---
title: "Does Etsy, eBay or Shopify collect sales tax? | Ledgerbrook"
source: https://ledgerbrook.com/blog/marketplace-sales-tax/
description: "Does Shopify collect sales tax? Which platforms collect and remit it, what you still file, and how to book each case."
---

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# Does Etsy, eBay or Shopify collect sales tax?

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[Omkar Moraye](/about/) · October 25, 2026

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## Does Shopify collect sales tax?

Shopify calculates and collects sales tax at checkout, but on your own store's orders you file and pay it. Only orders placed in the Shop app have been remitted by Shopify, since January 1, 2025. Etsy, eBay and Amazon are marketplace facilitators: they collect and remit the tax on their sales, so it never belongs in your income.

Does Shopify collect sales tax? It does, at checkout, but on orders through your own Shopify store it hands the money to you and leaves the filing to you. Etsy, eBay and Amazon work the other way: they collect the tax, keep it, and pay the state themselves. Sellers on more than one platform end up with two kinds of sales tax in the same bank account, one they owe and one they never touched, and the books usually treat them the same way. That is how a store ends up with a `Sales Tax Payable` balance nobody can explain, or a year of tax counted as income.

This page sorts out which platform does what, what each seller still has to file, and how both cases are entered in QuickBooks Online. It is part of our [ecommerce bookkeeping](/industries/ecommerce/) series; the Shopify workflow as a whole is in [Shopify bookkeeping in QuickBooks Online](/blog/shopify-and-quickbooks-online/).

## Who collects and remits sales tax, platform by platform

A marketplace facilitator law moves the duty to collect and remit sales tax from the seller to the marketplace for sales made through it. Every US state with a statewide sales tax now has one; Missouri’s was the last to take effect, on January 1, 2023, the date eBay’s collection list gives for it. Shopify is a store builder, not a marketplace, so on your own storefront you are the seller of record. These are each platform’s own statements, read October 25, 2026:

| Platform | Collects and remits for you? | What you still do | What it does to your payout |
| --- | --- | --- | --- |
| Shopify, your own store | No. Shopify “doesn’t remit or file your taxes for you” ([Shopify](https://help.shopify.com/en/manual/taxes/us)) | Register in each state where you have nexus, set up collection, file and pay | The tax customers paid is inside the payout and belongs to the state |
| Shopify, Shop app orders | Yes, since January 1, 2025, for orders placed in the Shop app and shop.com ([Shopify: sales tax in Shop](https://help.shopify.com/en/manual/online-sales-channels/shop/sales-tax)) | Report the sales where a state asks for marketplace sales on your return | Deducted from the payout as a line marked Marketplace sales tax |
| Etsy | Yes, for orders shipped to US addresses and digital orders bought by US buyers; sellers “can’t opt out” ([Etsy](https://help.etsy.com/hc/en-us/articles/360000343968)) | Nothing for those orders; your own sales tax settings apply only where Etsy does not collect | Shown in the payment account as “Sales tax paid by buyer (Remitted)” and deducted from the balance |
| eBay | Yes, for items shipped to the states and territories on its list, at no charge ([eBay](https://www.ebay.com/help/selling/fees-credits-invoices/taxes-import-charges?id=4121)) | Nothing for those orders | Taken out before payout, and the final value fee is charged on a total that includes the tax |
| Amazon | Yes, as marketplace facilitator; Amazon “calculates, collects, remits, and refunds sales tax” on third-party sales to states with these laws ([Amazon](https://www.amazon.com/gp/help/customer/display.html?nodeId=202211260)) | Nothing for those orders; some local taxes fall outside the law, such as certain Colorado home rule cities | Collected with the order and withheld; check the settlement for both lines |
| TikTok Shop | Yes; Shopify lists it with Amazon and Etsy as a facilitator | Same as the other marketplaces | Not part of a Shopify payout |
| Facebook and Instagram | No, for orders created on or after August 26, 2025, when Meta stopped acting as a facilitator, per Shopify | Collect and file on these orders yourself | Treat like your own store |

Two lines in that table cause most of the bookkeeping trouble. The Shop app row means a Shopify store can have both kinds of tax in one payout: tax on storefront orders that the store owes, and tax on Shop app orders that Shopify has already paid. And the eBay row means part of every eBay fee is a fee on tax the seller never keeps, which is a real cost that belongs in expenses.

