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Tech Update: Collect Sales Tax With the New Checkout

Aug 24, 2010

by TechUpdates

Etsy.com handmade and vintage goods

We’re happy to announce that the new Checkout will support collecting sales tax.

Starting today, you can go to http://www.etsy.com/your/taxsettings and set tax rates for U.S. states, Canadian provinces, and countries where you would like to collect sales tax. You can also indicate whether the tax rate for each region should apply to shipping charges.

The sales tax settings only apply to the new Checkout, so they won’t affect orders until we ramp up the new Checkout late this week. We’re launching the tax settings today so you have time to set your tax rates before we start to roll out the new Checkout.

When a buyer selects a shipping address that matches a region where you set a tax rate, we’ll automatically apply sales tax to the order based on the rate you set for that region. Sales tax will apply to PayPal and non-PayPal orders in the new Checkout.

If you don’t want us to apply sales tax to any orders, you don’t need to do anything.

While we ramp up the new Checkout, many shoppers will continue to use the old Checkout. We won’t apply sales tax to orders that use the old Checkout. However, if you have sales tax settings at PayPal, PayPal will continue to apply those settings to orders processed through the old Checkout.

If you have sales tax settings at PayPal, the new Checkout will ignore these settings, so make sure you set sales tax rates on Etsy.

We plan to start slowly ramping up the new Checkout late this week, so if you would like to collect sales tax from buyers who use the new Checkout, please set your rates by 12 a.m. EST, Thursday, August 26. 

We’ll keep you updated when we start to roll out the new Checkout.

It’s important to note that as a venue, Etsy cannot provide specific tax advice. It’s up to each seller to research their local laws regarding collecting and reporting applicable taxes for Etsy sales. In the United States, tax regulations can vary greatly by location. If you are unsure about the tax laws in your region, we encourage you to consult an accountant or other expert in your area.

To set sales tax rates:

1. Go to http://www.etsy.com/your/taxsettings.
2. Select the U.S. state, Canadian province, or other country from the drop-down lists and click the Add Tax Rate button.
3. Enter the tax rate in the Tax Rate box.
4. Repeat for each additional U.S. state, Canadian province, or other country where you want to collect sales tax. If you want the rate to apply to shipping charges, check the box “Apply rate to shipping.”
5. Click the Save button.

Etsy Sales Tax Settings

If you have questions or feedback, please post in this forum thread.

118 comments

  • okaySK

    okaySK said 9 years ago

    Thanks for adding this option!

  • thecraftpantry

    thecraftpantry said 9 years ago

    YAY!! Thanks so much!!!

  • TwinkleStarCrafts

    TwinkleStarCrafts said 9 years ago

    Thank you so much, Etsy, for the constant support and enhancements!

  • norajane

    norajane said 9 years ago

    this is freaking awesome.

  • PoleStar

    PoleStar said 9 years ago

    SAH-WEET!

  • Blushie

    Blushie said 9 years ago

    Wonderful, thank you Etsy!

  • rarebeasts

    rarebeasts said 9 years ago

    That's cool, another great Etsy upgrade. thanks.

  • sakizome

    sakizome said 9 years ago

    Amazing - constant improvements!

  • pinksnakejewelry

    pinksnakejewelry said 9 years ago

    Great tool addition!

  • paperholiday

    paperholiday said 9 years ago

    Nice, very helpful!

  • candacejean

    candacejean said 9 years ago

    WOW.. big neat! Great idea Etsy admin; very useful. Thank you.

  • ikabags

    ikabags said 9 years ago

    Very useful ! Thanks so much !

  • JoannasPhotography

    JoannasPhotography said 9 years ago

    this is really nice option- thank you!

  • naturalelementssoap

    naturalelementssoap said 9 years ago

    Helpful. Thanks!

