There are 3 parties in a dropshipping situation: 1. Seller, 2. Dropshipper, 3. Customer. Watch this video to find out who needs to collect and pay the sales tax.
Transcript
What in the world is dropshipping? My name is Mansoor Ansari and I’m with Nexus Tax Defense. First of all, what’s a Nexus? A Nexus is a sales tax obligation that you created with another state. Let’s say you’re the seller and I’m the drop shipper and the customer just lives in another state. If you have Nexus and I have Nexus, then I charge you the sales tax unless there’s a resale certificate. Then, you charge your customer sales tax. If I have Nexus and you don’t have Nexus, then I charge you sales tax unless you have a resale certificate. Then you charge the customer the sales tax. If i don’t have Nexus and you have Nexus, then you just charge your own customer the sales tax. If you don’t have Nexus and I don’t have Nexus, then nobody’s collecting sales tax. If you have any questions, give us a call and we’ll iron this out for you.
