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.

1. Sales Tax Boot Camp
For Etsy Sellers

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. General Rules

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. “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. “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. Understanding Nexus:
When to Collect

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. 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. 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. Collecting Sales Tax

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. Home State Sale
ARKON
CLEVELAND
Collect Sales Tax

14. Nexus to non-Nexus
OHIO
FLORIDA
Don‟t Collect Sales
Tax

15. Calculating Sales Tax

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. Origin: Sale in Ohio
AKRON
SHAKER HEIGHTS
Rate collected: 6.75%
• State: 5.75%
• Summit County: 1.00%

18. Destination: Sale in New York
STAMFORD
BUFFALO
Rate collected: 8.75%
• State: 4.00%
• Erie County: 4.75%

19. Collecting on Etsy

20. Good News!
• You can collect sales tax through Etsy
• You can set taxability of shipping per state

22. Bad News!

23. 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

24. 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

25. Filing Sales Tax Returns

26. 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!

27. Filing in Destination
• Huge pain!
• Calculate taxable sales and sales tax
collected by jurisdiction
• Gets worse if you‟re multi-channel

28. WA eFile

30. Last Thing…
Trying to comply >
knowingly not complying

32. 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

33. Dashboard

34. Actual vs Estimated

35. 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

36. 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

37. 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

38. Resources
SalesTaxCommunity.com
Talk with other FBA sellers!
blog.taxjar.com
Weekly posts on sales tax
and compliance

39. Let‟s Talk!
Email me: mark@taxjar.com
Twitter: @taxjar

40. Q&A