If you’re running a print-on-demand or dropshipping business, congrats—you’ve skipped inventory headaches, minimized overhead, and launched an e-commerce empire with nothing but creativity and caffeine.
But then… comes the “S” word —
Sales tax.
Before your brain short-circuits and you consider becoming a monk to avoid nexus laws, let’s break it down in plain English (with a little sass).
What Is Sales Tax and Why Should You Care?
Sales tax is a state-imposed consumption tax collected on the sale of goods and services. As a seller, you’re responsible for collecting it from your customers if you’re considered to have a sales tax nexus in that state.
💬 TL;DR: If you sell in a state where you have a “connection,” you might owe sales tax.
Do Print-on-Demand & Dropshipping Stores Have to Charge Sales Tax?
Short answer: Yes — sometimes.
Longer answer: It depends on two things:
- Where your business has nexus
- Whether your supplier has nexus too
Let’s Talk Nexus (No, Not the Marvel Villain)
“Nexus” is just a fancy way of saying you have a significant presence in a state. This could mean:
- Having an office or employee there
- Storing inventory (hello, 3PLs)
- Or even hitting a certain number of sales or transactions (economic nexus)
With print-on-demand and dropshipping, your supplier’s nexus could become your tax problem—especially if they fulfill from warehouses in tax-heavy states like California or Texas.
The Magic of the Sales Tax Exemption Certificate
Now for the good news…
You can often avoid paying sales tax when buying from your supplier by using a sales tax exemption certificate. This tells your supplier:
“Hey, I’m reselling this—don’t charge me tax.”
Why does this matter? Because if you don’t provide that certificate, they’ll likely charge you tax at checkout—which means you’re paying tax twice (once when buying, once when selling).
💡 Tip: Most states require a sales tax permit before you can get an exemption certificate.
Print on Demand Sales Tax: Who Actually Collects It?
It depends on your setup:
- Shopify: You control tax settings. You must collect in states where you have nexus.
- Printful / Printify / Gelato: These platforms may collect sales tax for you if they have nexus, but this doesn’t cover your customer-facing obligations.
Bottom line: Know where YOU and your SUPPLIER have nexus. It’s the only way to avoid unexpected tax bills.
So… What Should You Do Next?
If this feels like you’re trying to do algebra underwater, you’re not alone. Sales tax for print-on-demand and dropshipping stores can be confusing—even for seasoned sellers.
That’s why we offer free sales tax compliance calls to help you:
- Identify where you have nexus
- Know when to collect sales tax
- Understand exemption certificates
- Avoid double taxation (and headaches)
📞 Book a Free Sales Tax Compliance Call Today
The only thing worse than being confused about sales tax is getting a letter from a state agency saying: “Hi, you owe us money.”
