State sales tax
What is state sales tax?
State sales tax are taxes placed by state and local governments when you purchase goods. Depending on the buyer’s delivery address, some states require sales tax be calculated on the cost of the goods plus the cost of shipping. Tax rates vary by state and are paid by the party who is purchasing the goods (buyer).
How does sales tax affect SELLERS?
As a marketplace facilitator, SwagDeel is obligated by law to collect and remit sales tax on behalf of marketplace sellers. Marketplace facilitator laws shift the obligation to collect and remit sales tax from the seller to the marketplace platform. For sellers, there is no action required to collect and remit sales tax from buyers; SwagDeel will do this on your behalf. Sales tax will be added to the buyer’s total at the time of the sale. Your personal or business tax returns are not impacted by this process.
How does sales tax affect BUYERS?
Sales tax is added on top of the item price. Depending on the buyer’s delivery address, some states require sales tax be calculated on the cost of the goods plus the cost of shipping. Since SwagDeel is an online marketplace platform, by law we are required to collect and submit sales tax from sellers after they make a sale. Buyers will see the sales tax breakdown on their receipt. For help with explaining how sales tax is calculated we have shown an example below. Feel free to reach out to SwagDeel support with any questions.
If a buyer purchases an item that costs $15.00, and the shipping is $5.00, the sale from the seller is $20.00. If the buyer’s delivery location tax rate is 5.3%, the buyer will pay $1.06 in sales tax for this transaction. The total amount paid by the buyer for this item will be $21.06. SwagDeel will remit $1.06 sales tax to the government on behalf of the seller.