This is general information to help you ask the right questions. It is not tax advice. Rules differ by state, so check your state’s revenue department website or ask a tax professional.
Marketplace facilitator laws
Most US states have marketplace facilitator laws. Under them, a marketplace such as Etsy generally collects and sends sales tax on orders placed through it. Etsy explains how this works on its own help pages about sales tax.
When you may still have sales tax duties
- Sales on your own website or other channels that do not collect tax for you
- Your home state’s rules, which may require a seller’s permit or registration even when a marketplace collects tax
- Economic nexus: states set their own sales or transaction thresholds for out of state sellers
Print providers and resale certificates
Print providers may charge you sales tax on the products they make for you unless you give them a valid resale certificate for the relevant state. Printful and similar services explain their process in their help centres.
Income tax is separate
Shop profit is generally reported on your federal and state income tax returns. Self employment tax may also apply. Keep records of sales, fees and costs all year.
What to track from day one
- Gross sales and shipping charged
- Marketplace and provider fees
- Sales tax collected by the marketplace (shown in your reports)
- Receipts for supplies and software
Selling from Canada? See GST/HST Basics for Canadian Etsy Sellers.
