{"id":992238,"date":"2026-10-26T10:08:21","date_gmt":"2026-10-26T10:08:21","guid":{"rendered":"https:\/\/www.taxdesk.com\/?p=992238"},"modified":"2026-10-26T10:08:21","modified_gmt":"2026-10-26T10:08:21","slug":"handmade-is-automatically-taxed","status":"publish","type":"post","link":"https:\/\/www.taxdesk.com\/it\/handmade-is-automatically-taxed\/","title":{"rendered":"Handmade is automatically taxed"},"content":{"rendered":"
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Do Etsy and eBay collect tax for you? What\u2019s covered in the US and EU, and what isn\u2019t<\/span>\u00a0<\/span><\/h4>\n

While in the US this is mostly true, in the EU, it depends on what you sell, where it ships from and what it is worth.\u00a0<\/span>\u00a0<\/span><\/p>\n

On US orders, Etsy and eBay act as marketplace facilitators. They calculate sales tax at checkout, collect it from the buyer and remit it to the state. For parcels sent into the EU, the picture differs. The key items are VAT on low-value imports, the \u20ac3 customs duty, VAT on digital items and VAT on platform fees. In both markets, some duties stay with the seller: local gaps, other sales channels, pricing, income tax and reporting.<\/span>\u00a0<\/span><\/p>\n

United States: why platforms collect<\/span>\u00a0<\/span><\/h4>\n

Before 2018, a state could usually demand sales tax collection only from sellers with a physical presence there. The US Supreme Court removed that test in South Dakota v. Wayfair on 21 June 2018. By 30 June 2021, just over three years later, all 45 states with a general sales tax, plus the District of Columbia, had adopted an economic nexus standard. Missouri was the last to sign, and its rule applies from 1 January 2023. Every state with a general sales tax also has a marketplace facilitator law. These laws put the duty to collect on the platform, not on each individual seller.<\/span>\u00a0<\/span><\/p>\n

United States: what eBay and Etsy do<\/span>\u00a0<\/span><\/h4>\n

eBay calculates, collects and remits sales tax for items shipped into the states and territories on its published list. The list covers all 45 states with a general sales tax, the District of Columbia, Puerto Rico and certain local jurisdictions in Alaska. Collection began between 1 January 2019 (Washington and Minnesota) and 1 January 2023 (Missouri). It needs no action and carries no fee. It applies to sellers based in or outside the US, and sellers cannot opt out.<\/span>\u00a0<\/span><\/p>\n

Etsy calculates, collects and remits sales tax on orders shipped to US buyers in most states. For Etsy Payments sales, the tax appears in the seller’s payment account and is deducted from the balance. Etsy uses the category you assign to each listing to work out the tax. You are solely responsible for correct categories and agree to indemnify Etsy for losses from miscategorised listings. Both platforms may also charge sales tax on their own fees. eBay does so for sellers located in Hawaii, South Dakota, Texas and Washington.<\/span>\u00a0<\/span><\/p>\n

United States: what sellers must still monitor<\/span>\u00a0<\/span><\/h4>\n
    \n
  • Places the platform does not cover. A few local jurisdictions fall outside eBay\u2019s collection, for example some parts of Colorado and Alaska. Where tax is due there, you work out the rate and remit it yourself. eBay lets you set up a tax table for such areas.<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
      \n
    • Other channels and physical presence. Sales outside the platform, and offices, employees or inventory in a state, create obligations of their own.<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
        \n
      • Economic nexus totals. Platform sales can count toward a state\u2019s threshold. If you sell through several channels, add them up state by state. eBay\u2019s Seller Hub lets you download a report of eBay sales and tax totals.<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
          \n
        • Registration and filing. Some states still require marketplace sellers to register and file returns. To collect tax yourself, you first need a sales tax permit in each state where you have nexus. States typically expect monthly or quarterly returns, and late filing can bring fines.<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
            \n
          • Occasional sales. One-off sales of personal items are often exempt, and limits vary by state. California and Texas cap them over a 12-month period. Massachusetts sets no specific number.<\/span><\/li>\n<\/ul>\n

            European Union: what the platforms handle\u00a0<\/span><\/h4>\n

            VAT on low-value imports<\/span><\/b>\u00a0<\/span><\/p>\n

            When goods ship from outside the EU and the consignment is worth \u20ac150 or less (excluding shipping), eBay and Etsy are treated as the supplier for VAT. They charge VAT at the buyer\u2019s country rate at checkout and remit it, whatever the shipping method. The same applies when a non-EU seller ships from stock held inside the EU. Above \u20ac150, VAT and duty are normally paid at import. The UK has a similar rule for orders of \u00a3135 or less.<\/span>\u00a0<\/span><\/p>\n

            Import charges<\/span><\/b>\u00a0<\/span><\/p>\n

            Since 1 July 2026, a flat \u20ac3 customs duty applies to consignments worth \u20ac150 or less shipped from outside the EU, where the seller uses the Import One-Stop Shop (IOSS). It is charged once per distinct tariff heading in the parcel, not per package. For example, two cotton t-shirts in different colours count once (\u20ac3), while a notebook, a pen and a pencil case usually fall under three headings (\u20ac9). The measure is temporary, pending removal of the \u20ac150 duty exemption, planned for 2028.\u00a0<\/span>\u00a0<\/span><\/p>\n

            When a parcel ships through eBay International Shipping or the Global Shipping Program, eBay collects import fees on eligible items, including the duty, at checkout. With other shipping methods, the carrier may charge the seller before shipment or the buyer before delivery.\u00a0<\/span>\u00a0<\/span><\/p>\n

