Does Whatnot Collect Sales Tax? Seller and Buyer Guide

Whatnot sales tax is one of the less glamorous parts of live selling, but it affects every order. In the US, Whatnot generally acts as a marketplace facilitator: it calculates sales tax at checkout, collects it from the buyer and remits it to states that require marketplaces to do so. For most sellers, that means you do not add sales tax to your Whatnot prices or file sales tax returns for those sales.

That does not mean you can ignore tax entirely. Buyers want to know why tax appears on their purchases, sellers who also sell off-platform have their own obligations, sales tax affects your processing fee, and UK and European sellers deal with VAT instead. This guide covers each of those for both sellers and buyers.

Does Whatnot Collect Sales Tax? How Marketplace Facilitator Rules Work

Before marketplace facilitator laws, every small online seller was technically responsible for figuring out whether they owed sales tax in each state they shipped to. That was unworkable, especially after a 2018 US Supreme Court decision (South Dakota v. Wayfair) allowed states to require remote sellers to collect tax. States responded by passing marketplace facilitator laws, which shift the collection duty to the platform.

Today, almost every US state with a statewide sales tax has a marketplace facilitator law. Under these laws, Whatnot generally:

• Calculates the correct sales tax for each order based on the buyer's shipping address and what was purchased.
• Collects that tax from the buyer at checkout, alongside the item price and shipping.
• Remits the tax to the relevant state and handles the marketplace's filing obligations.

For sellers, that means sales made through Whatnot are generally covered. You do not need to add tax to your prices, and the tax collected never passes through your payout.

Whatnot Tax on Purchases: What Buyers See and Why

Buyers often notice a tax line at checkout and wonder why it appears. Here is how it works:

• Based on your shipping address. Sales tax generally depends on where the item is delivered, including state and sometimes local rates.
• Depends on what you bought. Most physical goods are taxable, but some states treat certain items differently, such as some clothing or bullion.
• May include shipping. In some states, shipping charges are taxable; in others they are not.
• Varies by state. States without a statewide sales tax, such as Delaware, Montana, New Hampshire and Oregon, generally do not charge one. Alaska has no statewide sales tax, but some localities do.

What a buyer pays in total is the item price, shipping and any applicable sales tax. Buyers do not pay a fee to bid or join shows. For the full breakdown, see Whatnot buyer fees.

Can Buyers Buy Tax-Free on Whatnot?

Some businesses can buy goods for resale without paying sales tax by providing a resale or exemption certificate. Whether Whatnot supports tax-exempt purchases, and how, is something to check in the help center. Do not assume an exemption will apply automatically.

What Whatnot Sales Tax Means for Sellers

Your Whatnot Sales

For sales through Whatnot, the marketplace generally collects and remits tax in states with facilitator laws, so you typically do not need to collect it yourself. Your prices should be the pre-tax price, and buyers will see tax added at checkout.

Sales Tax and Your Fees

Sales tax is not your income and is not paid out to you. But it does affect your fees slightly. The payment processing fee, commonly 2.9% + $0.30 per order, is generally charged on the order total, including sales tax. On a $50 item with $4.50 tax and $6 shipping, processing is about $2.05 instead of $1.75 on the item alone. Our guide to the Whatnot payment processing fee explains this in detail.

Do You Need a Sales Tax Permit?

If all your sales go through marketplaces that collect tax, many states do not require you to register for those sales alone. But rules vary, and some states may expect registration in certain circumstances. You are also likely to need a permit if you:

• Sell directly to buyers outside Whatnot, such as through your own website or social media.
• Sell at card shows, flea markets or in person.
• Want to buy inventory tax-free from wholesalers using a resale certificate.

Our guide to LLCs and business licenses for Whatnot sellers covers registration and permits more broadly.

Resale Certificates: Buying Inventory Without Paying Sales Tax

When you buy inventory to resell, you may be able to avoid paying sales tax on that purchase by giving the supplier a resale certificate. This prevents the same item being taxed twice: once when you buy it and again when your buyer purchases it.

1. Register for a sales tax permit in your state if required to issue resale certificates.
2. Complete your state's resale certificate form or a multistate form accepted by your supplier.
3. Provide it to wholesalers and distributors before you purchase.
4. Use it only for inventory you will resell, not for personal items or business supplies you will consume.

Keep copies of every certificate you issue and the invoices for the inventory bought with it. If your state audits your purchases, those records show that the tax-free purchases were genuinely for resale.

