What is Sales tax and how it affects you? - Printful 2020

💸 Tax is a complex subject, how can business owners know their obligations? 💸

Watch our new video, where we outline the basics of taxes with Printful. We recommend you talk to a tax specialist or CPA for professional tax advice.

Mentioned links:
📍List of states that we are liable to collect sales tax: http://bit.ly/2tFgpiN
📍Intro to Sales Tax for Online Sellers article: http://bit.ly/2tF5aqz
📍Applying for a sales tax permit: http://bit.ly/2GPwmLJ

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Transcript

First of all, Printful is liable to collect tax on most orders going to the USA.

You can take a look at our FAQs to see the full list of states that we are liable to collect sales tax in. You’ll find a link in the description below.

Secondly, you might be liable to collect sales tax.

Note that we're not tax specialists, so this isn't professional legal advice. We strongly recommend you consult a tax specialist or CPA to get advice for your specific situation.
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That said, how do you know when and where to collect tax?

You should look into collecting sales tax in states where you have nexus.

Nexus is the term used when a retailer has a presence in a particular state.

There are many ways you might have nexus, as outlined in TaxJar's article, “Intro to Sales Tax for Online Sellers”. We’ll leave a link in the description.
Some common examples are:

If you have a physical location in a state (even if it's your kitchen bench).

States you have employees or salespeople in.

States you store inventory in, such as if you are using Printful Warehousing and Fulfillment Services, and

States where you make enough sales, in dollars or transactions.

For example - If your company's headquarters are located in California, you have employees working remotely in Oregon, and your warehouse is in Texas, you have nexus in all three of those states.

There are other ways you might have nexus, such as through affiliates. You can find more information in the previously mentioned TaxJar article “Intro to Sales Tax for Online Sellers”.

Now, If you are liable to collect sales tax in a state, there are two things you should look into. Sales Tax Permits and Retail Certificates.

First off, you have to obtain a Sales Tax Permit before you start collecting sales tax. The process of applying for a sales tax permit is different for every state, so you can learn how to register for a sales tax permit in every state here. We’ll leave a link to this page in the description below.

Once you have a Sales Tax Permit, you should look into getting a Resale Certificate. It lets you buy products without paying sales tax if you plan to resell them, such as with Printful products.

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