Everything You Need to Know About Sales Tax for Dropshipping

Hi, I’m currently selling in etsy from PA. I am selling clothes right now and also want to add jewelry soon. I have my own inventory at home, i do not have office or employee nor i delivered my own orders. I use usps for delivery. Does that mean i have nexus?
i am doing business as sole proprietor, Do i need to register my business, I have registered for DBA but i am not sure if i need to register my online business as well, and also will i need sales tax permit as well? I am trying to open my own website using Shopify.
Any information on this will be appropriate.

Hi, This is the best-explaining video I have watched so far about the sales tax. Thank you so much for sharing. As a Pennsylvania resident starting a dropshipping business with CJDropshipping or Aliexpress, supplier will be from China. do I need to charge Pennsylvania sales tax from the very first sale? If so, do I need a reseller certificate before collecting, and should I wait for the nexus threshold in other states before collecting sales tax there? Just want to be tax-compliant from the get-go, so any guidance would be amazing!

A quick question here: if I carry no inventory as a dropshipper, where to include the cost of the material in schedule c form?

Thank you. This was extremely helpful!

Thank you

Thanks for the video. I am about to open a Shopify store that drop ships items from Printify. I'm assuming Printify has economic nexus in all states. So, when filling out a MTC or SST form do I fill in information for each state? Also, concerning the 10 states that do not accept either form, I have to register to get a retail certificate? Thanks you!

What if I am the seller and the drop shipper.

"Do I, as an Indian dropshipper selling products through my website with suppliers from AliExpress, need to pay sales tax in the United States, considering I don't have a physical presence or employees in the U.S.

What about all 3 (drop shipper, sellers and customer) are in GA? Do they have to collect sales tax?

Hi LedgerGurus, thank you for your video, it is very clear but i still have a question. I run an online store in CA (where i live), my business is registered in WY. Let's say I make enough sells in NY to cross the economic threshold in November 2023, but it doesn't make sense to start charging sales tax in November 2023 while the sells to NY from Jan - Oct 2023 don't get charged any sales tax. I should be charging sales tax for all transactions right? if i do, what do i do with the sales tax that was collected from Jan - Oct 2023? Also, in this case, do i count as "physical presence" in CA if i work at home and have no inventory and my company is registered in WY? Thank you for your time in both answering questions and making great videos.

Hi, can i ask you please , if im UK company (so i dont have nexus in USA) and make dropshiping from Suppliers like CJ Dropshiping. should i charge the costumers and collect any taxes or should i pay any taxes when i preorder a stock in CJ Dropshipings from warehouse in china and place it in CJ warehouse in usa and than sell to USA costumers ? and another question please if i make dropshiping from china supplier direct to usa costumers , are there any sales taxes or kind of taxes to pay ? thank you very much and i will be more than happy for your Answer.

@masoudpainda3294
18 minutes ago
I am doing dropshipping and I live in California. I have Shopify store and I connected with CJdropshipping in which I receive orders then it ships from Chaina directly to the customer.
My question is do I have to collect sales tax or Shopify will do it or I am not responsible for sales tax?
It will be your kindness to give answer to my question.
Thank you!

Hi thank you for the video, I don't live in USA im planning to start dropshipping and supplier is in US and selling to US customers. Will I be liable too for sales tax threshold if yes what procedure I need to do.

Thank you

This is a great explanation!! Thank you!! 🤩🤩

Does it apply to llc single-member foreign owned?

Very informative! Thanks a lot

Thank-you very much for sharing this info! Great video, extremely informative!

I do still have a few questions...
I have a brand new Canadian Corp and my EIN/FEIN from the IRS (and that's it so far). So no physical or economic nexus yet. My questions are around the Resale Certificate.

1. Do I need to register for a Sales Tax License in at least 1 State (such as Wyoming) in order to use the SST/MTC forms?
2. What if the supplier is in California or one of the other more difficult states? Then what do I do? Then do I need to register for a Sales Tax License in that state in order to get a resale certificate?
3. If I do need to register for a Sales Tax License in a particular state such as California, am I then obligated to start collecting sales tax from CA customers right away or not until passing economic nexus?

Thank you so much for all your videos on taxes. They are very thorough, and you do a great job explaining all the different scenarios.

So to be clear. Even if im only an online business (im starting shopfiy with printful), i still have physical presence (my home in CA) and would need to register to collect sales tax in my home state? Regardless of sales? Im not selling from my home.

Also. Can i give printful a resale certificate if im not allowed to charge sales tax yet?

Thank you so much for this video, it has cleared up so many things.

The most useful video I've watched on taxes thanks alot.. i am a beginner. And i am based in Pakistan my dropshipper will be AliExpress In china and i want to sell in USA, So what is the solution for my scenario?

I am a new drop shipper in USA and selling global form a supplier in China. I am struggling to comprehend my responsibilities. I dont intend to make an incredible amount of revenue as it is my first time. do i need to charge taxes on my shopify- i am not even sure the right way to articulate the question, thanks in advance! love your content!

