US Sales Tax

Introduction

From July 1st 2026 we are now handling sales tax in the US on your behalf. Navigating the complexities of sales tax laws across the US can be daunting, but we're here to help. We have become entirely responsible for collecting and paying sales tax in the US.

Why does Payhip handle US sales tax

We've had lots of conversations with creators and a very common pain point for them is the huge burden involved with keeping up with US sales tax. Tax rates frequently change and there are endless rules which are so different across states, cities and even zipcodes.

This article is a good place to start learning about marketplace facilitator laws. Here is an excerpt:

Marketplace facilitator laws impose an obligation on the marketplace facilitator to collect and remit sales tax on behalf of marketplace sellers. These laws are significant because they shift the obligation to collect and remit sales tax from the seller to the platform that facilitates the sale (the marketplace facilitator).

Product tax category

In the US there are varying rules for different product types, for example digital products are exempt from sales tax in California but are required in other states. To choose the tax category for your digital product please take the following steps:

• Visit your add/edit product page
• Scroll down to the "Advanced options" area
• Check the "Customize product tax category" checkbox

For other product types you'll also find the same "Customize product tax category" checkbox you can use to set this up.

If you have a large catalogue of products you can use the bulk editor to assign a tax category in one go.

Tax settings

You can choose if you'd like sales tax to be added on top of your product price or included within it.

Please visit your Tax Settings page, scroll down to the bottom of the page and you'll see the field "If sales tax (VAT) is required for a transaction choose a flow below" which has the following options:

• Add sales tax on top of product price
• Include sales tax within product price

How much does this cost me?

Nothing at all. We won't charge you a cent to manage US sales tax on your behalf.

Filing requirements

Payhip is responsible for collecting and paying US sales tax and not you. However if you have a physical presence in a state where Payhip collects and pays state sales tax on your behalf, you may still be required to file a state sales tax return to that state. This is called a "zero dollar return" since you owe nothing to the state but they may expect a filing. The rules vary significantly by state so it’s worth talking to a tax professional and they'll explain if you have a "zero dollar return" requirement.