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In the United States, the sales tax can be affected by several factors:

The location your product is shipped from
The location your product is shipped to
Where you're registered to collect tax
Item taxability
Buyer exemptions

The United States does not charge a federal sales tax. Instead, sales tax is calculated according to state, county, and municipality, according to physical or economic nexus.

Physical presence nexus

Physical presence nexus: Having employees, inventory, kiosks, offices, stores, trade show attendance, warehouses, or other physical ties to the state may give you an obligation to collect and remit sales tax in these states.

Merchants can find information about this nexus through State by state physical presence nexus guide.

Economic nexus

Economic nexus: Having a certain amount of sales and/or transactions in the state may give you an obligation to collect and remit sales or use tax in these states.

On June 21, 2018, the Supreme Court of the United States ruled in favor of the state in South Dakota v. Wayfair, Inc. This ruling allows the state to begin taxing remote sales via their economic nexus laws. Since the ruling, more than 40 states enacted economic nexus laws of their own.

Therefore, all PrintBase products when shipped to certain regions of the US (including New York, Pennsylvania, California, Florida, Ohio, and Texas) will be imposed sales tax according to the regulations of that region. Below are frequently asked questions about taxes on PrintBase. If you have any other questions, do not hesitate to contact us for more information.

In this article

A. What is sales tax in the US?
B. What transactions are subject to sales tax?
C. Which US regions impose sales tax?
D. Who will cover the sales tax?
E. Who will remit sales tax to the US government?
F. What are the standard or other rates (i.e. reduced rate) for sales taxes?
G. Does this sales tax apply for both PrintBase and PrintHub products?
H. Why we need to impose sales tax?

A. What is sales tax in the US?

Types of indirect taxes (VAT/GST and other indirect taxes): The United States (US) does not have a national sales-tax system. Rather, indirect taxes are imposed on a sub-national level. Each state has the authority to impose its own sales and use tax, subject to US constitutional restrictions. In many states, local jurisdictions (e.g. cities and counties) also impose sales and use taxes.
Are there other indirect taxes? Depending on the jurisdiction, taxpayers may be subject to property taxes, excise taxes, telecommunication taxes and surcharges, business license responsibilities and unclaimed property-reporting requirements.

B. What transactions are subject to sales tax?

In general, transactions involving sales of “tangible personal property” and select services are subject to tax. States have varying definitions of tangible personal property. A number of states also tax digital goods (e.g. digital audio works, e-books, streaming video). Most states limit the tax to services specifically enumerated by statute. However, a few states tax nearly all services.

C. Which regions impose sales tax?

PrintBase collects sales tax on orders shipped to the United States in the following states: California, Florida, New York, Ohio, Pennsylvania, and Texas.

We’re required to pay sales tax in these states based on the location of our offices and economic nexus in these regions.

D. Who will cover the sales tax?

Taxes will be charged directly to your customers upon checkout by default. You can set up sales tax to be charged to your order's profit instead by following the steps in this article.

E. Who will remit tax to the government?

PrintBase will remit your sales taxes to the US government on behalf.

U.S. states can only require sellers to charge sales taxes if that seller has “sales tax nexus” in that state. Nexus simply means that your business has a significant presence in that state. Here are some of the factors that can establish nexus in a state:

A Physical Presence – Such as a home office, warehouse, store, or other location
Affiliates – Someone who sends customers to your online store for a percentage of the profits from a sale
Personnel – Employees, salespeople, and even some contractors can establish nexus
Drop Shipping – A situation where you have a relationship with a supplier to ship inventory to your customers
Selling items at a trade or craft show
Inventory – If you store goods for sale in a state, sales tax nexus is usually created. If you’re a seller who makes use of third-party fulfillment services like Amazon FBA you’ll generally have sales tax nexus in states where your products are stored for sale

Regarding these criteria, PrintBase should collect sales tax in several states, ie CA, FL, NY, OH, PA and TX.

F. What are the standard or other rates (i.e. reduced rate) for sales taxes?

There is no national sales tax in the US and therefore no standard rate. Sales tax rates vary by state, ranging from 2.9 to 7.25 percent at the state level. In addition to the state rate, local governments in 35 states impose an additional sales or use tax ranging from 1 to 5 percent.

Various states also offer reduced or zero rates on certain types of property, such as food for home consumption, residential utilities and manufacturing-related machinery.

Resources:

California
Florida
New York
Ohio
Pennsylvania
Texas

G. Does this sales tax apply for both PrintBase and PrintHub products?

US sales tax only applies for PrintBase products.

H. Why we need to impose sales tax?

Taxing remote sales via economic nexus laws has been imposed since 2018 and the government has tightened this policy recently. Therefore, in order to maintain seamless operation of your business, sales tax should be imposed for your PrintBase products.

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Manage US taxes on your PrintBase store
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