Drop Shipping & Sales Tax

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Key points around sales tax and drop shipping

Sales tax is governed at the state level

Each state makes its own laws around sales tax, so nexus thresholds and rates can vary.

Printful’s warehouse and fulfillment service creates physical nexus

If you are using Printful’s warehouse and fulfillment service, then you will have nexus where your inventory is stored.

Print-on-demand drop shipping does not create nexus

Using Printful for print-on-demand drop shipping only does not create nexus for the seller.

Marketplaces can establish economic nexus

In states with marketplace facilitator laws, you do not have to manage sales tax for these sales. However, they can create economic nexus, and you will need to manage and remit sales tax through other channels.

When should you charge sales tax?

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