Shop App/Channel Transactions Not Flagged as Marketplace Sales - Tax Compliance Issue

GraphQL Admin API Troubleshooting
1

Issue:

Shop channel orders are returning isMarketplace: false in the API, but should return isMarketplace: true per your documentation.

Expected behavior:

Per your July 2023 changelog, the isMarketplace field on ChannelDefinition should identify marketplace channels like Shop.shopify

Shop channel transactions should be flagged as marketplace sales (similar to Facebook Shops, Buy on Google) since Shopify collects, remits, and files tax on these orders as a marketplace facilitator.

What we’re seeing:

  • orders.channelInformation.channelDefinition.isMarketplace returns false for Shop app channel orders

  • This causes our system to treat them as direct sales, not marketplace facilitator sales

  • Creates tax compliance risk and potential double-filing

  • Contradicts documents
    Shopify has remitted the tax on these since 1 Jan 2025 (https://help.shopify.com/en/manual/online-sales-channels/shop/sales-tax

  • Further contradicts information which Shopify provided one of our clients previously provided which is as follows - They have confirmed that the Shop App does not calculate marketplace sales tax for stores with a billing address in the UK.

  • This change seems to have taken between the 28th of May 2026 and 3rd of July 2026, when this field suddenly changed the way it was showing up.

Impact:

We cannot properly exclude these from our tax liability calculations in states where we have nexus.

What we need:

Can you confirm if this is a known bug with the isMarketplace field for Shop channel, or if there’s a different field we should be using to identify these as marketplace facilitator sales?

OR are Shopify now in fact not treating shop app transactions as a marketplace?

This is blocking accurate tax filing. Please advise.
We have 100s of clients effected by this, so the significance of compliance failure is large.

2

@Liam-Shopify bringing this to your attention as I think this is a serious misclassification by Shopify, we have encountered 10s of thousands of transactions across 100s of our clients which show this issue.

3

Hey @Jared_Fisher - thanks for flagging this. I definitely understand the urgency given the potential tax-compliance impact and the number of transactions involved, and I’m happy to look into this on our end.

Just a quick housekeeping note: pinging individual staff members who haven’t previously engaged with a topic is technically against our Community Guidelines. Given the nature of the issue though, I understand why you wanted to get eyes on it, so no worries.

To investigate, could you share:

  • Two affected order GIDs—ideally one from before the behaviour changed and one after—along with the shop domain and API version.
  • Whether each order was placed directly through the Shop app/Shop Website, rather than through the Online Store using Shop Pay, plus its destination country/state.
  • The order’s “Filed by channel” value from the tax report and the response from this query:
query ShopOrderTaxLiability($id: ID!) {
  order(id: $id) {
    name
    channelInformation {
      displayName
      channelDefinition {
        channelName
        subChannelName
        isMarketplace
      }
    }
    taxLines {
      title
      channelLiable
      priceSet {
        shopMoney {
          amount
          currencyCode
        }
      }
    }
  }
}

Please remove any customer PII before posting. If you’d rather share these details privately, just let me know and I can set up a DM.

Once I have those examples, I can compare the channel classification with the per-tax-line remittance status and dig into what changed. Hope to hear from you soon!

4

Hi @Alan_G thank you for the speedy response, please can you setup a DM so i can send over the necessary the information.