Dealing with sales tax, VAT, and resale tax certificates with Printful and WooCommerce

Printful logo

I’ve been using Printful for a few years now.

Printful is an on-demand printing and dropshipping company. They provide a service that allows individuals and businesses to create and sell custom-designed products online, without the need for upfront inventory or production equipment.

Here’s an overview of what Printful does:

1. Product Catalog: Printful offers a wide range of products that can be customized, including apparel (such as t-shirts, hoodies, and hats), accessories, home decor items, and more. These products serve as a blank canvas for customers to add their own designs.
2. Design Customization: Customers can upload their own designs, logos, or artwork to be printed on the chosen products. Printful provides tools to help adjust the design placement, size, and other aspects to ensure it meets the customer’s specifications.
3. Printing and Fulfillment: Once an order is placed, Printful handles the printing process. They have production facilities where the chosen design is printed onto the selected product using techniques like direct-to-garment (DTG) printing or embroidery. Printful ensures quality control during production.
4. Packaging and Shipping: After printing, Printful also takes care of the packaging process, where the products are appropriately prepared for shipment. They offer branded packaging options, such as adding custom labels or including personalized packing slips. Printful then ships the products directly to the end customers on behalf of the store owner.
5. Integration and E-commerce Platforms: Printful integrates with popular e-commerce platforms like Shopify, WooCommerce, Etsy, and more. This integration allows store owners to sync their online stores with Printful, making it easy to add products, manage orders, and automate the fulfillment process.
6. Warehousing and Warehousing & Fulfillment (optional): Printful also offers warehousing services for customers who want to store their own inventory. With the Warehousing & Fulfillment option, customers can send their products to Printful’s warehouses, and Printful will handle the inventory management, order fulfillment, and shipping.

Overall, Printful enables individuals and businesses to create and sell custom-designed products online without the need for upfront investment in inventory or production equipment. They handle the printing, packaging, and shipping processes, allowing customers to focus on the design, marketing, and growth of their online stores.

Photo by Markus Spiske on Unsplash

Integrations

Printful supports integration with several popular e-commerce platforms and plugins. When it comes to plugins similar to WooCommerce, Printful offers direct integration with the following options:

1. Shopify: Printful integrates seamlessly with Shopify, a widely used e-commerce platform. Store owners can connect their Shopify store to Printful, allowing for easy management of products, orders, and fulfillment.
2. Etsy: Printful also has a direct integration with Etsy, a popular online marketplace for handmade and vintage products. This integration enables Etsy sellers to connect their shop to Printful and automatically fulfill orders with custom-designed products.
3. Squarespace: Printful integrates with Squarespace, a website building and hosting platform. By connecting Printful to Squarespace, users can add custom-designed products to their Squarespace website and automate the order fulfillment process.
4. Wix: Printful offers integration with Wix, a website building platform. Users can connect their Wix website with Printful to sell and fulfill custom-designed products.
5. WooCommerce: Printful has an official integration with WooCommerce, which is a widely used e-commerce plugin for WordPress. With this integration, users can add print-on-demand products to their WooCommerce stores and automate the fulfillment process.

Additionally, Printful provides a robust API (Application Programming Interface) that allows for custom integrations with other e-commerce platforms or plugins. This means that even if a specific plugin is not directly supported by Printful, developers can use the Printful API to create custom solutions and integrate Printful’s services into their own systems.

Photo by Karolina Grabowska

Sales Tax

Printful handles just about everything but your website… and taxes. Printful leaves it up to you on how you’re going to handle sales tax, not to mention VAT (Value-Added Tax) (taxes in certain countries). Although their documentation is extensive, and links to several TaxJar guides, it ultimately recommends that you refer to a qualified tax professional.

TaxJar does have a wonderful guide that discusses sales tax on e-commerce platforms. The other cool thing is that TaxJar has integrations with several e-commerce platforms (like WooCommerce) and can automatically file your sales taxes. I am not associated with TaxJar and haven’t tried their services (yet!) but do plan on it.

