Yes, Etsy does charge sales tax on most US orders. The platform calculates the correct state and local rate based on your shipping address, adds it to your total at checkout, and sends the money to the state itself, so individual shop owners generally do not handle it.1Etsy. How US State Sales Tax and Fees Applies to Etsy Orders Combined rates run from about 4% in lower-tax areas to just over 10% in the highest ones, and Etsy applies the same automatic collection to VAT and GST on many orders shipped abroad.2Tax Foundation. State and Local Sales Tax Rates, 2026
How the Rate Is Set on a US Order
Etsy looks at the shipping address on your order and applies whatever combination of state, county, city, and special-district tax applies at that specific location. Two buyers in the same state can end up with different rates depending on the town or county the package is going to.
Five states have no state-level sales tax at all, so no tax is added on orders shipped to them: Alaska, Delaware, Montana, New Hampshire, and Oregon. Every other state, plus the District of Columbia and Puerto Rico, has Etsy collecting automatically.3Etsy. Where Etsy Collects and Remits State Sales Tax
What Parts of Your Order Get Taxed
Sales tax at checkout usually applies to more than just the item price. In most states, the taxable total includes shipping charges, handling, and any add-on services such as gift wrapping or personalization. If a product is $50 and shipping is $5, tax is calculated on the full $55 in states that tax shipping. Not every state taxes shipping, and Etsy applies each state’s rule automatically.
Digital Downloads
Etsy also collects sales tax on digital orders bought by US customers, such as downloadable prints, patterns, and templates.1Etsy. How US State Sales Tax and Fees Applies to Etsy Orders Whether a specific download is actually taxable depends on the buyer’s state. Some states treat digital products the same as physical goods; others exempt them.4National Conference of State Legislatures. Taxation of Digital Products The correct treatment is applied based on where the buyer is.
Clothing, Groceries, and Other Category Exemptions
A handful of states exempt everyday clothing from sales tax, and others exempt groceries or certain necessities. Those exemptions carry over to Etsy purchases. Because sellers on the platform often list handmade clothing, accessories, and food items, the tax on any given order depends on both the product category and the state it ships to. Where an exemption applies, the checkout page reflects it.
VAT and GST on International Orders
Etsy also collects Value Added Tax or Goods and Services Tax at checkout on many orders shipped outside the United States, so the buyer pays the tax up front rather than to the shipping carrier at the door.
United Kingdom
For goods shipped from outside the UK with a value of £135 or less, Etsy charges UK VAT at checkout at the standard 20% rate.5GOV.UK. VAT and Overseas Goods Sold to Customers in the UK Using Online Marketplaces Above £135, VAT and any customs duty are collected by the carrier on delivery instead.
European Union
On orders shipped into the EU from a non-EU country, Etsy collects VAT at checkout when the package value is €150 or less.6Etsy. Will I Have to Pay for Tax, Customs, or Tariffs on My Order Above €150, the carrier collects VAT and customs duty at the border. The EU has agreed to remove the €150 customs duty exemption during 2026, so low-value packages that previously came in duty-free will become subject to customs duties on top of VAT.7European Commission. E-Commerce 150 EUR Customs Duty Exemption Threshold to Be Removed as of 2026 When both seller and buyer are inside the EU, VAT is already built into the listed price.
Australia and New Zealand
Australia requires Etsy to collect 10% GST on imported goods valued at A$1,000 or less; larger orders have GST collected at the border.8Australian Taxation Office. Non-Resident Businesses Making Online Sales to Australia New Zealand requires Etsy to collect 15% GST on goods sold by overseas sellers to New Zealand buyers.9Inland Revenue. GST Obligations for Marketplaces When the seller is based domestically in either country, GST is already included in the listed price.
Other Countries
Etsy also collects VAT or GST on qualifying orders shipped to Norway (on items under 3,000 NOK), Singapore, Canada, India, Japan, and several other markets.6Etsy. Will I Have to Pay for Tax, Customs, or Tariffs on My Order Each country sets its own threshold and rate, and the tax appears on the checkout page before you pay.
Customs Duties Are a Separate Charge
Even when Etsy collects VAT or GST at checkout, that payment does not include import duties or customs fees. Those are assessed separately by the destination country’s customs authority when the package crosses the border and depend on the product type, declared value, and country of origin. The buyer usually pays them to the delivery carrier before the package is released. In the United States, the $800 de minimis duty-free threshold was suspended in August 2025, so imported goods of any value may now face duties, taxes, and fees at the border.10U.S. Customs and Border Protection. Factsheet Suspension of Duty-Free De Minimis Treatment
Getting a Refund If You’re Tax-Exempt
Buyers who qualify for a sales tax exemption, such as nonprofits, government agencies, or resellers buying inventory, can request a refund of the tax charged on an Etsy order. You contact Etsy support after the purchase with the order number, the amount of sales tax charged, and a valid exemption certificate for the state the order ships to.11Etsy. How to Make a Tax Exempt Purchase on Etsy
Etsy accepts the state’s own exemption certificate, the Multistate Tax Commission’s Uniform Sales and Use Tax Resale Certificate, or a Streamlined Sales Tax exemption certificate.11Etsy. How to Make a Tax Exempt Purchase on Etsy There is no way to set up a blanket exemption in advance; the documentation has to be submitted after each order.
What This Means If You’re the Seller
Etsy is treated as a marketplace facilitator, which means the platform, not the shop owner, is responsible for calculating, collecting, and remitting sales tax on Etsy orders. Nearly every state with a sales tax has adopted this type of law, and Etsy covers more than 45 US jurisdictions.3Etsy. Where Etsy Collects and Remits State Sales Tax For most shops, that removes the need to register for a sales tax permit, file returns, or track local rates just for Etsy sales. You can still see the tax that was collected on each order through your payment account and CSV reports.
A few situations sit outside that automatic coverage. If you also sell through your own website, at craft fairs, or on a platform that is not a marketplace facilitator, you are responsible for collecting and remitting tax yourself in states where you have nexus. Storing inventory in a third-party warehouse or having employees in a state can create physical nexus there. And if your total sales across all channels exceed a state’s economic nexus threshold, commonly $100,000 a year, you may need to register in that state for your non-Etsy sales. Most small Etsy-only sellers do not run into these issues, but multi-channel and high-volume shops should track nexus across states, because failing to register where you owe can lead to back tax plus penalties and interest.
Sales tax is separate from income tax. Etsy issues IRS Form 1099-K to sellers who cross the federal threshold of more than $20,000 in gross sales and more than 200 transactions in a calendar year, a threshold that applies for both 2025 and 2026.12Internal Revenue Service. Form 1099-K FAQs13Internal Revenue Service. 2026 Publication 1099 The form reports gross sales, including shipping, refunds, fees, and canceled orders, not profit.14Etsy.