  • letterhappy

    letterhappy said 9 years ago

    just saw this up at the top of my shop page.. thanks so much, etsy! :)

  • lovelygifts

    lovelygifts said 9 years ago

    Thank's

  • HandmadeFlowers

    HandmadeFlowers said 9 years ago

    This is going to be helpful, thanks!

  • aliherrmann

    aliherrmann said 9 years ago

    " if you have sales tax settings at PayPal, PayPal will continue to apply those settings to orders processed through the old Checkout. If you have sales tax settings at PayPal, the new Checkout will ignore these settings, so make sure you set sales tax rates on Etsy." So my question is, where will I eventually have to collect sales tax from so as not to double charge? Obviously I do it with paypal now; It seems it would have to be one way or the other. How, at point of sale, would I know if someone is using new versus old checkout.

  • aliherrmann

    aliherrmann said 9 years ago

    " if you have sales tax settings at PayPal, PayPal will continue to apply those settings to orders processed through the old Checkout. If you have sales tax settings at PayPal, the new Checkout will ignore these settings, so make sure you set sales tax rates on Etsy." So my question is, where will I eventually have to collect sales tax from so as not to double charge? Obviously I do it with paypal now; It seems it would have to be one way or the other. How, at point of sale, would I know if someone is using new versus old checkout.

  • vitamini

    vitamini said 9 years ago

    Great! Thanks!

  • Waterrose

    Waterrose said 9 years ago

    So happy to hear that the new checkout will be in place soon! Thanks for all your work on this.

  • CharmedByLaurie

    CharmedByLaurie said 9 years ago

    Great to have...for those who need it.

  • oceansofferings

    oceansofferings said 9 years ago

    Great! Whats even more great is the article on the NEW checkout process! http://www.etsy.com/forums_thread.php?thread_id=6594529

  • alongcameabirdie

    alongcameabirdie said 9 years ago

    That's great to know. Thanks for the new addition.

  • Slowshirts

    Slowshirts said 9 years ago

    - space to write a note to the shop (similar to the old "Message to Seller") So is this "SPACE" to write a messgae to seller more noticeable now?! THIS IS A VERY IMPORTANT ISSUE THAT NEEDS TO BE ADDRESSED DURING CHECKOUT! We have buyers miss it all the time. If you are changing the checkout will you please make this SPACE stand out more? The different address issue of paypal vs. etsy i'm so glad to see worked out, that's wonderful! Thanks!

  • stitchuation

    stitchuation said 9 years ago

    thanks

  • Krystyna81

    Krystyna81 said 9 years ago

    excellent - thank you!

  • VeronicaRStudio

    VeronicaRStudio said 9 years ago

    This is really great, thank you!

  • natalya1905

    natalya1905 said 9 years ago

    This is really great and absolutely necessary feature! Thank you SO MUCH for it!

  • luxcatvintage

    luxcatvintage said 9 years ago

    very helpful! thank you.

  • bylynnkrestel

    bylynnkrestel said 9 years ago

    woo hoo! thank you for including us canucks!!

  • DazzledBeader

    DazzledBeader said 9 years ago

    Good to know! I had it setup through paypal but will setup through etsy too.

  • solsticehome

    solsticehome said 9 years ago

    thank you, thank you, thank you!!! you just made qtrly taxes so much easier! aliherrmann raised a very good question. can you clarify this more for us? and one more comment, (i know i'm being a spoiled brat) but..when you add a shipping calculator, checkout will be perfect! thanks again etsy sue

  • mythofus

    mythofus said 9 years ago

    marking

  • eccolights

    eccolights said 9 years ago

    Sounds wonderful =) Can't wait for the Express Checkout to be up and going too =)

  • vohandmade

    vohandmade said 9 years ago

    Thank you!!!! This makes life so much easier :)

  • carlossantiago

    carlossantiago said 9 years ago

    thanks! good to know!

  • 1AEON

    1AEON said 9 years ago

    Useful option! Thank you!

