Tax Obligations and EIN/ITIN Application
The application process can take several weeks, so it’s important to apply well in advance of any tax deadlines. If you plan to sell on Etsy, it’s important to understand your tax obligations and whether you need to register for a tax ID. Applying for an EIN or ITIN is a straightforward process that can help ensure you are compliant with US tax laws.
Sales Tax and Compliance
Etsy will remit the sales tax for all states that they are required to, including Georgia and you don’t have to do anything. Sales tax is based on shipping location. Etsy shop owners should also be aware that sales tax may apply to the goods they sell on the site, including both handmade and vintage items. However, sales tax may vary according to each buyer that purchases items from an Etsy shop, and U.S. sales tax only applies to buyers in the United States.
Licensing and Business Registration
Depending on where you live, what you sell, and who you sell to, you’ll need to sign up for different types of business licenses. Etsy doesn’t require sellers to have a business license to sell on it, but you do need to follow local laws regarding business registration.
Income and Tax Considerations
If you’re not employed or self-employed but you sell on Etsy as a hobby, you generally won’t need to pay tax on your income. Sales tax is based on shipping location. As a self-employed individual, generally you are required to file an annual return and pay estimated tax quarterly.