Before I say anything else, let me kindly state that I am not a tax or legal professional, and the information contained in this article is not tax or legal advice. To be certain all rules and regulations are being followed, you should consult with a qualified tax professional or business lawyer.

That being said, here is what I know about the whole Printful-tax situation…

Printful charges you (the seller) sales tax, on each sale you make. If you make a smaller number of sales, you may be able to recoup your tax costs by either charging your customers tax or by increasing the prices on your items. If you meet the Economic Nexus (just a fancy term that basically means “if you sell more than $x/year”) then you are legally required to collect tax.

But you’re still having to deal with taxes twice… first Printful charges you, and you charge the customer. Technically it’s not “double-taxed” since sales taxes are only being paid to the government once (Printful pays), but since it’s coming out of your pocket, how can we avoid this so Printful doesn’t charge you tax? Resale Tax Certificate.

Resale Tax Certificate

Keep in mind that if you decide to get a resale tax certificate, although Printful won’t charge you tax on items, you’re the one that will be responsible for paying the state for sales tax instead of Printful paying the sales tax. This is probably best left for cases where your businesses meets the economic nexus.

If you sell a lot of items, or you meet the Economic Nexus, you might consider submitting a resale tax certificate. To get a resale certificate, you must register with your government’s taxing authority. TaxJar has an FAQ with more information. Once Printful accepts your resale tax certificate, they will no longer charge you tax in the states you list on the certificate.

Printful products are exempt in these states. If you are a tax-exempt organization, like a non-profit, you can also submit your tax exemption certificate to Printful. Note that a tax-exempt certificate (pay no taxes) and resale tax certificate (you will pay taxes as the reseller) are two separate things.

Note that if you do submit your resale tax certificate to Printful, you will be responsible for paying sales tax to your taxing authority.

In the USA, there are two ways of going about this:

• Streamlined Sales Tax (SST) is an initiative in the United States aimed at simplifying and streamlining the sales tax collection and remittance process for businesses operating in multiple states.

Streamlined Sales Tax Certificate of Exemption

• The Multistate Tax Commission (MTC) is an intergovernmental agency established to promote uniformity and consistency in state tax laws and administration. Its primary focus is on state taxes related to income, sales and use, and property.

Multistate Tax Commission Uniform Sales & Use Tax Resale Certificate

In either case, you must first register your business with the Secretary of State. I recommend forming an LLC. This can be done online in less than an hour and ranges in cost from $50-$300 per state you register in.

If you’re a remote seller, and do not have a physical presence in the states you sell to, Streamlined Sales Tax (SST) might be the best option for you. In order to use SST, you will still need to be a registered business in at least one state (Secretary of State), but then can use SST to register in multiple other states simultaneously (oh, and it’s free). With SST, the registrations are intended for remote sellers, and it doesn’t cost to register for each state. Once you are registered in the appropriate states, you can download the Streamlined Sales Tax Certificate of Exemption and fill it out. You can then submit the resale certificate through Printful’s dashboard. Printful does support the resale tax certificate from SST, so it’s worth doing this if you have the time.

If you have a large-scale operation, or if you have a physical presence in other states, the Multistate Tax Commission (MTC) route might be the best option for you. MTC requires that you apply for a traditional sales tax permit with each state. Once you get a sales tax permit in the states you sell to, you can then submit a resale certificate through Printful’s dashboard. Most states use the Multistate Tax Commission’s Uniform Sales Tax Use Certificate.

The process should look like this:

• With SST: Register business with the state > Sign up with SST and register in appropriate states > Use SST resale certificate
• With MTC: Register business with the state > Apply for sales tax permits in the appropriate states > Use MTC resale certificate

Once you’ve done all of that, you can submit your resale certificate to Printful for the states you’re registered in. Note that not all states support SST or MTC.

Links to resale tax certificate forms:

Streamlined Sales Tax Certificate of Exemption

Multistate Tax Commission’s Uniform Sales Tax Use Certificate

Links from Printful:

How do I submit a resale certificate or tax exemption certificate?