Marketplace tax and your own sales tax booked the same way?

That is a cleanup, not a one-off fix: $99 per month of backlog (20% off 6+ months), one fixed price agreed before any work starts. [Send the file for a free 48-hour review](/contact/?from=blog%2Fmarketplace-sales-tax).

## Marketplace sales: keep the tax out of income

When a marketplace collects and remits, the tax is never the seller’s money or the seller’s debt. The books can show that in either of two ways, and both leave income and `Sales Tax Payable` untouched.

**Net method.** Record sales, shipping and fees from the marketplace’s report and leave the tax out entirely. It is the simpler entry and the one most summary entries use.

**Gross-up method.** Record the tax the buyer paid into a `Marketplace Tax Clearing` account (Other Current Liabilities), then clear it when the marketplace withholds it. The account nets to zero on every order. This is the method to use when the marketplace’s own report shows the tax as a line, because every line of the report then has a line in the books. Intuit’s Sync with Etsy app works this way, posting Etsy’s collected tax to an account it names “Etsy Shop Sales Tax Clearing” ([Intuit](https://quickbooks.intuit.com/learn-support/en-us/help-article/import-transactions/import-transactions-etsy-shop-quickbooks-online/L9G9ONJ5H_US_en_US)).

### An eBay order, worked

An eBay seller sells a $100.00 item with $12.00 shipping to a buyer in a state that taxes shipping, at a combined rate of 8%. eBay collects $8.96 of tax on the $112.00 and remits it. For most categories, eBay’s final value fee is 13.6% “on total amount of the sale up to $7,500,” plus $0.40 for an order over $10.00, and eBay says the total amount of the sale includes “sales tax” ([eBay selling fees](https://www.ebay.com/help/selling/fees-credits-invoices/selling-fees?id=4822), read October 25, 2026).

| eBay order | Amount |
| --- | --- |
| Item | 100.00 |
| Shipping charged to the buyer | 12.00 |
| Sales tax collected by eBay | 8.96 |
| **Buyer paid** | **120.96** |
| Sales tax remitted by eBay | −8.96 |
| Final value fee, 13.6% of $120.96 plus $0.40 | −16.85 |
| **Seller proceeds** | **95.15** |

With the gross-up method:

| Date | Account | Debit | Credit |
| --- | --- | --- | --- |
| Oct 14 | eBay Clearing | 120.96 | |
| Oct 14 | Sales | | 100.00 |
| Oct 14 | Shipping Income | | 12.00 |
| Oct 14 | Marketplace Tax Clearing | | 8.96 |
| Oct 14 | Marketplace Tax Clearing | 8.96 | |
| Oct 14 | eBay Clearing | | 8.96 |
| Oct 14 | Marketplace Fees | 16.85 | |
| Oct 14 | eBay Clearing | | 16.85 |
| Oct 19 | Business Checking | 95.15 | |
| Oct 19 | eBay Clearing | | 95.15 |

`Marketplace Tax Clearing` goes up $8.96 and straight back down. `eBay Clearing` takes in $120.96 and gives out $8.96, $16.85 and $95.15, ending at zero. The net method gives the same result in fewer lines: debit `eBay Clearing` $112.00 for the sale and shipping, and leave the two tax lines out.

About $1.22 of that $16.85 fee is 13.6% charged on the $8.96 of tax. It is part of `Marketplace Fees` like the rest of the fee, not tax.

### Etsy, Amazon and the Shop app

The same two methods work on every marketplace; only where the tax line sits changes.

