Do I need to charge sales tax on merch or digital products?
Short answer
It depends on what you sell and where your buyers live. Physical merch and some digital products can trigger sales tax in certain states, and international sales can trigger VAT. DeCypher handles sales tax case by case, depending on your business.
Otavio Mayole, Co-founder, DeCypher FinancialsUpdated
The general picture:
- Brand deals, AdSense and affiliate income generally aren't subject to sales tax.
- Physical merch is taxable in most states that have a sales tax.
- Digital products, like courses, presets or e-books, are taxable in some states and not others.
- International buyers can bring in VAT rules, especially in the UK and EU.
Who collects it depends on where you sell:
- Marketplaces like TikTok Shop and Amazon generally collect and send sales tax for you in most states.
- Your own store, on platforms like Shopify, Stan or Kajabi, usually leaves it to you, even if the platform calculates it.
You generally only have to register in a state once your sales there pass that state's threshold, and the thresholds vary.
If you sell products, tell us on your consultation. We'll look at what you sell and where, and tell you how we'd handle it. Sales tax work is scoped separately from our standard plans.