While I agree you can use the MTC form - some states will NOT accept it if you are not registered in their state...PA for example. Will only accept it if its a PA number! Otherwise you have to fill out a PA resale cert! I was under the impression that you can use the MTC for states outside your nexus scope. Have you experienced any of this? Less the 10 states that will only take their own**

Hi there! First of all, thank you for such an informative video! My business is from Latinamerica and I am from here and residing here, however I am selling products and shipping them to the USA through Printful (print-on-demand model), according to what you mentioned in the video, would I only be responsible for paying the dropshipper (Printful) taxes?

Hello there! If selling online shopify only will via drop shipping fulfillment...i would only register in home state.( physical nexus) im i collecting and remitting sales taxes from customer even if i dont have economic nexus yet? Thank you.

I just started dropshipping a month ago at the age of 16 and sales tax has me confused, this does help some thankyou

Hello, if person starts online selling and only via shopify & only utilizes dropshipping. What is there category? Meaning i would not be a marketplace facilitator, but what would be my category? Thank you.

im not a official business, LLC isnt registered. i run a ecommerce business and i live in texas. i utilize products from dropshippers who dropship products from china (i dont have inventory), and sell it internationally. do i only take tax on texas?

I am just starting an online store (Etsy) and will be using a print on demand company for my merchandise (they will be printing and shipping the products to the customers). I am residing in CA currently (will be moving to TN in a few months). Do I need a resale certificate or can I sell without? If I sell without, can I offset my pricing for products to include the sales tax that the POD company charged me? and if I am understanding this correctly, I would only charge sales tax to any customers from CA (while I am still residing in CA, and then once I move to TN I would only charge sales tax to the TN customers)?

Hi
Last year started a busines in marylandand started dropshipping and made some sales. But i did not sell anyhting here in usa , all my sales were in canada and mexico. In this case do i nees pay sales taxes to state?

Amazing explanation!!! Thanks !! 🤗🤗🤗🤗

Hey, great video really! I'd be so so grateful if you could answer my 2 questions too, which adds to my understanding of what youve talked about in your video:
1. My dropshipping supplier which is Supliful, they do not charge me sales tax when i order from them. This should mean they would ask for a resale exemption certificate, but the dont do that either. So this just isnt my responsibility i guess?
2. Do i have a physical nexus, where my dropshipper supplier operates? I dont, right? Since im from abroad (germany), i wouldnt have to register in any state therefore, as long as i dont have economic nexus.
Thank you so much for your videos, really appreciate you!

This has to be one of the best explanations about not only sales tax but physical and economic nexus! OMG thank you so much!

is a resale certificate and a texas sales use and tax the same thing?

Great video! I’m about to start my online store using printify. So if I understood, I don’t have to charge sales tax until I reach the threshold amount. Can I still have the reseller form so I don’t get charged sales tax from printify?

Great vid, quick question: Canadian company, suppliers in US, customers in US. I do have an EIN. Do I need to provide the SST/MTC forms to my suppliers, or the Canadian Resale Exemption form instead?

I am very grateful

Superb, very informative video, your way of teaching is amazing. Can you make a video for a texas amazon seller that how to file quarterly sale tax reports and do we need an Amazon report to send to the comptroller or not? Please explain in your video. Thank you <3

please do more on Nexus and industry types. subscribed

If the supplier was based out of Arizona, wouldn't the seller have Physical Nexus in Arizona too because that is where the product is being stored?

Did you explain what "nexus" was, or did I miss it?

Hi, please verify if I need to register with my state Michigan for anything. Im understanding the exemptions. Thank you. Great Job

Hello. Thank you very much for the information. Does this explanation also apply to an LLC?

This was a very informative video that helped me understand sales tax relationships between dropshippers, retailers, and customers. Thanks so much!

Hi. If you register a business a a particular state using a registered Agent service, does this mean you have physical nexus there?

My dropshipper is in CA, has nexus in CA, and I am not. Will they need a different form than the MTC or SST because they are one of the 10 states that have different requirements?

HI LedgerGuru. This is very informative. Thank you. one question, I am a seller registered in Canada and have no physical presence in the USA but my dropshipper is in USA and I sell to USA customers only. do I need to charge sales tax for very first transaction? or does these Nexus apply to me as well?

Hey, my business is located in the EU and my dropshipper is in China. How does this work, if I want to ship products to USA? And how does it work if the dopshipper ships products to the EU? And if i provide the dropshipper with a resell certificat what does this mean?

My Dropshipper is in Illinois. All I had to do was provide my CA resale certificate. Is this not correct?

Hello, I'm starting my ecommerce print on demand business (drop shipping) and I've only registered for sales taxes only in Florida since that's where I live. I've made no online sales yet. Do I need to register for every state to obtain a resales certificate before I launch my website? I'm worried that if I make a sale online and I don't charge tax, later down the line when I do hit the economic threshold for that state I will owe money.

If I don't need to worry about that now, when should I worry about it?