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Sales Tax Boot Camp
For Etsy Sellers
Today‟s Topics
• “General Rules” of sales tax
• It‟s all about nexus!
• How much sales tax to collect

• Filing sales tax ...
General Rules
“General Rules” of Sales Tax
• Sell to someone in your state = collect sales
tax
• No minimum required

• Sell to someone ...
“General Rules” of Sales Tax
• How much you collect depends on a lot!

• Filing deadlines usually tied to sales volume
• S...
“General Rules” of Sales Tax
• Most selling platforms help you collect sales
tax
• No selling platform helps you file or p...
Understanding Nexus:
When to Collect
Nexus: When to Comply
• Your business has a presence in a state
significant enough that you‟re required to
comply with sta...
Nexus: When to Collect
• Nexus for one platform means nexus for
your entire business
• Ex – „Etsy nexus‟ gives your own we...
Common Nexus Types
Home or Office

Inventory

• Where you live and/or
operate your business

• Inventory is in a 3rd
party...
Collecting Sales Tax
Example
• Example: Jenny Etsy is based in Akron,
OH
• She runs her business from her home

• She‟s complying in 1 state: O...
Home State Sale
ARKON

CLEVELAND

Collect Sales Tax
Nexus to non-Nexus
OHIO

FLORIDA

Don‟t Collect Sales
Tax
Calculating Sales Tax
How Much Do I Collect?
• Tax rate usually = state + local + special
• Origin-based state
• Tax rate = seller‟s location
• ...
Origin: Sale in Ohio
AKRON

SHAKER HEIGHTS

Rate collected: 6.75%
• State: 5.75%
• Summit County: 1.00%
Destination: Sale in New York
STAMFORD

BUFFALO

Rate collected: 8.75%
• State: 4.00%
• Erie County: 4.75%
Collecting on Etsy
Good News!
• You can collect sales tax through Etsy
• You can set taxability of shipping per state
Bad News!
Bad News!
• It‟s up to YOU to correctly determine rates
for collection
• Can only collect flat rate per state or zip
code
...
Recommended Steps
• Go to Your Shop > Payment > Sales Tax
• Choose a state or a zip code
• Enter the highest possible tax ...
Filing Sales Tax Returns
Filing Returns
• Combine and file a single return per state
• Not separate returns per channel

• Filing on time can equal...
Filing in Destination
• Huge pain!
• Calculate taxable sales and sales tax
collected by jurisdiction

• Gets worse if you‟...
WA eFile
Last Thing…

Trying to comply >
knowingly not complying
TaxJar: Here to Help
• Automatically pulls and organizes sales
and tax data from your Etsy account
• Creates daily sales t...
Dashboard
Actual vs Estimated
Actual vs Estimated
• Not sure if you‟ve set up your sales tax
collection correctly
• Want to check liability in other sta...
TaxJar: Here to Help
• TaxJar.com
• 30-day free trial (no credit card required)
• Monthly or annual subscriptions
• Pricin...
TaxJar: Special Offer
Get an extra 1 month for FREE

1. Signup for TaxJar and email
mark@taxjar.com
• Extra 15 days FREE

...
Resources
SalesTaxCommunity.com
Talk with other FBA sellers!

blog.taxjar.com
Weekly posts on sales tax
and compliance
Let‟s Talk!
Email me: mark@taxjar.com
Twitter: @taxjar
Q&A
Sales Tax Boot Camp for Etsy
Sales Tax Boot Camp for Etsy
Sales Tax Boot Camp for Etsy
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Sales Tax Boot Camp for Etsy

Learn the basics of sales tax collection and remittance for Etsy sellers from industry expert Mark Faggiano of TaxJar. This webinar will take the mystery out of a complex topic with serious financial implications for your Etsy business.

Mark will cover when Etsy sellers must collect sales tax, how to determine how much sales tax to collect, and what changes if the current federal sales tax legislation passes.

After "Sales Tax Bootcamp," you will be armed with the tools and resources to take charge of this complicated part of your Etsy business.

Presenter
Mark Faggiano, industry expert and Founder / CEO of TaxJar – a service built to make post-transaction sales tax compliance easier for multi-channel ecommerce sellers. Mark previously co-founded and led FileLater to become the web’s leading tax extension service for both businesses and individual taxpayers.

