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In a nutshell, you can sell three types of items on Etsy. It’s a good idea to check out these categories to see where your items fit (or if they fit) into the world of Etsy. Handmade items Vintage goods (20 years or older) Supplies for crafting Some items transcend these categories. For example, you. What to Sell on Etsy. Handmade clothing items are also a favorite selling category so if you have a knack for sewing or embroidery, Etsy may be a good platform for you. 5) Craft Supplies and Tools. 6) Kids and Baby. 3) Homemade or Specialized Candies. 4) Party decorations.
Compared with Amazon or eBay, Etsy maintains a small-time, homegrown feel, thanks to its emphasis on unique handmade goods.The platform and its sellers are doing big-time business, though. In 2017, gross sales on Etsy. In fact, Etsy is large enough that it has started to automatically in some states that have marketplace facilitator laws — just like Amazon and eBay.If you sell outside of those states, however, collecting sales tax might be your responsibility — whether you’re doing big business on the site or just starting out.
Below are five things you should know about sales tax on Etsy. It’s on you to figure out if you have to charge sales tax in a particular state. It all boils down to whether you have nexus, or a substantial connection to a state. That used to mean having a physical presence, such as an office or employees. Today, however, many states now have economic nexus laws as well, which require businesses to collect and remit sales tax if they exceed a certain threshold for revenue or transactions in that state. To learn more, see our post on. Before you start collecting sales tax, you must have a sales tax permit.
It’s illegal to collect sales tax without a permit — so if you have nexus in a state, you’ll have to follow the steps to apply. The process can be different depending on the state, and sometimes a fee is required. Etsy will add sales tax to your listings — but you have to tell it to do so. The platform has a sales tax tool that allows sellers to specify a tax rate by state, individual ZIP code or a range of ZIP codes. However, you need to find the applicable rates and set them up in your account.
![2018 2018](http://www.handmadeology.com/wp-content/uploads/2012/04/21.jpg)
New listings will have that tax rate applied automatically; for listings created before you set up the tax, you’ll want to check to make sure the items are marked as taxable and that the rate is applied. For example, in Alabama, within one ZIP code there are nine unique tax areas and five different rates ranging from 5 percent to 9 percent. That’s a big difference, and if you only go by ZIP code to determine rates, you could collect the wrong amount.
We recommend making sure you always have the right rate by. You might need to add tax to shipping or gift-wrapping services. Some states require businesses to include shipping and/or gift wrapping in the taxable amount. If you don’t know the rules and regulations of the states where you have nexus, you might not be collecting enough tax — a situation that can lead to an unpleasant (and perhaps expensive) surprise. So do your research. Once you know whether to apply tax on shipping or gift wrapping, Etsy makes it easy to set this up on your listings.
You still need to file your own returns. Etsy will break down your transactions for you and tell you how much sales tax your business has collected, but in most states, it’s your responsibility to remit and file returns. (In marketplace facilitator states, you only need to file returns, since Etsy automatically remits the taxes on your behalf.) If you don’t want to do all of that heavy lifting yourself, Avalara TrustFile can help. It and processes your data into a ready-to-send return, allowing you to focus on selling instead of worrying about sales tax.If you are like most sellers, you would probably prefer to spend your time creating beautiful jewelry, clothing, pottery, or other artwork rather than nose-deep in your business financials. At some point, however, money will demand your attention.One of the tricky subjects for all online sellers is the question of sales tax: charging your customers correctly, tracking what you owe, and paying on time.
Even if your sales volume is as tiny as a pair of stud earrings, you are most likely still responsible for collecting and remitting sales taxes on some of your online sales. Etsy’s small-batch sellersAccording to a, selling is a full time profession for only 18 percent of the site’s makers and crafters.
Thirty-seven percent sell on Etsy in addition to holding down a full- or part-time job.The average Etsy seller takes in a bit less than $1,500 per year (based on Etsy’s first quarter 2015 reporting $531 million in revenue made by 1.4 million active sellers).If you are one of Etsy’s many small-scale sellers, you may find it challenging to do everything your business requires on top of working in other roles that help butter your bread. Building your Etsy business requires buying supplies and making your products, keeping your Etsy listings fresh, and shipping out orders to customers.
![2019 2019](http://img.allw.mn/content/diy/2013/06/2_etsy-com.jpg)
On top of all that, you still need to find the time to file the same quarterly sales tax returns. Small is beautiful when it comes to nexusIt used to be that being a small seller kept your nexus worries at bay. You have sales tax nexus in any state where you have a physical presence. For most of the crafters who sell on Etsy, the only point of nexus will be the location of their home or studio.
May have changed that for more successful Etsy selleres. Now, sales tax nexus may be triggered based on total sales revenue or total number of sales. Be sure to understand the latest nexus rules for the states into which you are selling your Etsy goods.
What is 'nexus' and should Etsy sellers care?Your quest toward fully understanding sales taxes on Etsy begins with identifying where you have.Also called “sufficient physical presence,” nexus is a legal term that refers to the connection that a seller has with a particular location. If a seller has nexus in a state, they have to follow sales tax regulations in that state.For most Etsy sellers, identifying where they have nexus is as simple: If you live and do business there, you have nexus there.