2021

Please be aware, I am not a lawyer or an accountant. This is not official legal advice. It should not be used as a replacement for a lawyer or an accountant. This is my personal opinion.

NOTE FROM SARAH: Just to clarify my answer to a question from this hangout that a viewer had regarding Printify & sales taxes. Printify has “sales tax nexus” in multiple states in the USA and is thus required to collect & pay sales tax on some orders you make and ship to them (such as New York). This is usually a very small amount. The exception to this, is if you are registered for collecting & paying sales taxes in that state. In that case, they can waive this fee, since you’re collecting it/paying it from your customers already (for example, if you were registered and were collecting & paying sales taxes on orders made in your store to the state of New York, Printify don’t have to collect & pay sales taxes on your New York orders). The person asking the question was wanting to know, if they should register to collect & pay sales tax in all USA states, so they could waive these additional taxes on their orders with Printify.

Unless you live in a state or have a physical presence in a state (legally known as having nexus), the threshold most have to be legally required to collect/pay sales taxes is very high (such as requiring $100,000/year in sales in that state alone). For most online sellers, I personally believe it’s better to not go through the hassle of registering for sales taxes & collecting it/paying it in the very beginning in places when you aren’t legally obligated to, and just absorb the extra charge Printify will sometimes charge you if your customer lives in a state that they have to collect & pay sales tax in. 

The reason for this, is so that you don’t overwhelm yourself with doing too much in the beginning. My opinion is that it’s better to focus on the big wins first (finding a t-shirt design that sells great), rather than burn yourself out by spending your limited time doing something optional (registering to collect & pay sales tax in a state that doesn’t require you to do so yet because you don’t sell $100,000+ year in their state) just to avoid a small extra charge from Printify when you can simply absorb the cost in the beginning.

If you want, you can also slightly increase your product prices (e.g. by $1) to cover this if you don’t want to absorb the cost & lower your profit margin.

It can be difficult for me to give concise, easy-to-understand answers to legal questions like this when I’m just chatting live. I am sorry if my answer is confusing!

TaxJar have a great blog post outlining the sales thresholds you need to meet, to be eligible to pay sales tax in a state you don’t have a physical presence in (nexus): https://www.taxjar.com/sales-tax/economic-nexus