  • LaughingMoonCreation

    LaughingMoonCreation said 9 years ago

    Very helpful. I love this option. Thank you

  • AntoinettesWhims

    AntoinettesWhims said 9 years ago

    Thank you! That is awesome and will save the headache latter.

  • ilahandhenry

    ilahandhenry said 9 years ago

    This is very, very helpful information on making a legitimate business. Often, tax stuff is so hard for us to navigate. As a new seller, I really appreciate the knowledge. Thanks!

  • lorenabr

    lorenabr said 9 years ago

    Great option! Thanks!

  • patspottery

    patspottery said 9 years ago

    This is just great:>) I have been eating the tax for the Florida buyers.

  • KMalinka

    KMalinka said 9 years ago

    Good. Thanks.

  • passionatelycreated

    passionatelycreated said 9 years ago

    Sounds great!!

  • passionatelycreated

    passionatelycreated said 9 years ago

    Sounds great!

  • sofisticata

    sofisticata said 9 years ago

    Thank you!!!

  • styleforlife

    styleforlife said 9 years ago

    I am excited about this! It helps alot ! xx

  • XOHandworks

    XOHandworks said 9 years ago

    ADMIN- without the option of multiple rates, or being able to use the Paypal settings, you will be forcing many sellers to charge the wrong rates. COLLECTING SALES TAX INCORRECTLY HAS SERIOUS LEGAL IMPLICATIONS FOR SELLERS, especially for those of us who operate our businesses as our fulltime work and are at risk of being audited by our state revenue department. Please do not get us into trouble with our state tax department. Would it be possible for each seller to choose where to apply the tax, either on Etsy OR on Paypal? Then those of us with multiple rates can still charge the correct tax through Paypal until Etsy offers the correct options here,

  • pasin

    pasin said 9 years ago

    Good to know

  • patriciabarden

    patriciabarden said 9 years ago

    hey--anything for The Man, eh?

  • LeafandInk

    LeafandInk said 9 years ago

    Wow, I read through all of these comments after reading the details of the 'Tech Update: Collect Sales Tax With the New Checkout' and i am very thankful that Etsy is always working on our behalf. It seems there are still perhaps details that need to be worked out regarding the sales tax. I am confident that Etsy Admins will sail through this with flying colors : ) Go Etsy! We love you!!! LeafandInk

  • jason2s

    jason2s said 9 years ago

    Good to know

  • talktothewind

    talktothewind said 9 years ago

    thanks!

  • sweetjane

    sweetjane said 9 years ago

    Thanks of the help, I always need to be nudged in the right direction...

  • OldTimePickers

    OldTimePickers said 9 years ago

    Etsy just keeps getting better and better!

  • truesights

    truesights said 9 years ago

    Thanks for adding this, but I think we need the ability to charge several tax rates per state since at least Georgia has county sales taxes that must be charged.

  • AutumnLeavesJewelry

    AutumnLeavesJewelry said 9 years ago

    whoa, going to need to read this after more coffee, then see if hubby can explain all this to me (artist-non buz person) later tonight after he commutes home. thanks for the continual updates on Etsy!!!

  • breadandroses

    breadandroses said 9 years ago

    Not so helpful for Ohio sales taxes since the state collects at sale tex rate in effect in each of the 88 counties. Easier to do it manually when needed.

  • breadandroses

    breadandroses said 9 years ago

    Forgot to add that Ohio taxes at tax rate for county to which merchandise is delivered. I checked w/ state gov't to confirm, too.

  • TwistedCrystals

    TwistedCrystals said 9 years ago

    This makes perfect sense, thank you for continuing to make things easier for us! Two things I would love to see in the works: shipping options at check out for the buyer (that each seller can preset). folders for convos, I've been asking for years... Thanks so much :)

  • FlanneryCrane

    FlanneryCrane said 9 years ago

    Excellente! You love me, don't you? ;0 I agree with Twisted Crystals up there...more than one shipping option would be nice. I would like to offer first class AND priority...especially for smaller items.

