Sales Tax for Apparels Dropshipping

[Ami_Sampat]

Hello 

We are dropshipping custom tshirt and want to know if we should charge sales tax to our customer or not. I have checked online and it has mixed reviews some of them says we dont have to charge and some of them says we have to. 

So can someone help us here. 

[Cian_H]

Hi Ami,

Cian here from Shopify. Thanks for getting in touch. That's a fantastic question!

When it comes to sales tax, drop shipping is certainly an area where it's easy to get confused. The reason drop shipping is so confusing for the seller is due to the intricacies involved with the sales tax nexus.  

In certain scenarios the seller can be responsible for the sales tax and in other scenarios the responsibility can fall to the drop shipper. What's more, this can change from state to state.

However, there is help at hand. Check out the two blog posts below from TaxJar. They do a great job in offering insights as to how a drop shipper should account for sales tax.

Drop Shipping and Sales Tax, Demystified: http://blog.taxjar.com/drop-shipping-sales-tax/

Sales Tax 101: I’m in a Drop Shipping Relationship. Now What?: http://blog.taxjar.com/drop-shipping-scenarios-sales-tax/

Hope that helps!

Best,

Cian

[harpreetkaur]

Drop shipping is a retail method in which you don't keep products in stock. Instead, you partner with a wholesale supplier that stocks its own inventory - you transfer customer orders and shipment details to them, and they ship the goods directly to the customer. The biggest benefit of drop shipping is you don't have to worry about fulfillment or inventory issues. Also, most customers don't know you're drop shipping, since "private label shipping" lets you ship from the wholesaler with a return address and invoice customized to your ecommerce store.

The Benefits of Drop Shipping 

1. You Don't Need Buckets of Money

2. Convenience & Efficiency

3. Mobility

4. It's a Trusted Model

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