            Where neither platform collects the tax, for example on consignments above \u20ac150, buyers may pay VAT and duties at customs clearance or on delivery. Sellers shipping abroad should tell buyers about import charges that may still apply.<\/span>\u00a0<\/span><\/p>\n

            Digital items and VAT on goods<\/span><\/b>\u00a0<\/span><\/p>\n

            Under local laws in certain countries, Etsy collects and remits VAT on digital items delivered by automatic download. For Etsy Payments sales, Etsy collects the VAT from the buyer and pays the tax authority, with no further action by the seller. If the sale does not use Etsy Payments, the seller receives the extra VAT paid by the buyer and must pay it to Etsy. For physical goods, Etsy\u2019s help pages set out the thresholds and rules for the EU, the UK, Norway, Switzerland, Australia and other countries, so check the rules for your buyer\u2019s country.<\/span>\u00a0<\/span><\/p>\n

            VAT on fees and pricing<\/span><\/b>\u00a0<\/span><\/p>\n

            Depending on business status and location, Etsy may apply VAT to seller fees and remit it. Listed fees exclude VAT. Sellers outside the US and Canada may need to include applicable taxes in their listing prices. For non-US sellers, Etsy\u2019s transaction fee applies to the listing price, which should include any taxes the seller is responsible for. Fees also exclude withholding taxes, and sellers may not deduct them. In certain places, Etsy may withhold taxes from payments where the law requires it.<\/span>\u00a0<\/span><\/p>\n

            Reporting and income tax<\/span>\u00a0<\/span><\/p>\n

            Platform collection covers transaction taxes only. Sellers remain responsible for income tax, and for any tax the platform does not collect, including fines and interest. eBay may issue a Form 1099-K, depending on the gross amount received. Etsy issues 1099-K forms to certain US sellers and reports seller and transaction details to authorities where the law requires it. Keep clean records so your figures match what platforms report.\u00a0<\/span>\u00a0<\/span><\/p>\n

            Home-country rules also apply. In the UK, which is outside the EU, gross trading income above \u00a31,000 in a tax year usually means registering for Self Assessment, and marketplaces report sellers above certain activity levels to HMRC.<\/span>\u00a0<\/span><\/p>\n

            US and EU at a glance<\/span>\u00a0<\/span><\/h4>\n\n\n\n\n\n\n\n\n\n
            Topic<\/span>\u00a0<\/span><\/td>\nUnited States<\/span>\u00a0<\/span><\/td>\nEU and other non-US markets<\/span>\u00a0<\/span><\/td>\n<\/tr>\n
            Tax on goods<\/span>\u00a0<\/span><\/td>\nPlatform calculates, collects and remits sales tax where required.<\/span>\u00a0<\/span><\/td>\nFor consignments of \u20ac150 or less, eBay and Etsy collect VAT at checkout as deemed supplier (UK: \u00a3135 or less). eBay collects the \u20ac3 duty on eligible items through its managed shipping programs.<\/span>\u00a0<\/span><\/td>\n<\/tr>\n
            Digital items<\/span>\u00a0<\/span><\/td>\nEtsy collects sales tax on digital items in states that tax them. The listing category drives the calculation.<\/span>\u00a0<\/span><\/td>\nEtsy collects and remits VAT under local laws in certain countries.<\/span>\u00a0<\/span><\/td>\n<\/tr>\n
            Tax on platform fees<\/span>\u00a0<\/span><\/td>\neBay: sellers in Hawaii, South Dakota, Texas, Washington. Etsy: where applicable.<\/span>\u00a0<\/span><\/td>\nEtsy may apply VAT, depending on business status and location.<\/span>\u00a0<\/span><\/td>\n<\/tr>\n
            Pricing<\/span>\u00a0<\/span><\/td>\nTax is added at checkout. Etsy\u2019s 6.5% transaction fee excludes it.<\/span>\u00a0<\/span><\/td>\nSellers outside the US and Canada may need to include taxes in listing prices. Etsy\u2019s fee applies to the tax-inclusive price.<\/span>\u00a0<\/span><\/td>\n<\/tr>\n
            Seller duties<\/span>\u00a0<\/span><\/td>\nLocal gaps, other channels, nexus totals, registration and filing.<\/span>\u00a0<\/span><\/td>\nTaxes the platform does not cover, withholding taxes, and telling buyers about import charges that may still apply.<\/span>\u00a0<\/span><\/td>\n<\/tr>\n
            Reporting<\/span>\u00a0<\/span><\/td>\nForm 1099-K may be issued. Etsy reports where the law requires.<\/span>\u00a0<\/span><\/td>\nEtsy reports seller details where the law requires.<\/span>\u00a0<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

            \u00a0<\/span><\/p>\n

            Quick answers<\/span>\u00a0<\/span><\/h4>\n

            Do Etsy and eBay charge tax to buyers? <\/span><\/b>In th<\/span>e US, yes, in the states where they are required to. Both calculate it at checkout and remit it to the state. For parcels into the EU worth \u20ac150 or less, both platforms collect VAT at checkout. The \u20ac3 duty applies to IOSS consignments, and eBay collects it at checkout on eligible items shipped through its managed programs. Above \u20ac150, buyers usually pay VAT and duty at import.<\/span>\u00a0<\/span><\/p>\n

            Can I opt out of eBay\u2019s US sales tax collection? <\/span><\/b>No. Sellers offering delivery in the US cannot opt out, and eBay charges no fee for the service.<\/span>\u00a0<\/span><\/p>\n

            Do I still need a US sales tax permit? <\/span><\/b>Not automatically. Some states still require marketplace sellers to register and file returns, and you need a permit to collect tax yourself where the platform does not. Check each state where you sell.<\/span><\/div>\n

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