  • strawberryluna

    strawberryluna said 9 years ago

    Wow, amazing, very cool and thanks Etsy!

  • PrettyIngrid

    PrettyIngrid said 9 years ago

    Thank you for adding this; so helpful!

  • bellasparty

    bellasparty said 9 years ago

    Thank you so much!

  • judygovintage

    judygovintage said 9 years ago

    Much easier this way...its a help for all sellers!

  • Earthystyle

    Earthystyle said 9 years ago

    this is very helpful!

  • PhotogenicGallery

    PhotogenicGallery said 9 years ago

    Great addition! Thanks for all the new, helpful tools!

  • buysomelove

    buysomelove said 9 years ago

    Oh, wow. This will definitely come in VERY handy. Thanks for a spiffy new tool.

  • bigshedglass

    bigshedglass said 9 years ago

    Etsy is so helpful! Thank you for adding this option, I recently printed out the Tax Tips blog from The Storque and was thinking, "Ok I need to figure this out..." A few days later this announcement arrives and I am so grateful! (I am not a math or tax wiz) Thank you Etsy!

  • OldBaltimoreVintage

    OldBaltimoreVintage said 9 years ago

    thanks for the feature, tech update!

  • RusticLogDecor

    RusticLogDecor said 9 years ago

    Thanks for making it easy for me! I LOVE ETSY.

  • RainyPenguinVintage

    RainyPenguinVintage said 9 years ago

    Very interesting. Thanks so much!

  • Lonraigh

    Lonraigh said 9 years ago

    Awesome! I go to school in California, but live in Maryland, and the differing tax rates would make pricing manually really irritating. Thanks for adding such a helpful feature!

  • RomanceCatsAndWhimsy

    RomanceCatsAndWhimsy said 9 years ago

    Thank you for adding this feature!

  • ekra

    ekra said 9 years ago

    Thank you for continuing to make Etsy better and easier to use!

  • kmdm

    kmdm said 9 years ago

    Thank You ~ this helps me!

  • bellabijoutoo

    bellabijoutoo said 9 years ago

    I am so happy to hear this! It is great o see Etsy take more initiatives to roll out helpful add ons to the site, and make it easier for customers to shop here!

  • syko

    syko said 9 years ago

    Great, but you missed some facts on EU sales tax politics! 1. I need to charge sale tax from all buyers in the European union so you need to add the possibility to add countries for us in the EU, otherwise this will end up as a big mess. 2. Sale tax in Finland is 23% and Etsy does not allow a higher rate than 20%, I now it's crazy, but I have to charge 23%. That's how you get free schools and health care :)

  • syko

    syko said 9 years ago

    I noticed you can add several countries now, sorry! Still need my 23% though :)

  • cardinalhouse

    cardinalhouse said 9 years ago

    What about coupons or discounts? Will that also be addressed with the new checkout? Thanks! xoxo- Kat.

  • michaelangela

    michaelangela said 9 years ago

    Yippee! Less bookwork for me,Thank you!

  • SmithsHallow

    SmithsHallow said 9 years ago

    Thanks so much. This will make it all so much easier once I get my shop up and running.

  • TheLittleRagamuffin

    TheLittleRagamuffin said 9 years ago

    This is a great update to a previously frustrating feature, however as mentioned above, many states (including New York) require sellers to charge sales tax based on each individual state county that the item is shipped to. Overcharging and undercharging sales tax is illegal. I don't mean to sound ungrateful for all of your hard work, but it would be helpful to have sales tax calculated by county, otherwise this new feature is irrelevant for sellers in many states.

  • NishiStores

    NishiStores said 9 years ago

    so is sales tax only applied to the states that are listed?

  • poplovedesigns

    poplovedesigns said 9 years ago

    OH, I hate taxes. Seriously, my husband takes care of that end of things. But sounds like a great feature! <3 Andrea

  • tricia16

    tricia16 said 9 years ago

    There are obviously some issues yet to be addressed, but overall, this sounds like a wonderful improvement. Thanks.

