Dropshipping and sales tax... What the hell?

Old Dog

Junior Member

Apr 19, 2016

125

120

• Nov 5, 2018

• #1

Ive been looking into dropshipping but when I see somebody selling a $35 item from say Walmart and they mark it up to $42 I say hey...they make 2 bucks.
But when I do the math and add in sales tax after Ebay fees and such they are going in the hole.
Am I missing something? Can you dropship items without paying sales tax?
How do these people do it?
Just wondering if there is a way to not pay sales tax when you buy an item that ships to another state.

 

W

whiteogreguy

Regular Member

Apr 27, 2017

223

122

• Nov 5, 2018

• #2

most are tax exempt and don't pay it. also most ebay dropshippers settle only make the cashback as margin.

 

Stavro

Senior Member

Jr. VIP

May 17, 2018

949

1,372

• Nov 5, 2018

• #3

If you get a sales tax license from your state, you can file that with your supplier and get a tax exemption on your own purchases, regardless of the destination address.

https://www.walmart.com/taxexempt/
https://tax-exemption.amazon.com/

 

296628

Junior Member

Mar 11, 2018

108

25

• Nov 5, 2018

• #4

It could be they are part of a commission program too.

Are you registering this factor of the biz model?

 

amber dsuza

BANNED

Nov 5, 2018

217

52

• Nov 5, 2018

• #5

i m drop shipper as well but these days its more tough to justify

 

Soucha

Elite Member

Jul 31, 2017

1,959

1,311

• Nov 5, 2018

• #6

Either ask if you can get a tax exemption via your business/resale certificate (walmart is unlikely to do this) or drop-ship from a company with no nexus/presence in your state.

With the tax laws changing though, more and more companies will be requiring tax payments for out-of-state residents, but we'll see how that turns out.

 

Black catty

Junior Member

Nov 3, 2018

114

22

• Nov 5, 2018

• #7

in drop shipping system now IRS and other tax system are seriously involved so register a company first and do proper tax and return if you wanna survival