Does Etsy collect sales tax? What about Amazon Marketplace or eBay?

If you sell through multiple marketplaces, the marketplace typically collects sales tax on your behalf, provided the item is taxable and is sold to someone in one of the states where the marketplace must collect tax.

While marketplaces will handle sales tax collection and remittance for you, it’s still up to you to comply with all applicable regulations, especially if you sell in multiple places online.

How Sales Tax Applies to Marketplace Sellers

Things can get complicated when you sell through multiple channels. If you’re a multichannel seller, you must collect sales tax in every state where you have nexus, meaning you meet certain sales thresholds.

Many states have rules that require the marketplace facilitator, aka Etsy, Amazon, and so on, to collect sales tax when the marketplace facilitator meets a certain sales threshold (which varies by state).

So, provided you’re working with a marketplace facilitator with nexus in a particular state, it’ll collect sales tax for you.

But, you should still be on alert, as you can have nexus in a particular state, even if the marketplace doesn’t. This is particularly true if you’re a multi-channel seller and you also sell through your own website.

Is your head spinning yet? Let’s take a closer look at how sales tax works on some of the most popular marketplaces.

Does Etsy Collect Sales Tax?

Yes, Etsy does collect sales tax in many (but not all) states. Etsy will automatically collect the tax on sales to people in the U.S., no matter where the seller is located, and when the order meets certain criteria. The marketplace facilitator also remits sales tax on your behalf.

There may be cases when Etsy doesn’t collect sales tax for you, but you still have an obligation to pay it. You can use Etsy’s sales tax tool to add the tax to applicable orders in that situation. Another option is to work the sales tax into the price of the items you sell.

Does Amazon Collect Sales Tax?

Like Etsy, Amazon collects sales tax on marketplace sales in certain states. Amazon will remit sales tax on behalf of the seller.

Also like Etsy, a seller may have additional sales tax obligations and must ensure that they comply with applicable regulations.

Does eBay Collect Sales Tax?

eBay collects and remits sales tax on orders in 46 jurisdictions. Like Amazon and Etsy, if you sell on eBay, you’re responsible for complying with any applicable sales tax laws.

Does Bonanza Collect Sales Tax?

Bonanza also collects and remits sales tax on orders made by buyers in certain states. The marketplace facilitator works with TaxCloud to calculate, collect and remit the appropriate sales tax amount.

How Do You Know Your Sales Tax Obligations?

At this point, you may be scratching your head, stressing about ensuring you’re following all the sales tax rules and requirements. No one wants a hefty tax bill or a large fine.

Forget about manually tracking each of the marketplaces you sell on. Instead, integrate TaxCloud sales tax software into your marketplaces so you can rest easy that the right sales tax gets calculated, collected, and remitted to the right states.

We make multi-channel sales tax easy. Talk to us today to learn more.