  • courtneyorillion

    courtneyorillion said 9 years ago

    Thank you so much. This is super helpful.

  • incoldstorage

    incoldstorage said 9 years ago

    Thanks for the heads up.

  • JJMFinance

    JJMFinance said 9 years ago

    I love taxes! This is a good feature to help Etsy sellers and highlight the importance of not only following federal tax rules, but also state and local considerations. If anyone has any tax questions--feel free to send me a convo and I will help you out the best I can. (I'm a CPA).

  • Ozarknana

    Ozarknana said 9 years ago

    Can we be sure this is working for ALL sellers before we let it out of the barn? We're not dealing with banners that don't fit or shop announcements being cut off we're dealing with State Revenue Departments...this is a bit more serious and carries sever implications if not done properly. And by the number of Sellers raising concerns already this really needs to be looked over again before it's launched.

  • berrysweettreats

    berrysweettreats said 9 years ago

    Is the sales tax something ever seller should use or just those with registered business names?

  • owlsay

    owlsay said 9 years ago

    Yay! I'm excited to have the new checkout system rolling out!

  • PasticheJewelry

    PasticheJewelry said 9 years ago

    What about if we live in a state with no sales tax? Do we have to charge what the *buyer* would pay in their own state?

  • ElizabethMD

    ElizabethMD said 9 years ago

    WOW Etsy just keeps getting better and better. thank you so much. Thanks for all the hard work you guys do for us.

  • JoannLoos

    JoannLoos said 9 years ago

    Why are you overwriting Paypal?

  • SpareBedroomStudio

    SpareBedroomStudio said 9 years ago

    This is all wonderful and I am glad that Etsy is always trying to improve......however....what about those of us who are on vacation, etc. right now and can't change things by the 12:00 am on the 26th deadline? I have been away since August 22 and won't be back until the 29th....while I am gone I can only check on my phone which limits what I can do....including changing my tax settings before the deadline.

  • RameOttone

    RameOttone said 9 years ago

    Wait wait wait! Your email was sent just hours before the deadline and I had already gone to bed! What are you all thinking doing this with such little time for us to get our act together?! Even if I had been awake, I wouldn't have had the time (nor would it have been an appropriate hour to do so) to call some officials to make sure my tax ID number is good and get this all setup. This deadline... are you saying we won't have the opportunity to decide later that we're going to use taxes? What if our state laws change? What if we decide to sell a new type of product? What if we are trying to sort out legal issues before we start selling, but are already setting up our shop. Will we not have an opportunity to collect taxes later just because we weren't awake when you sent us the letter and we don't already have things set up? I love your changes Etsy, but please continue to give us plenty of notice about them beforehand and allow us to prepare for them. And maybe ask us about them first as well....

  • oneofakindbbeth116

    oneofakindbbeth116 said 9 years ago

    So, I don't really get it is this an option? Why would we want to? Is it important? Is it to late to do it? Sorry for all the questions I think I'm a little tired this morning!

  • julessabjewelry

    julessabjewelry said 9 years ago

    This is fantastic! I've always had trouble getting PayPal to do the right taxes, now I don't have to worry about it! Thanks again Etsy!

  • glassgifts

    glassgifts said 9 years ago

    Thanks everyone for the feedback. I agree RameOttone - having a longer time to make the change on our Etsy sites would be great. Early on I used to think that making Internet sales was exempt from paying California sales tax - and I found-out the hard way that it just isn't so. You are responsible to file sales/use taxes with the state. In California, a tax ID is used for collecting payroll taxes and setting-up a business bank account, but a Seller's Permit is required to sell and collect taxes on the sale. All the info you need about Internet sales and to how to obtain a seller's permit is found online - just type-in CA State Board of Equalization and you'll find all your info and more. Happy Trails...:)

  • DelaneyJewelry

    DelaneyJewelry said 9 years ago

    Being that sales tax is a destination based tax it does not seem close to being accurate. Please let me know if I am wrong here, but that limits us to 1 tax rate per state, and there are so many different rates. Do we just do a ton of research and list the lowest tax rate per state so as not to over charge a customer? I would love some insight here. Thanks!