- **Etsy** shows the remitted tax in the payment account and on the monthly statement under “Sales tax paid by buyer (Remitted),” and its sold orders download has the tax order by order. Etsy also collects Colorado’s retail delivery fee, 31 cents per order shipped there, and says it “nets the fee from your total gross sale amount, just like a tax.” Treat it the same way as the tax. The full Etsy month is in [bookkeeping for Etsy sellers](/blog/etsy-bookkeeping/).
- **Amazon** collects the tax with each order and withholds it from the settlement, so the tax and its withholding both appear in the settlement report. Map the two lines to `Marketplace Tax Clearing`, or leave both out. The settlement as a whole is worked in [Amazon seller bookkeeping](/blog/amazon-seller-bookkeeping/).
- **Shopify’s Shop app** deducts the tax from your Shopify Payments payout as Marketplace sales tax, and puts it back if the item is refunded. If the summary entry credits all of a payout’s tax to `Sales Tax Payable`, the Shop app portion has to come back out of it, or the account will show tax the store does not owe. Intuit’s Shopify connector does this itself: it charges the marketplace tax on Shop app sales to Sales Tax Payable, then “adjusts the Sales Tax Payable liability account to balance the account with the marketplace taxes withheld by Shopify” when the payout arrives.

## Your own store: tax you collect is a liability you file

On orders through your own Shopify store, a site of your own, or in person, you are the seller, and the tax is yours to pay. It goes into the books as a liability when the sale is recorded and comes out only when you pay the state.

A store registered in two states collects tax on its October storefront orders:

| Sales Tax Payable, October | State A | State B | Total |
| --- | --- | --- | --- |
| Opening balance, October 1 | 0.00 | 0.00 | 0.00 |
| Tax collected on October orders | 820.00 | 320.00 | 1,140.00 |
| Tax refunded on October returns | −20.00 | −10.00 | −30.00 |
| **Owed at October 31** | **800.00** | **310.00** | **1,110.00** |

The October summary entries credit `Sales Tax Payable` $1,110.00 in total. When the returns are filed in November, each payment is one bank line:

| Date | Account | Debit | Credit |
| --- | --- | --- | --- |
| Nov 18 | Sales Tax Payable | 800.00 | |
| Nov 18 | Business Checking | | 800.00 |
| Nov 20 | Sales Tax Payable | 310.00 | |
| Nov 20 | Business Checking | | 310.00 |

After both payments the account is back to zero for October. That is the whole test: at any month end, `Sales Tax Payable` equals the tax due on returns not yet filed, state by state. Use a sub-account per state, or a tag, once there are two or more.

Three things move the numbers in practice:

- **Shopify’s tax report is the source, not the payout.** For stores on Shopify Tax, the United States sales tax report gives taxable sales and tax by state and jurisdiction, and Shopify says orders from third-party marketplaces “such as Amazon, aren’t included” ([Shopify finance reports](https://help.shopify.com/en/manual/reports-and-analytics/shopify-reports/report-types/default-reports/finances-report)). Its detailed view has a Filed by channel column that marks the orders a channel files for you.
- **The return can differ from the tax collected.** Shopify notes that the tax due “should generally equal” the tax collected, with differences in states “that impose additional gross receipts taxes or that allow filing discounts.” A discount for filing on time, where a state allows one, is the difference between the liability and the payment: credit it to an `Other Income` account so `Sales Tax Payable` still reaches zero.
- **QuickBooks’ own sales tax center needs the tax on sales forms.** A summary journal entry to `Sales Tax Payable` is enough when returns are prepared from Shopify’s reports or a filing service. For QuickBooks to prepare the returns, the sales have to arrive with tax on them; a journal entry changes the liability but not the return. Intuit’s Shopify connector does it that way: “We record the taxes you’re responsible for in the sales receipt’s Sales tax rate section,” charged to the agency for your location.

