US sales tax on Gumroad
Disclaimer: This article is neither legal advice nor tax advice. We recommend that you speak to your tax advisor with any questions or concerns about tax reporting. Also, this article intends to address only U.S. sales tax matters—not federal or international tax matters.
In this article:
- Taxes managed by Gumroad
- Taxes managed by the creator
Taxes managed by Gumroad
Gumroad is registered as a marketplace facilitator and is required to collect and remit sales taxes on eligible sales to buyers in the followings states:
|Wisconsin||Discover sales only||March 30, 2022|
|Washington||Discover sales only||November 22, 2022|
Please note that if the eligibility for a state is “Discover sales only”, then Gumroad will handle collecting and remitting sales taxes on your behalf for sales via Gumroad Discover only.
Taxes managed by the creator
In all other states where Gumroad does not have sales tax collection, reporting, and remittance responsibility, you can manually collect taxes on sales of your physical products and remit them to the authorities yourself.
Before you start, we recommend you consult a tax advisor to determine which states you may have nexus in, whether or not your product sales are taxable there, and then acquire the proper permits.
Once you have confirmed that you have a specific sales tax responsibility, go to "Apply sales tax in…" on your Settings page and select the states where you have nexus and proper sales tax permits.
Click "Update settings" to save your changes. You can modify your sales tax settings at any time; however, any changes you make to the sales tax settings will not apply retroactively to previous purchases.
Inclusive vs. exclusive sales tax
To charge sales tax on top of the price of your product, toggle on "Collect sales tax on top of this price" in the pricing section of your physical product. Otherwise, your product’s retail price will include sales tax.
If you have nexus in a state but are selling a product that is tax-exempt or non-taxable, you can make the necessary adjustments by unchecking the box next to the appropriate state. The table will reflect the total price of your product, inclusive of the estimated applicable sales tax.
The checkout experience
Once you've published your product, sales tax collection is determined by the address entered by the customer during checkout. Only those customers located in states where you've chosen to collect sales tax will be charged sales tax.
Exporting sales tax data
Download your sales CSV to see a breakdown of the sales tax collected.
For each customer, the CSV file's "Sale Price ($)" column shows the total amount paid, including sales tax. The "Taxes ($)" column shows how much sales tax was charged. The "Tax Included" column indicates whether sales tax was included in the product's retail price (indicated by a "1") or charged on top of the product's retail price (indicated by a "0").
Now that you've collected sales tax, it's up to you to double-check, reconcile, and remit the sales tax owed to the appropriate tax collecting agency. We highly recommend that you consult with a local tax professional to confirm the frequency and method of remittance, which may vary from state to state.