  • DeBaunFineCeramics

    DeBaunFineCeramics said 9 years ago

    Thanks Etsy: You webmasters are awesome. Etsy is so user friendly, and someone behinds the scenes is always thinking and improving. Much appreciation.

  • DelaneyJewelry

    DelaneyJewelry said 9 years ago

    I need some info on this. Isn't sales tax a destination based tax? There are so many per state. How do we know which tax rate to enter? Do we just choose the lowest rate per state so as not to over charge our customers?

  • TheRoyalDetails

    TheRoyalDetails said 9 years ago

    Great option, I just set mine up!

  • OhFaro

    OhFaro said 9 years ago

    I am SO grateful to etsy for doing away with the Non-Paying buyer issue. I do hope that etsy can offer the sellers with multiple rates in their state a better system. The tax rates in my state are also by destination, but, I'll DEAL with the few in state sales as they come, over having to DEAL with chasing down buyers for payment, canceling a sale and loosing all the work I put into the promotion of the sold-unpaid-for-item. Thanks so much etsy!

  • mom2bee

    mom2bee said 9 years ago

    Excuse but how are you not going to overcharge the customer, if there are different sales tax rates in different counties of differnt states? One size does not fit all - where sales tax is concerned. Better to get this correct insitu testing or you will have a LOT of unhappy consumers, requesting tax refunds from you!!!!

  • FacetsJewelry

    FacetsJewelry said 9 years ago

    I'm the tax man. LOL

  • BotanicalBead

    BotanicalBead said 9 years ago

    Hey, thanks for this, it's a good option.

  • filofashion

    filofashion said 9 years ago

    Great option !!

  • ezliving

    ezliving said 9 years ago

    Great thanks! Making.

  • NowInTechnicolor

    NowInTechnicolor said 9 years ago

    Gee whiz, this tax business is a bit overwhelming to me! Kudos to those of you that have this whole situation figured out. I've read this article a couple of times and I still feel like a space cadet. I don't know if I have any sales tax options set up on Paypal at the moment (I have yet to make an Etsy sale). Why doesn't one site recognize the settings of the other? Also, is it possible to have a tax calculator? Some of the other user comments regarding the legality of over or under charging is quite scary. I don't want to get in trouble with the IRS for goofing tax on a few of my silly baubles.....

  • NowInTechnicolor

    NowInTechnicolor said 9 years ago

    Never mind. I read more in the forum thread and I think I got it now.

  • ledoubleve

    ledoubleve said 9 years ago

    Is there a post somewhere on the benefits of charging sales tax? Why do I need to or not need to charge sales tax?

  • VanBeads

    VanBeads said 9 years ago

    As a New York State based business, why on Earth did Etsy implement this ridiculous sales tax tool?! It's useless to me! I reside in New York, and I can only set ONE tax rate. That is illegal and could result in some serious consequences for my business, not to mention I am going to lose customers right and left if they go to check out and I have to keep sending revised invoices with the CORRECT sales tax amount added to the sale. Etsy, I know you're trying, but come on... PayPal already calculates sales tax PROPERLY. If it ain't broke, don't break it! I'm afraid that unless this gets resolved and quickly, I'm going to have to bail on Etsy before the holiday season...

  • onegearclothing

    onegearclothing said 9 years ago

    I'd really rather do this at the PAYPAL level, not the etsy level. This doesn't help at all.

  • OaklandMagpie

    OaklandMagpie said 9 years ago

    Sadly this has just made me more confused than ever.

  • GstudioStyle

    GstudioStyle said 9 years ago

    If I set my region to my County's specific tax rate how does it effect sales to customers outside my region, and are out of state buyers charged? Confused.

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