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Understanding sales tax

Updated

Buyers and sellers should know how and why sales tax is collected in the OfferUp marketplace. Most U.S. states have enacted marketplace facilitator laws, which shift the responsibility for collecting sales tax from sellers to the marketplace provider. These laws require OfferUp to collect and remit sales tax on behalf of sellers.

For more details on how these laws may impact your purchases and sales, see our FAQs.

FAQs

Why is OfferUp charging sales tax?

Due to marketplace facilitator laws, most states require online marketplaces like OfferUp to collect sales tax on the sales they facilitate. To comply with these regulations, OfferUp calculates, collects, and remits sales tax on certain sales in the applicable states. This applies to shipping sales only, not in-person or off-platform sales.

What states require OfferUp to collect and remit sales tax?
OfferUp calculates, collects, and remits sales tax for orders shipped to all U.S. states except:
  • Delaware
  • New Hampshire
  • Montana
  • Oregon
Where will I see the sales tax amount I’m being charged?
The sales tax amount will be clearly displayed on the cost breakdown before you purchase an item. Sales tax is in addition to the cost of the item and shipping fees.
The sales tax amount will also show on your receipts for shipping purchases. To view your receipts, go to Account > Purchases & Sales > Transactions.
As the seller, do I have to do anything to collect and remit sales tax?

No. OfferUp will automatically calculate and apply the tax rate for items that are sold in to the applicable states. You don’t need to take any additional steps. We will handle the calculation, filing, and reporting as if we had sold the item ourselves.

Tip

If you’re a business, we recommend that you also track your OfferUp sales made into the applicable states so that you don’t separately collect and remit sales tax.

How do you calculate the sales tax on shipped items?
The sales tax rate is based on the buyer’s shipping address. If the buyer’s address is in one of the affected states, they will be charged the appropriate sales tax amount. The seller’s location does not impact the sales tax amount.
Do you collect sales tax on in-person sales?
No. OfferUp does not collect taxes on sales that are paid in cash or through an off-platform payment service. If taxes are due on such sales, you will need to manage that yourself.
Do I pay sales tax on shipping labels?

In some states, sales tax applies to the cost of shipping labels. If this applies to your transaction, the sales tax on the shipping label will be included in the total sales tax amount we collect.

What if I have tax-exempt status?
Even if you have tax-exempt status, you’re required to pay sales tax at checkout to complete your purchase. To get a refund for the sales tax you paid, please contact your state’s Department of Revenue.
I don’t have tax-exempt status, but I think I was charged the wrong amount in sales tax. What can I do?
If you believe you were charged the wrong sales tax amount, please contact OfferUp for help. Start a chat by tapping chat_button.jpg or select Contact Us to submit a request.
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