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Sales Tax Boot Camp for Etsy

  1. 1. Sales Tax Boot Camp For Etsy Sellers
  2. 2. Today‟s Topics • “General Rules” of sales tax • It‟s all about nexus! • How much sales tax to collect • Filing sales tax returns • Here to help and resources • Q&A
  3. 3. General Rules
  4. 4. “General Rules” of Sales Tax • Sell to someone in your state = collect sales tax • No minimum required • Sell to someone out-of-state = don‟t collect….yet • 45 states + 45 sets of laws = too many rules! • Sellers are „collection agents‟
  5. 5. “General Rules” of Sales Tax • How much you collect depends on a lot! • Filing deadlines usually tied to sales volume • Some states have discounts for early payment • All states have penalties for late payment • Save everything in case of audit
  6. 6. “General Rules” of Sales Tax • Most selling platforms help you collect sales tax • No selling platform helps you file or pay • Once you collect, you‟re on your own!
  7. 7. Understanding Nexus: When to Collect
  8. 8. Nexus: When to Comply • Your business has a presence in a state significant enough that you‟re required to comply with state sales tax law • Register your business • Collect sales tax on orders shipped to that state • Pay what‟s been collected
  9. 9. Nexus: When to Collect • Nexus for one platform means nexus for your entire business • Ex – „Etsy nexus‟ gives your own website nexus • No nexus in a state means you don‟t have to collect
  10. 10. Common Nexus Types Home or Office Inventory • Where you live and/or operate your business • Inventory is in a 3rd party warehouse • Live in San Jose and sell out of your house • Live in San Jose with inventory in PA • Comply/collect in CA • Comply/collect in CA & PA Dropshipping doesn’t apply to either scenario
  11. 11. Collecting Sales Tax
  12. 12. Example • Example: Jenny Etsy is based in Akron, OH • She runs her business from her home • She‟s complying in 1 state: OH
  13. 13. Home State Sale ARKON CLEVELAND Collect Sales Tax
  14. 14. Nexus to non-Nexus OHIO FLORIDA Don‟t Collect Sales Tax
  15. 15. Calculating Sales Tax
  16. 16. How Much Do I Collect? • Tax rate usually = state + local + special • Origin-based state • Tax rate = seller‟s location • One rate for entire state • Destination-based state • Tax rate = where item is shipped • Variable rate • California
  17. 17. Origin: Sale in Ohio AKRON SHAKER HEIGHTS Rate collected: 6.75% • State: 5.75% • Summit County: 1.00%
  18. 18. Destination: Sale in New York STAMFORD BUFFALO Rate collected: 8.75% • State: 4.00% • Erie County: 4.75%
  19. 19. Collecting on Etsy
  20. 20. Good News! • You can collect sales tax through Etsy • You can set taxability of shipping per state
  21. 21. Bad News!
  22. 22. Bad News! • It‟s up to YOU to correctly determine rates for collection • Can only collect flat rate per state or zip code • No real-time calculation • Etsy will NOT tell sellers how much or where they should collect
  23. 23. Recommended Steps • Go to Your Shop > Payment > Sales Tax • Choose a state or a zip code • Enter the highest possible tax rate • taxjar.com/sales-tax-calculator/ • Only applies to new items • Double check old items are set to be taxable
  24. 24. Filing Sales Tax Returns
  25. 25. Filing Returns • Combine and file a single return per state • Not separate returns per channel • Filing on time can equal a discount • blog.taxjar.com/state-sales-tax-discounts/ • File zero returns!
  26. 26. Filing in Destination • Huge pain! • Calculate taxable sales and sales tax collected by jurisdiction • Gets worse if you‟re multi-channel
  27. 27. WA eFile
  28. 28. Last Thing… Trying to comply > knowingly not complying
  29. 29. TaxJar: Here to Help • Automatically pulls and organizes sales and tax data from your Etsy account • Creates daily sales tax reports subtotaled by local jurisdiction (county, city, etc) • Estimates what you SHOULD have collected • Pro channel for accountants
  30. 30. Dashboard
  31. 31. Actual vs Estimated
  32. 32. Actual vs Estimated • Not sure if you‟ve set up your sales tax collection correctly • Want to check liability in other states • You‟ve collected sales tax on only some of your orders
  33. 33. TaxJar: Here to Help • TaxJar.com • 30-day free trial (no credit card required) • Monthly or annual subscriptions • Pricing based on transaction volume • Starts at $9.95/month for 1k transactions
  34. 34. TaxJar: Special Offer Get an extra 1 month for FREE 1. Signup for TaxJar and email mark@taxjar.com • Extra 15 days FREE 2. Two Options for another 15 days FREE • TWEET: I just signed up for @TaxJar • Like TaxJar on Facebook
  35. 35. Resources SalesTaxCommunity.com Talk with other FBA sellers! blog.taxjar.com Weekly posts on sales tax and compliance
  36. 36. Let‟s Talk! Email me: mark@taxjar.com Twitter: @taxjar
  37. 37. Q&A

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