POD Store sellers are considered the Merchants of Record. This gives you more independence when selling products to your customers, but includes some additional responsibilities.
In this article:
- What is a Merchant of Record?
- What is Printful Enterprise’s role in tax collection?
- What do I need to know about sales tax when selling online?
- What do I need to know about VAT when selling online?
What is a Merchant of Record?
A Merchant of Record (MoR) is the individual or legal entity responsible for selling goods or services to the end customer.
As the Merchant of Record, you are the official seller of record for each order placed through your POD Store.
What does this mean for your customer relationships?
As the Merchant of Record, you are fully responsible for:
- The sale of products to your customers
- Ensuring compliance with all applicable laws and regulations
- Adhering to intellectual property laws, including:
- Copyrights
- Trademarks
- Patents
You are also solely responsible for:
- Collecting, reporting, and remitting all applicable taxes
- This includes (but is not limited to):
- Sales tax
- Value-added tax (VAT)
- Any other taxes or duties as required by local jurisdictions
- This includes (but is not limited to):
What is Printful Enterprise’s role in tax collection?
As you are the Merchant of Record, this means:
- On your sale to your end customer: Printful Enterprise does not collect, remit, or otherwise manage sales tax, VAT, or any other consumption tax on the transaction between you and your customer. You are solely responsible for determining, collecting, and remitting any taxes owed on that sale.
- On your purchase from Printful Enterprise: Printful Enterprise charges sales tax or other applicable consumption tax on the transaction between you and Printful Enterprise (i.e., the cost of the products/services you buy from us to fulfill the order). This amount is withheld from the funds your customer paid for the order, unless you've submitted a valid resale certificate or other valid tax exemption documentation to Printful Enterprise.
We recommend factoring any taxes into your retail prices. If the profit margin is unable to cover the tax charged by Printful Enterprise, the order will be canceled and refunded.
What do I need to know about sales tax when selling online?
Understanding your sales tax obligations is key to operating your business legally and efficiently.
What is sales tax?
Sales tax is a consumption tax applied to the sale of many goods and services purchased by the end customer. Unlike federal income tax, sales tax is managed at the state and local levels.
Sales tax is typically:
- Calculated as a percentage of the purchase price
- Added to the final retail cost
Am I required to collect sales tax?
You may need to collect sales tax depending on whether you have a sales tax nexus in the states where your products are delivered.
If you have nexus in a state:
- You are required to register, collect, and remit sales tax for that state
- This applies even if your business is located in another state
What is sales tax nexus?
Sales tax nexus is a legal term that refers to a connection between a seller and a state.
You may establish nexus through:
- Physical presence (office, warehouse, employees, etc.)
- Exceeding a certain sales or transaction threshold in a state
Once nexus is established, you are required to comply with the state’s sales tax laws.
Tip: You can learn more about sales tax by visiting the Sales tax section in our Help Center. However, we strongly recommend consulting a tax specialist or CPA for personalized advice on sales tax and applicable regulations.
What do I need to know about VAT when selling online?
Understanding your Value-Added Tax (VAT) obligations is key to operating your business legally and efficiently when selling to customers in Europe.
What is VAT?
Value-Added Tax, or VAT, is a consumption tax applied to almost all goods and services bought and sold for use in the European Union (EU), the United Kingdom, and Norway.
VAT is typically:
- Calculated as a percentage of the total order cost (including shipping)
- Applied to orders sold locally, cross-border within the EU, or imported from outside the EU
- Ranging between 0% and 27% depending on the destination country and product type
Am I required to collect VAT?
You may be required to collect VAT depending on where your business is established, where your products are produced, and where your customers are located.
You may need to collect VAT if:
- You are based in the EU and exceed your country's domestic sales threshold
- Your total cross-border sales within the EU exceed the distance selling threshold (typically €10,000)
- You are selling to customers in the UK or Norway (specific registration rules apply)
Do I need to register for VAT in every country?
No, you generally do not need to register in every individual country thanks to simplified reporting systems.
Key registration systems include:
- One-Stop Shop (OSS): Allows EU-based and non-EU sellers to report and pay VAT for all EU member states through a single quarterly declaration.
- Import One-Stop Shop (IOSS): A system for sellers to collect and remit VAT upfront for imported goods valued below €150, ensuring a smoother customs process for the customer.
- Domestic Registration: You must still register in the country where your business is established or where you hold physical inventory.
We strongly recommend consulting a tax specialist or qualified advisor for personalized guidance on VAT compliance and international regulations.