When do I need to charge tax for US orders?

Which states are Printful products tax exempt in?

How do I submit a resale certificate or tax exemption certificate?

Links from TaxJar:

The Seller’s Guide to eCommerce Sales

Retail Tax Certificate FAQ for Online Sellers

Photo by Nataliya Vaitkevich

VAT (Value-Added Tax)

At a basic level and for our purposes, VAT can be thought of as “sales tax in certain countries”. In the US, think of how each state & city charges different sales taxes. That same thought process can be applied to how sales taxes is charged with certain countries.

Do you have to charge VAT? Printful is already paying VAT for the purchase…. so… I think you’re covered (again, not an expert here), but since that money is coming out of your profit, it’s probably best to charge your customer VAT as well so you won’t lose money paying someone else’s VAT.

If you have a large-scale operation you might consider applying for a VAT ID and submitting that to Printful. With a VAT ID submitted, Printful won’t charge you VAT and instead you will pay it to the taxing authority.

Links from Printful about VAT:

What do I need to do to charge the correct VAT rate?

How will VAT apply to orders shipped to Europe?

How is VAT applied to EU-bound orders?

How does Printful charge VAT in the UK?

How do I submit my VAT ID to Printful?

WooCommerce EU VAT Assistant

VAT (Value-Added Tax) in WooCommerce

Note: This plugin automatically updates VAT for the EU. There are several countries that are not in the EU that do charge VAT. You can still use this plugin, but you’ll have to get the rate for the few missing countries and add it in.

With Printful, I use WooCommerce, a plugin for WordPress sites. While WooCommerce does have the ability to determine taxes automatically, it does NOT have the ability to automatically handle VAT (Value-Added Tax).

Some e-commerce platforms may do this for you automatically, but WooCommerce doesn’t.

Here’s how I configure VAT in WooCommerce:

• Install the WooCommerce EU VAT Assistant plugin with WooCommerce
• Save settings WooCommerce > EU VAT Assistant
• Go to WooCommerce > Settings > Tax
• For each of the rates sections, click Update EU VAT Rates, then click Save
• Perform a checkout in a private session and set the address to a country in the EU like Germany or France to confirm working

Success! VAT is now charged for those countries.

Setting up Taxes in WooCommerce

Taxes and VAT on Steroids — Avalara or TaxJar

If you’re a serious e-commerce seller and sell thousands of dollars of items each month, I recommend Avalara to handle your automatic tax/VAT calculation needs. I’ve spoken to one of their representatives at length about their offerings and am sold on it. They have integrations with many e-commerce platforms like WooCommerce, and can automatically calculate tax/VAT down to the specific address!

Their software monitors your sales and will automatically register your business for VAT in the countries needed (if economic nexus is met), whichever is the best fit. They also support IOSS (Import One Stop Shop).

If you ship your own items, Avalara also offers a managed tariff classification service, where their team will go through your products and assign the harmonized tariff codes to inventory. You can also use their search tool to classify products.

For more information visit Avalara.com.

TaxJar also offers some of these services and is rated very high in online reviews, but I have not used it.

Note: I do not work for Avalara and receive no commission for this information.

Other Taxes

Taxes discussed above are only in relation to sales tax. Income tax and other taxes may apply depending on your location. In the US, income tax on corporations is paid to the IRS/state quarterly.

For more information on Printful and tax, see the Printful Taxes Guide.

Links from Printful:

How do I configure my e-commerce platform to charge the correct tax rate?

What is a resale certificate?

How do I submit a resale certificate or tax exemption certificate?

If you are a tax or legal professional and would like to contribute to or revise this article, feel free to comment or send me a message here.

Disclaimer: The information provided in this article is for informational purposes only. It should not be considered legal or financial advice. You should consult with a financial advisor or attorney to determine what may be best for your individual needs. The author does not make any guarantee or other promise as to any results that may be obtained from using this content. No one should make any investment or legal decision without proper professional advice and independent verification of data. To the maximum extent permitted by law, the author disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.

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