Have Trouble with Destination-basedSales Tax on Etsy?We do too.

GoToGreatPanes' Etsy shop

Go To Great Panes, Kathryn Maloney ©2010
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.

Etsy has updated their new sales tax feature so that it is at least as suitable for sellers as Paypal’s sales tax was which is great, but for some of us it’s still not usable.

If you live in a state that has sales tax based on the buyer’s address (destination-based) and the rate is determined by political boundaries–like counties or cities–and not on 5 digit zip codes, you may still be stuck.

Several states are set up this way including New York, Florida, South Carolina, Washington and others, and in these states some 5 digit zip codes cross county or city lines, meaning that two ship-to addresses in the same 5 digit zip code should be charged different sales tax rates.

Neither Etsy nor Paypal is set up to accommodate this issue so in-state buyers must be billed manually by sellers registered in most of these states if you want your tax collected accurately and need the receipt to show the actual tax due & collected.

Washington sellers are lucky–their state allows them a little lee-way when collecting sales tax through sites that aren’t set up to deal with the full 9 digit zip codes (see here for info) a few states have similar breaks for sellers, but many of us aren’t so lucky.

If you are in the same position as we are and are wondering what to do, here’s the only way I can find to make collecting tax accurately work:

  1. Offer “other” as a payment option in your Etsy shop,
  2. ask in-state buyers to select “other” as the method of payment in your listings & shop policies, then
  3. send them an email invoice with the sales tax rate for their ship-to address: Sending a Paypal Invoice

Go To Great Panes, Kathryn Maloney ©2010
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.

Looking for a discount at JoAnn's Fabric & Craft Stores?

Bats from GoTo's Etsy shop

Go To Great Panes, Kathryn Maloney ©2010
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.

A little plus for USA sellers who have registered their businesses–amid the updates of our Sales Tax & Business Registration–Official State Website Links page…:

If you shop at Jo Ann Fabric and Craft stores, and you’ve registered for a state sales tax id number or otherwise registered your business with your state, you are eligible for a VIP discount card that entitles you to 10% off your purchases, in addition to purchasing many supplies exempt from sales tax in most states (so long as the supplies are for use in your business).

See all the details here on their website:

Jo-Ann VIP Discount Card

You are also eligible if you are part of a Sewing/Crafting Organization, an NPO or can prove you are an interior design professional.

Hope that helps increase your profits!

Go To Great Panes, Kathryn Maloney ©2010
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.

New states added & links updated: Sales Tax & Business Registration

The Sales Tax & Business Registration link page is up to 22 states now, & new links have been posted for some of the states that were already there:

Alabama Arizona
California Colorado
Connecticut Florida
Illinois Kentucky
Louisiana Massachusetts
Michigan Minnesota
New Jersey New Mexico
New York North Carolina
Pennsylvania South Carolina
Tennessee Texas
Washington Wisconsin


If a state isn’t there and you’d like to see links please leave a comment with the state and I’ll add it to the top of my list!