What Print-on-Demand Sellers Need to Know About Sales Tax in 2025

With a global market value that’s projected to reach almost $13 billion in 2025, print on demand (POD) has become a game-changing business model for entrepreneurs and creatives alike.

While multiple platforms have made it easier than ever to start your own custom POD product line, sellers can face significant challenges if they’re not aware of their tax obligations. Let’s review what you should know as a POD seller when it comes to sales tax nexus, platform-specific considerations, compliance for single and multistate operations, and tax collection and management. 

Sales Tax Nexus for Print-on-Demand Sellers

Nexus is what obligates states or jurisdictions to collect and remit sales tax, commonly broken out into two categories and based on unique qualifiers that can vary state by state.

• Physical nexus may arise if your printing facilities are located in certain states, creating a direct connection that obligates you to collect and remit sales tax there.
• Economic nexus means that even without a physical presence, exceeding a state’s sales or transaction threshold could trigger tax responsibilities.

Either of these situations may be further complicated for POD sellers with multiple printing locations, resulting in overlapping obligations across states with differing nexus criteria, or when drop-shipping arrangements create nexus in states where customers or suppliers are located. Staying informed of how and where your operations are creating nexus and proactively addressing how your transactions are structured are the best ways to minimize risks and ensure compliance in this ever-evolving landscape.

Third-Party Platform Tax Considerations

In many cases, major marketplace platforms that facilitate sales are now required to collect and remit sales tax on behalf of sellers thanks to marketplace facilitator laws.

While this means you may not be responsible for collecting and remitting sales tax for items sold through these platforms, it’s important to know that each marketplace has its own individual policies and procedures.

• Amazon handles most tax obligations, but sellers may still have reporting obligations in states where they have nexus.
• Etsy handles tax obligations for sales made through its platform, but sellers remain responsible for other sales, such as those done in person.
• Shopify enacted a new policy in January of 2025 to collect and remit taxes on all US nexus orders made through the Shop sales channel, but sellers remain responsible for sales made through any other channels on the platform.

These varying policies across platforms can be complex, but staying up to date on the requirements for those you use the most and maintaining compliance is the best way to help your POD business reach its full potential.

Single and Multistate Tax Compliance

The regulations behind sales tax nexus can vary largely across all 50 states and are frequently subject to change, including how some states no longer consider 200 separate transactions as a qualifier for economic nexus in an effort to reduce compliance costs and responsibility.

While some states fully exempt things like clothing from sales tax, others may tax it at reduced rates or only exempt items below a certain price threshold. When it comes to digital products and custom items, taxes can be more nuanced, even when it comes to something like shipping charges, which some states consider to be part of the taxable sale, while others do not. 

At a minimum, POD sellers should ask themselves three questions:

1. Do I have sales tax nexus (physical or economic) in a particular state?
2. Are the products that I’m selling taxable in that state?
3. Based on how I’m selling these products, am I responsible for collecting and/or reporting the sales taxes?

The answers to these questions can often lead to the need for tax registration in multiple states, each with its own filing frequencies and due dates. If not handled early, managing these various jurisdictions—including local tax obligations—can quickly become overwhelming for sellers.

Professional Sales Tax Management and Support

As your POD business grows and expands into new markets, it’s important to understand and establish your sales tax obligations, ensuring compliance across platforms and jurisdictions.

With tax rates and regulations constantly evolving, staying up to date can be challenging, but setting up proper collection systems, implementing reliable calculation tools, and developing processes for managing returns and refunds can mitigate these challenges once you’ve determined your sales tax liability. Investing in the right tools can save you significant time, money, and stress in the long run.

The potential for print-on-demand business is only expected to grow as long as sellers regularly assess their nexus status, understand third-party platform policies, know their state-based obligations, and leverage the best tools and resources. If any of these complexities are holding you back, The Sales Tax People can help. Contact us today to review your sales tax responsibilities, discuss compliance strategies, and provide the support you need to make your POD business a success!