How to Use Etsy's Tax Calculator
Perhaps the most important Etsy policies you need to consider relate to payment. After all, you started your Etsy shop in the hopes of pulling in a few Benjamins. You’ll want to be sure to be sure to convey what forms of payment you’ll accept and your preferred currency to your buyers on your Shop Policies page. As you craft your payment-related policies, you’ll also want to cover sales tax.
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.
Before you can set up Etsy’s tax calculator, you’ll need to have finalized the setup of your shop — which means you’ll have to have added at least one item listing. After you’ve done that, follow these steps:
Click the Your Shop link along the top of any Etsy page.
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 a province from the drop-down list in the Canada section. If you live in another country, select it from the drop-down list under Other Countries.
Click the Add Tax Rate button.
Enter the appropriate tax rate in the Tax Rate box.
If the laws in your area require you to charge sales tax on shipping fees, select the Apply Rate to Shipping check box.
If local laws require you to assess a sales tax on buyers from specific zip codes, click the Zip Code Range or Zip Codes tab, enter the applicable zip code range or zip code, and repeat steps 5 and 6.
Click the Save button.
Etsy saves your settings.