announcement and the Shopify Help Center page on return rules.
Frequently asked questions
Do I need to do anything before October 23?
Only if you use a manual process to calculate, collect, or reconcile tax on return shipping fees. Shopify says to review it before October 23 to avoid double-counting. Otherwise no action is needed.
Does this apply to restocking fees?
No. Shopify's help page says restocking fees are never taxed, and the announcement also excludes handling fees and return fees outside the US.
What if shipping isn't taxed in a state I sell to?
Your existing shipping tax settings stay in effect. If shipping is configured as untaxed in a state, return shipping fees in that state stay untaxed.
Does it affect stores that don't use Shopify Tax?
According to Shopify's help page, tax is not calculated on return shipping fees for stores using Manual Tax or Basic Tax. The change covers Shopify Tax and Tax Platform, on orders shipped to US addresses.