Sales tax for online sellers: who collects what?
On Amazon, Etsy, eBay and Walmart, the marketplace usually collects and sends sales tax for you under marketplace facilitator laws. On your own Shopify or website store, you're responsible. You still may need to register in states where you have nexus, and marketplace sales can count toward thresholds.
Updated November 2026 · By Pankil Kumar, Managing Partner
Quick facts
- Marketplaces. Amazon, Etsy, eBay and Walmart usually collect for you
- Your own store. Shopify and your own site are on you
- Inventory. Stock in a warehouse can create physical nexus
How do marketplace facilitator laws work?
All states with a sales tax now treat large marketplaces as the seller for tax purposes. So when someone buys from your Amazon or Etsy listing, the platform calculates, collects and sends the sales tax. You'll see that tax on your reports, but it doesn't belong to you.
Good news, if you only sell on one marketplace, your work may be close to nothing. But "close to" isn't always zero. Some states still expect a registration or a zero return, so check.
What about your own website?
Shopify, WooCommerce and Squarespace can calculate tax for you, but only where you've turned it on. The platform isn't the seller, you are. So you register, set up collection for each nexus state, and file the returns. A tax app can automate most of it, but someone has to check the output.
| Channel | Who collects | Who files |
|---|---|---|
| Amazon, Etsy, eBay, Walmart | Marketplace | Marketplace, mostly |
| Shopify or your own site | You | You |
| Wholesale to retailers | Usually no tax, with certificate | You keep certificates |
How do your channels add up?
Here's where sellers get caught. In many states, marketplace sales count toward your economic nexus threshold, even though the marketplace collects the tax. So $80,000 on Amazon plus $30,000 on Shopify could put you over $100,000, and then your Shopify sales need tax. Check how thresholds work.
Why does FBA create nexus?
If you use Fulfillment by Amazon, your stock can sit in warehouses across many states. That's a physical presence, whatever your sales total is. Download Amazon's inventory location reports and keep them. If you also sell on your own site, this can trigger registration even at low volume.
How should you book sales tax?
Record gross sales and the sales tax separately. Sales tax is a liability, not income, and marketplace payouts are net of fees and tax. If you book only the deposits, your income will be wrong. Your 1099-K will show a gross number that won't match your bank, and your books should explain the gap. Our sales tax service can tie it all together.
Sources
General information, not tax advice for your situation.
Selling in more than one state?
We check where you owe and file the returns.
See our sales tax serviceDo I need a sales tax permit if I only sell on Etsy?
Often not, because Etsy collects, but rules vary. Some states want registration anyway, and your home state may too.
Does Shopify collect and pay sales tax for me?
It can calculate and collect tax if you set it up, but you remain responsible for registering, filing and paying.
Do I pay income tax on the sales tax Amazon collects?
No. Sales tax collected isn't your income, but keep records so your books match your 1099-K.
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