Does Etsy collect sales tax for sellers?

Does Etsy collect and pay sales tax for me?

Yes, for most US orders. Under state marketplace facilitator laws, Etsy calculates, collects and remits US sales tax on orders shipped to the 48 (46 states + DC + Puerto Rico) on its list, for sellers located anywhere. You can't opt out, Etsy adds no extra charge for doing it, and you don't need to set anything up for those places. Three things are still on you: Shop Manager rates for places Etsy doesn't collect, any permit or return your own state requires, and the fact that Etsy's 3% + $0.25 processing fee is charged on the tax too.

Last verified October 29, 2026 against Etsy Help: How US State Sales Tax and Fees Applies to Etsy Orders, Etsy Help: Adding Sales Tax to Listings, Etsy Help: What are the fees and taxes for selling on Etsy?, Texas Comptroller: Marketplace Providers and Marketplace Sellers. Fee change tracker · How we verify

What Etsy does and what you still do

Task	Who handles it	What the source says
Calculate, collect and remit sales tax on orders shipped to listed states	Etsy	Automatic; no action needed and no settings to update for those places. Where a state's rates include home rule cities, Etsy says it collects those local taxes too.
Opting out	Not possible	Etsy Help says sellers can't opt out of Etsy automatically collecting sales tax.
Fee for the service	None	Etsy says it doesn't charge any additional administration charges for this.
Tax on orders to places Etsy doesn't collect	You decide	The Shop Manager sales tax settings are only used there. Rates from 1% to 25%, based on shipping location.
State permit and returns	You (depends on your state)	Etsy doesn't give tax advice and says each seller should research their local laws. Texas says Texas sellers still need a permit and must file returns even if every sale is on a marketplace.
Colorado Retail Delivery Fee	Etsy	Etsy charges Colorado buyers 31¢ per shop on physical orders and remits it; it's netted from your gross sale like a tax.

Which places Etsy collects in

Etsy Help lists 48 (46 states + DC + Puerto Rico) where it is a registered sales tax vendor and collects on all taxable sales when required: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming. The four states not on the list are Delaware, Montana, New Hampshire and Oregon. Etsy notes that whether it charges tax on a given order, and at what rate, depends on each taxing authority's rules and on how the item is listed.

Does Etsy charge fees on the sales tax?

Yes, the processing fee. Etsy's fees page says payment processing is taken from the item's total sale price, including shipping fees and sales tax. The transaction fee is on the item price plus shipping and gift wrap. Here is the difference sales tax makes on one order:

Order (US seller, US bank account)	Processing fee
$25 item + $5 shipping, no sales tax	$1.15
$25 item + $5 shipping + $2.10 sales tax collected by Etsy	$1.21

Arithmetic with Etsy's 3% + $0.25 US rate. The $2.10 tax is an example amount, not a real rate for any state. The tax itself passes through: Etsy's fees page says taxes paid by the buyer are included in the total and then subtracted back out, not deducted from your listing price. For every fee on a sale, see how much Etsy takes per sale.

Setting a rate for places Etsy doesn't collect

The Shop Manager tool is only for US-based sellers. If you decide you need to charge tax somewhere Etsy doesn't collect, Etsy Help says to go to Shop Manager > Finances > Payment settings, open the Sales Tax tab, choose a state, zip code or zip code range, enter the rate in decimal form (8.125 for 8 1/8%) and save. Points from the same page:

New listings get the rate by default; check older listings are marked taxable.
Tax is based on the buyer's shipping location, and the most specific rate you set (a zip code over a state) wins.
With a coupon, tax on the discounted price.
Depending on where you live, you may need a rate for gift wrapping.
Etsy says it doesn't warrant that these amounts will fully satisfy your sales and use tax reporting obligations.

Do you still need a sales tax permit?

That depends on your state, so check with its revenue department. Texas is a clear example of how it can go both ways. Its comptroller says a marketplace seller isn't responsible for collecting tax on marketplace sales once the marketplace has certified it will, but a Texas seller selling through a marketplace is still responsible for having a Texas tax permit and filing returns on time, even if all its sales are on the marketplace. Remote sellers who only sell through a certifying marketplace don't need a Texas permit, but must keep marketplace sales records for at least four years. Other states have their own rules.

How to record Etsy sales tax in your books

Record sales at the item and shipping amount; leave out the tax Etsy collected, since it was never yours.
Record the full processing fee (including the part charged on tax) as an expense.
Each month, total the tax from Etsy's orders spreadsheet and compare it to the "Sales tax paid by buyer (Remitted)" line in your Payment account Activity summary. If your state asks you to report marketplace sales on a return, those two numbers are where to start.
Keep the monthly CSV downloads. They're your record of what Etsy collected for you.

Questions

Does Etsy collect sales tax for me?

Yes, on orders shipped to the 48 (46 states + DC + Puerto Rico) Etsy lists, under state marketplace facilitator laws. Etsy calculates, collects and remits the tax for sellers located anywhere, and no action is needed from you for those places.

Can I turn off Etsy's sales tax collection?

No. Etsy Help says sellers can't opt out of Etsy automatically collecting sales tax, and Etsy doesn't charge any additional administration charge for it.

Does Etsy charge a fee on sales tax?

The payment processing fee (3% + $0.25 for US sellers) is taken from the total sale price including shipping and sales tax. On a $30 order with $2.10 tax, that's $1.21 instead of $1.15.

Where do I see how much sales tax Etsy paid?

In your Payment account Activity summary, in the Sales and fees section, next to 'Sales tax paid by buyer (Remitted)'. For a single order, download the orders spreadsheet.

Do I still need a sales tax permit if Etsy collects?

It depends on your state. Texas, for example, says Texas sellers selling through a marketplace still need a Texas tax permit and must file sales and use tax returns. Check with your state's revenue department or a tax professional.

What is the 31-cent Colorado fee on Etsy orders?

It's Colorado's Retail Delivery Fee. Etsy charges buyers 31¢ per shop on physical orders shipped to Colorado, remits it to the Colorado Department of Revenue, and nets it from your gross sale like a tax. It isn't charged on digital goods.

General information, not tax, legal or accounting advice. Rates change: check the linked official source before you rely on a number. Not yet reviewed by a CPA or EA.