Must know sales tax tips for drop shippers: Printful 2019

Today we'll be answering a few questions about sales tax, including what it is, why it's collected, and when and how to collect it. Wes and Jennifer from TaxJar will also go over some common questions about drop shipping sales tax and sales tax with Printful.

Visit TaxJar’s Sales tax with Printful & dropshipping page: http://bit.ly/2ShuBK4

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Video topics and mentioned links:

0:52 What is tax and why is it important?

1:45 When to collect sales tax?

Economic Nexus Blog - http://bit.ly/2O2lONG

3:47 Marketplace facilitator laws

Marketplace Facilitator Laws Explained - http://bit.ly/2Sm8fal

4:34 How to collect and remit

Sales & Transactions calculator - http://bit.ly/2XOlG99
International sellers blog - http://bit.ly/2LVElZl
Non-taxable products - http://bit.ly/30BhDtK
How to register for a permit - http://bit.ly/2GPwmLJ
Sales Tax Accountant Directory - http://bit.ly/30vfUGe
Adding a resales certificate - http://bit.ly/2XRKE2n
State Sales Tax Map - http://bit.ly/2XOo13V

8:11 Drop shipping + Sales tax

9:26 Recap

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About this video

Tax is a percentage of the sales price of a taxable product, put in place by the government. The government uses this money to pay for public services, like schools and roads.

Sales tax is governed at the state level, which means each state gets to make its own laws. This means that each state collects sales tax a little differently.

Sales tax is a “consumption tax,” which means it's only charged when the end consumer buys goods or services. It's also known as a “pass-through tax,” because even though a business charges sales tax, they don’t keep it. Businesses are required to collect it and remit it - or pass it through - to the relevant government.

This means that we at Printful are required to collect and remit sales tax on purchases our customers make based on their retail price.

So, that leads to the obvious next question, how do you know when to collect sales tax? You need to collect sales tax from sales in states where you have “sales tax nexus.”

Sales tax nexus is having a physical presence in or a meaningful connection to a state that requires you to comply with their sales tax laws. This means that you would need to collect and remit sales tax when someone from that state makes a purchase.

These are a few common factors that create sales tax nexus:

*If you have a physical location

*If you have employees or salespeople

*States you store inventory in

*If you make enough sales in a state, in dollars or transactions

This is also referred to as economic nexus and has caused some confusion for a lot of online sellers.

To help we have a simple table, to sum up the most common tax situations you will fall into when working with Printful.

When Printful has nexus and you have nexus:
Printful charges you tax unless you submit a resale certificate
You charge your customer tax

When Printful has no nexus and you have nexus:
Printful doesn't charge you tax
You charge your customer tax

When Printful has nexus and you have no nexus:
Printful charges you tax unless you submit a resale certificate
You don't charge your customer tax

When Printful has no nexus and you have no nexus:
Printful doesn't charge you tax
You don't charge your customer tax

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#Printful #PrintOnDemand #SalesTax