Shopify’s automated filing, which filed returns for enrolled stores, is closed to new stores and files only “for sales made through December 31, 2026,” so stores filing from Shopify data will need to file themselves or use a filing service for sales from January 2027 on ([Shopify](https://help.shopify.com/en/manual/taxes/shopify-tax/automated-filing/filing-partners), read October 25, 2026).

## When does a seller have to collect sales tax at all?

Since _South Dakota v. Wayfair, Inc._, 585 U.S. 162 (2018), a state can require an out-of-state seller to collect its sales tax once the seller’s sales into that state pass a threshold the state sets, called economic nexus. Physical presence, such as inventory in a warehouse, can create nexus as well. Thresholds, what counts toward them and when registration is due all vary by state, and some states count marketplace sales toward a seller’s own threshold even though the marketplace collects the tax; Shopify’s help says the same. Before registering, or deciding not to, get the state-by-state answer from a sales tax professional. The bookkeeping side is simpler: whatever states you register in, the tax collected there runs through `Sales Tax Payable` as above, and marketplace tax stays out of it.

## Common questions about marketplace sales tax

### Do I have to pay sales tax if I sell on Etsy?

Not on orders Etsy collects for, which covers orders shipped to US addresses in the states on its list. Etsy says no action is needed and “sellers can’t opt out.” You still handle tax on sales you make elsewhere, such as your own site or a craft fair, and you report your Etsy sales as income on your tax return whatever happens to the sales tax.

### Do you have to pay sales tax as a seller on eBay?

Not on items shipped to the states and territories eBay collects for. eBay says “no action is required on your part, and there are no charges or fees” for its collection. What you do pay is the final value fee on the tax portion of each order, as in the worked order above.

### Do I need to collect sales tax on Shopify?

Only in states where you have nexus and are registered. Shopify collects tax at checkout once you set up collection for a state under **Settings**, then **Taxes and duties**, and it does not collect for a state you have not set up. That is also the usual answer to why Shopify is not charging sales tax on an order. Register with the state before you turn collection on, not after.

### Is Etsy considered a marketplace facilitator?

Yes. Etsy describes itself as a registered sales tax vendor that collects “based on applicable US State enacted marketplace facilitator tax laws.” Amazon and eBay say the same of themselves, and Shopify is one only for orders placed in the Shop app.

### Does Shopify report sales to the IRS?

Shopify Payments issues Form 1099-K when a merchant meets the federal or state threshold. That is an income tax form, separate from sales tax. How each platform’s form is built, and why it rarely equals the books, is in [why your 1099-K doesn’t match your books](/blog/1099-k-and-your-books/).

## When a year of sales tax sits in income

The common file has every deposit booked to Sales, so tax the store owed is inside revenue and marketplace tax is in there too, mixed with it. The fix is a month-by-month rebuild: storefront tax moved from Sales to `Sales Tax Payable` and checked against each return actually filed, marketplace tax taken out of income altogether, and any state where tax was collected but never filed flagged for a sales tax professional. In a year already filed, do it only with your CPA. In an open year it is part of a [QuickBooks cleanup](/quickbooks-cleanup/).

$99per month of backlog20% off 6+ months

> **When to hand this off:** if `Sales Tax Payable` does not match your filed returns, or marketplace and storefront tax were booked the same way for more than a few months, each month has to be split from the platforms’ tax reports before the liability can be trusted. A [free file review](/contact/?from=blog%2Fmarketplace-sales-tax) counts the months and the states first.

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[

 Previous BlogOctober 25, 2026

### Bookkeeping for Etsy sellers in QuickBooks

Bookkeeping for Etsy sellers in QuickBooks Online: sales, every fee type, ads, sales tax and materials, tied to the 1099-K.

Read previous post →

](/blog/etsy-bookkeeping/)[

Next Blog October 25, 2026

### Shopify bookkeeping in QuickBooks Online

Shopify bookkeeping in QuickBooks Online: payouts, fees, refunds, gift cards, sales tax and COGS, with or without an app.

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