Taxes
NOTE: You retain full responsibility for determining, collecting, and remitting any applicable taxes related to the items you sell.
Personal used items
Depending on your location and the nature of your items—such as handcrafted goods VS casual, peer-to-peer sales of used personal property—you may be subject to state sales tax requirements or federal income reporting.
Tax laws vary significantly regarding casual used goods versus commercial artisan sales, we encourage you to consult a qualified tax professional to ensure compliance with your local, state, and federal obligations.
The Devil is in the Details
A Quick Note for Casual Sellers:
If you're just selling off your own used items, you generally won't have any sales tax consequences to worry about.
For everyone else—if you're planning on running a serious online business or scaling up your sales—I’ve detailed all the compliance and state tax info below. Make sure to review it so you know how things work!
State Online Sales Tax & Compliance Laws for E-Commerce Sellers
Operational Breakdown by Seller Business Model
| Seller Category | Primary Tax Burden | Exemption / Resale Certificate Rules | Key Compliance Actions |
|---|---|---|---|
| Makers & Artisans | Sales Tax on Raw Materials + Final Product | Raw material inputs are exempt via Manufacturing Resale Certificates | Track total revenue across all channels; file local returns even if marketplaces remit |
| Resellers & Wholesalers | Final Consumer Sales (B2C) | Tax-exempt purchasing via Valid Wholesale Resale Certificates | Collect and verify resale certificates for B2B buyers; audit multi-state nexus |
| Casual & Occasional Sellers | Zero-to-Minimal (State Specific) | Isolated / Casual sale exemptions apply below state thresholds | Monitor annual gross income and transaction volume to avoid triggering business status |
Comprehensive Compliance & Economic Nexus* Guide
Navigating state sales tax obligations for e-commerce requires an understanding of three foundational concepts: Physical Nexus, Economic Nexus, and Marketplace Facilitator Laws.
Physical vs. Economic Location
Historically, states could only require remote sellers to collect sales tax if the seller had a physical presence in the state (e.g., offices, inventory, sales reps). Following the landmark 2018 Supreme Court decision in South Dakota v. Wayfair, Inc., states were granted the authority to enforce sales tax collection based entirely on economic activity (Economic Nexus).
Economic nexus thresholds vary by jurisdiction, but most states establish nexus when a seller reaches either:
- Gross Revenue: Typically $100,000 in sales delivered into the state within a calendar year.
- Transaction Count: Typically 200 separate transactions into the state (note: many states have recently removed transaction-count triggers to reduce burden on low-margin sellers).
Marketplace Facilitator Laws
A Marketplace Facilitator is an enterprise that operates a platform where third-party sellers list goods or services, and the platform collects payment directly from the customer (e.g., Amazon, Etsy, eBay, Walmart Marketplace).
Under Marketplace Facilitator laws enacted in nearly all sales-tax-imposing states, the platform operator—rather than the individual merchant—is legally responsible for calculating, collecting, and remitting sales tax on transactions processed through the marketplace. However, direct-to-consumer (DTC) sales made via a seller's independent site (e.g., Shopify, WooCommerce, Custom Site) remain the sole responsibility of the merchant.
Primary State-by-State Reference Guides
For state-by-state thresholds, registration links, and updated statutory rules, consult the following industry reference tools:
1. Makers & Artisans (Handmade & Crafted Goods)
Artisans producing physical products (jewely, woodworking, apparel, custom craft items) operate under dual tax considerations: purchasing raw materials and selling finished goods.
- Raw Materials Sourcing: Makers can purchase raw components without paying upfront sales tax by presenting a Resale Certificate or Manufacturing Exemption Certificate to suppliers, provided those components become part of the finished good offered for sale.
- Omnichannel Tracking: Sales conducted on platforms like Etsy or Amazon Handmade are collected and remitted automatically by the platform. However, sales processed on a personal domain (e.g., Shopify) count toward economic nexus thresholds alongside marketplace revenue in most states.
- Filing Obligations: Even if a marketplace handles tax remittal, many states require registered sellers to file annual or quarterly informational returns reporting gross sales and tax-exempt marketplace sales.
2. Resellers & Wholesalers
Resellers buy finished goods from manufacturers or liquidators to sell directly to consumers (B2C) or other businesses (B2B).
- Resale Certificates: To purchase inventory tax-free, resellers must obtain a sales tax permit in their home state and issue a Uniform Sales & Use Tax Resale Certificate (or state-specific certificate) to distributors.
- B2B Tax Exemptions: When selling wholesale to other retailers, resellers do not collect sales tax, provided they maintain a current, signed resale certificate from the buyer on file.
- Drop-Shipping Tax Complexity: If a reseller utilizes a drop-shipper, the transaction involves three parties. If the reseller lacks a tax permit in the destination state, the drop-shipper may be required to charge sales tax based on the retail or wholesale price, depending on state policy.
3. Casual & Personal Used Item Sellers
Individual sellers offloading personal property, used clothing, or garage sale items intermittently generally operate under distinct guidelines from commercial enterprises.
- Casual / Isolated Sale Exemptions: Most states maintain "casual sale" rules exempting non-regular, non-business sales from sales tax collection requirements.
- Threshold Triggers: If casual selling becomes frequent or sales volume exceeds state-defined economic nexus thresholds (or federal 1099-K reporting limits), state taxing authorities may classify the activity as an ongoing business, removing the casual sale exemption.
- Marketplace Responsibility: Online consignment and second-hand platforms (e.g., Poshmark, Mercari, eBay) manage collection automatically under facilitator statutes regardless of seller classification.