Etsy Sales Tax and Fees
To set up sales tax on Etsy, go to Finances and select Payment Settings. You can set tax rates for states and zip codes if your state has local sales tax. Whether you charge origin or destination sales tax depends on your state. Etsy collects sales tax based on the buyer’s state when required by law.
Etsy Sales Tax Collection
Etsy automatically calculates, collects, and remits sales tax on behalf of sellers when an order ships to the US or a digital order is purchased by a US buyer. Etsy is a registered sales tax vendor in 46 states and 2 territories. Etsy Payments fees and refunds are not deducted from sales taxes.
State Sales Tax Exemptions and Requirements
Etsy does not collect sales tax in Alaska, Delaware, Montana, New Hampshire, and Oregon. Some states charge additional sales tax on gift wrapping and shipping costs. If your state has income tax, you’ll need to pay state income taxes on your Etsy sales net income.