Clarification Needed Regarding Seller Permit / Sales Tax Permit for Etsy Sales

[DashelaThreads]

Hello! I'm planning on selling my products on Etsy soon, and I have a question regarding seller permit, also known as sales tax permit. As far as I understand, Etsy handles sales tax collection and remittance for most states in the US. However, it seems that sellers still require a seller permit for the state they reside in. I'm based in TX, so I understand the necessity of obtaining a seller permit there. Yet, I'm unsure whether I also need seller permit for other states. Could anyone please clarify? Thank you. 

[JMOldeVintage]

@DashelaThreads  - I believe that all States with a sales tax now have marketplace facilitator laws. Basically this places the the onus of charging & remitting the sales tax to States on Etsy.

So for your sales on Etsy you will not need to worry about collecting sales taxes. Etsy does this & reports under their sales & use tax number for each State.

Texas does have some sort of requirement for businesses regarding some sort of "licensing" - I would go to Texas' website on sales & use taxes to see if you can find any details on what is required. Or hopefully another shop owner in Texas will reply here to your question.

As for registering in other States, google "state sales tax threshold" or "by state sales tax nexus". Usually this is only a concern if you have your own "personal" business website. Then each State has their own requirements regarding registering & collecting sales taxes. Often the total $$ sales amount is quite high &/or the number of sales is on the higher side too. 

[DashelaThreads]

Thank you @JMOldeVintage for your reply. I don't have my "personal" business website and will only be selling on Etsy platform for now. I searched for the state sales tax threshold, and like you said the dollar value is quite high (seems like the lowest is 100k). I don't think I will be reaching that threshold, so I guess all I need to do is obtain a Seller Permit in Texas. 

[BagmakerSupply]

@DashelaThreads: The laws vary by state but in general terms Etsy collects the sales tax for most states. While Etsy collects and remits the tax for Texas buyers, you probably still need file a Texas return but the Etsy Marketplace sales are a deduction on that return so you are only liable for the sales tax on non Marketplace sales. As to other states, it depends on the state what the minimums are (for a return to be filed) and whether or not marketplace sales are included in calculations. You may want to talk to a qualified tax advisor about your specific situation.

[Jewelry18official]

Etsy doesn’t request my tax ID just my business info.

but I just joined and I don’t want to get banned.

so I’m confused as well.

[ModAngie · Accepted solution]

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