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Etsy clarifies its Sales Tax obligations in the USA

By Dan Wilson July 27, 2018 - 8:21 am

Information for merchants about the new Etsy sales tax approach, and what Etsy sellers need to know and do to comply with the confusing rules, has been released.

All across the world, in different geographies, the issues surrounding local sales tax and how they are collected and applied to online sales has come to the fore in 2018. In Australia, for instance, the introduction of GST (goods and services tax) has had significant ramifications for how eBay and Amazon have evolved how they do business Down Under.

In the USA, the situation is rather more complex and relates to a court case that has going to the very top and has been heard by the Supreme Court. The case is known as: South Dakota vs. Wayfair. The key reason why it’s all got rather nightmarish there is that the rules differ on a state by state basis and it’s possible that Congress could legislate shortly to overturn, clarify or increase the scope of the ruling.

Etsy has made a statement to merchants t help them understand what they’re doing under the circumstances and what sellers can do to help. The full report can be found here. And part of it says:

We are currently calculating, collecting, and remitting state sales tax on all orders shipped to addresses in Pennsylvania and Washington state. In response to new laws passed in these states, we started collecting and remitting state sales tax on orders shipped to Washington state on 1 January 2018 and for orders shipped to Pennsylvania on 1 April 2018.

We’ll also start collecting and remitting state sales tax on orders shipped to Oklahoma on 1st August 2018. We expect more states will attempt to pass similar laws or regulatory changes in the future.
– Etsy

In the post they have made announcements on the site explaining the new arrangements and what they will be doing, but thus time they also seek help from Etsy marketplaces in a plea headed: How you can join our advocacy efforts? It’s available on the link above.

They note that the “patchwork approach to state sales tax can be frustrating for buyers, sellers, and even for the states and they want to see reform. Specifically, they say harmonisation and simplicity are vital and they will continue to advocate for a federal solution that makes sales tax for online purchases much clearer. They offer you details of how you can join the campaign here.

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