How to Use Etsy's Tax Calculator
If, after checking the local laws in your area and consulting a smarty-pants accountant, you've determined that you must collect sales tax, you can easily do so. In fact, with Etsy's tax calculator, you can collect sales tax during the checkout process. When you do, Etsy automatically assesses a sales tax for buyers in the region that you specify.
To set up Etsy's tax calculator, log in to your Etsy account and follow these steps:
Click the Your Account link along the top of any Etsy page.
The Your Account page opens.
Click the Shipping & Payment link, under Shop Settings, on the left side of the page.
The Shipping & Payment page opens.
Click the Sales Tax tab.
The Sales Tax Settings page opens.
If you live in the United States, click the State drop-down list and choose your state.
If you live in Canada, choose your province from the Canada drop-down list; if you live elsewhere, choose your country from the Other Countries drop-down list.
Click the Add Tax Rate button.
The United States (or Canada or Other Countries) box expands to include additional settings.
Enter your state's tax rate in the Tax Rate box.
You will have to check to see what the tax rate is in your state.
(Optional) Select the Apply Rate to Shipping check box.
Not all states require you to charge sales tax on shipping fees.
(Optional) Click the Zip Code Range or Zip Codes tab, enter the applicable zip code range or zip code.
Check local laws to see if you are required to assess a sales tax on buyers from specific zip codes,
Click the Save button.
Etsy saves your settings.