State Sales Tax: what’s the deal?
State sales tax is a tax on consumption imposed by state and local governments. It applies when you buy goods and want them shipped to – or within – the US. It’s a legal requirement for Depop to collect this fee from sellers in certain US locations whenever they’ve made a sale to a US buyer on our site. The percentage that must be paid varies by state, so you’ll have to do a bit of external research on sales tax by state for a more accurate understanding of charges in different parts of the US. When you sell something to a US buyer, you’ll see the sales tax fee listed on the order confirmation. This information is only given so that you are aware of it though – it’s the buyer that will actually have to pay the charge.
Paying State Sales Tax at Depop
As a buyer, paying state sales tax on Depop is a non-negotiable if you’re you’re located in one of the affected US states. But don’t worry – we've taken some steps to help make the process as smooth and seamless as possible.
If you’re a buyer, you’ll see the tax automatically applied at the checkout – on top of the item price. We’ll do the sums for you and they’ll be based on where you live, as well the final selling price of an item. If you’re a seller, we collect the tax for you from the buyer for you and send it on to the government. Read a breakdown of how it works below and check out our help centre article for more detailed information. If you’re more visual, check out the infographics in the gallery at the bottom.
How State Sales Tax works
We’ve included a few examples below to help you understand how state sales tax works. These should give you a better idea of how we calculate the final fee for this particular type of tax. If you’re a buyer, you may want to try and estimate the amount of sales tax you’ll be charged on certain purchases. This is just so you have a heads up and can budget for the overall amount that you’ll be expected to pay for a product.
Here’s an example of how it works with tax on Paypal:
1. Buyer pays item price ($30) + the applicable tax for their state ($1.80).
Seller total is at $31.80.
2. PayPal fees are deducted – 2.9% of the total price (including sales tax) + $.30c.
$1.22 is deducted.
Seller total is now at $30.58 and received in seller’s PayPal
3. Depop fees are deducted – 10% of the original item price (before tax was added).
$3 is deducted.
4. Depop collects the tax that the buyer originally paid ($1.80) and sends it to the US Government.
$1.80 is deducted
5. $4.80 ($3 + $1.80) is deducted from seller’s PayPal (Depop fee & sales tax)
6. Final seller total is $25.78
Here’s an example of how it works with tax on Depop Payments:
1. Buyer pays item price ($30) + the applicable tax for their state ($1.80).
Seller total is at $31.80.
2. Depop fees are deducted – 10% of the original item price (before tax was added).
$3 is deducted.
Seller total is now at $28.80.
3. Depop Payments fees are deducted – 2.9% of the total price (including sales tax) + $.30c.
$1.22 is deducted.
4. Seller total is now at $27.58.
Depop collects the tax that the buyer originally paid ($1.80) and sends it to the US Government.
5. $1.80 is deducted.
6. Total of $6.02 taken as a fee
7. Final seller total is $25.78
Here’s an example of how it works without tax:
1. Buyer purchases a $30 sweater.
Seller total is at $30.
2. PayPal/Depop Payments fees are deducted – 2.9% of item price + $.30c.
($1.17)
$1.17 is deducted.
Seller total is now at $28.83
3. Depop fees are deducted - 10% of item price ($3).
4. Final seller total is $25.83.