Misusing a resale certificate can carry penalties, so make sure you understand the rules in your state. For sourcing ideas, see wholesale suppliers for Whatnot sellers.

Common Whatnot Sales Tax Scenarios

Real situations are rarely as tidy as the rules. Here is how the general principles apply to situations sellers commonly run into. Treat these as starting points for a conversation with your tax professional, not final answers.

You Sell Only on Whatnot From Home

This is the simplest case. Whatnot generally collects and remits sales tax on your orders in states with marketplace facilitator laws. Your job is to price items, ship them and keep good income records. Check whether your home state expects any registration from marketplace-only sellers, because a small number of states have had specific rules.

You Sell on Whatnot and at Local Card Shows

Whatnot covers your Whatnot sales, but sales you make in person at a show are your own. Many states require a sales tax permit, and sometimes a temporary event permit, to sell at shows, and expect you to collect tax on those sales. Some event organisers ask vendors for their permit number. Our comparison of live selling vs card shows looks at running both channels.

You Also Sell Through Your Own Website or Social Media

Direct sales through your own store, Instagram or private groups are generally not covered by Whatnot's collection. Once your direct sales into a state pass that state's economic nexus threshold, you may need to register and collect there. Most states set these thresholds by annual sales value, and some also by number of transactions.

You Buy Bulk Inventory From a Distributor

If you pay sales tax on inventory you later resell through Whatnot, where the buyer also pays tax, the same goods are effectively taxed twice. A resale certificate, where your state allows it, can prevent this. Supplies you use up yourself, such as mailers and tape, are generally not covered by a resale certificate.

You Run Giveaways

Giveaway items do not involve a sale to the winner, but you bought the item, and you usually cover the shipping. How giveaway costs are treated for income tax is a separate question from sales tax; track them as a business expense and ask your tax professional.

Sales Tax vs Income Tax: Two Different Things

New sellers sometimes assume that because Whatnot handles sales tax, it handles all tax. It does not.

Your profit from selling is taxable income whether or not you receive a 1099-K. Read our Whatnot 1099 and taxes guide for details on income tax reporting.

Whatnot VAT in the UK

The UK does not have sales tax; it has VAT, which works differently. Prices shown to consumers generally include VAT where it applies, and whether VAT is charged on a sale depends on who the seller is and whether they are VAT-registered.

VAT on Whatnot's Fees

UK seller commission is commonly reported as 6.67% plus VAT, about 8% including VAT. If you are VAT-registered, you may be able to reclaim the VAT on those fees as input VAT. If you are not, the full amount is simply a cost.

VAT on Your Sales

• Below the threshold: UK-established sellers whose VAT-taxable turnover is below the registration threshold, £90,000 since April 2024, generally do not have to register or charge VAT.
• Above the threshold: You must register and account for VAT on your sales. For second-hand goods, the VAT Margin Scheme may let you account for VAT on your margin rather than the full price, if you meet its conditions.
• Overseas sellers: Different rules apply to sellers not established in the UK, and online marketplaces can be treated as responsible for VAT on certain sales.

VAT is complex, so speak to an accountant before you approach the threshold. Our guide to selling on Whatnot in the UK covers wider UK setup, including HMRC platform reporting.

Sales Tax and VAT in Canada and Europe

In Canada, GST/HST and provincial sales taxes apply, and digital platforms can be responsible for collecting GST/HST on some sales. Sellers whose taxable revenue exceeds the $30,000 small supplier threshold generally must register. In the EU, VAT rules include marketplace "deemed supplier" provisions in some cases and the One Stop Shop scheme for cross-border sales. Rules vary by country, so check local guidance and our Whatnot international fees guide.

If you are building a reselling business and want help with sourcing and structure, the Marketplace SuperHeroes free workshop is a beginner-oriented introduction. It is independent of Whatnot, does not offer tax advice, and its organizers say results are not typical or guaranteed.

Bottom Line on Whatnot Sales Tax

In the US, Whatnot generally collects and remits sales tax as a marketplace facilitator, so buyers see tax at checkout and sellers usually do not collect it themselves. Sales tax is not your income, but it slightly raises processing fees. Off-platform sales, resale certificates and UK VAT carry their own obligations.

Next, read the Whatnot 1099 and taxes guide for income tax, or return to the full Whatnot seller fees breakdown.