Question
If you are selling products on your Pro store, you may be required to pay sales tax. How are sales taxes calculated when using print-on-demand services from Printify? What is the sales tax rate that organizations pay? How can you show that your organization is tax-exempt?
Answer
Sales tax rates are different in each state, and within each state, they may also vary by county, city, and district. Printify applies sales tax rates to your constituents' orders, based on their shipping zip code.
The general formula for calculating sales tax is:
((Printify Price + Printify Shipping) * Tax Rate) = Sales Tax
Some states don't include shipping in their sales tax calculation.
To learn more about Printify sales taxes visit their knowledge base article.
The best thing you can do for your organization is to consult a tax advisor to determine if your nonprofit is required to pay sales tax on items sold. Experts can help guide you through this process and take care of the tedious items for you. We are not experts and provide this information for reference only.
How Will Printify Charge Sales Tax, and How Will It Be Calculated?
- Based on your customer’s destination (ZIP code) – Printify uses your customer’s shipping address to calculate sales taxes. Please note that Printify collects sales taxes for the specific states that we are registered for in the USA, including orders for international sellers where the destination is within the USA.
- Based on orders coming in from specific sales channels or API – Printify calculates and collects sales taxes based on resale certificates provided by the merchant.
- For all sample orders – the sales tax is displayed at checkout and collected by Printify. The tax is also based on the resale certificates you, as the seller, have provided.
Printify Sales Tax
If you use Printify, your organization will have to consider three parties: you, the customer, and Printify/the drop shipping company. Why? Because each of you could be in different states and have different tax rules.
What is sales tax nexus?
Nexus is the term used when a retailer has a presence in a particular state. A company’s presence can be difficult to determine in eCommerce, but here are a few common ways that you can have nexus:
- If your company has a physical location (even if it’s your kitchen bench)
- States you have employees or salespeople in
- States you store inventory in
- States where you make enough sales, in dollars or transactions
Sales tax is collected when a customer makes a purchase in a state where you have nexus. For example, If you have nexus in California and a customer from California makes a purchase, that customer gets charged sales tax.
How to handle your drop shipping sales taxes
To sum up, here are the key points all online retailers should remember when it comes to taxes in the US:
- Your sales tax obligations as an online retailer vary from state to state.
- You need a resale certificate when buying from a drop shipper like Printify, otherwise, the dropshipping company will have to collect sales tax.
- Mark down important sales tax dates to file your tax returns on time.
Printify collects sales tax on all taxable products in every state we are registered. Please submit your resale or tax-exemption certificates.