Print-on-demand sales tax: supplier-created nexus explained

Print on demand has the same two-transaction structure as dropshipping: your supplier sells to you, and you sell to the customer. What is different is that the supplier is manufacturing, not just shipping, and manufacturing happens in specific buildings in specific states.

Does your printer's facility give you nexus?

Generally, using an unrelated third party to fulfil orders is weaker than holding your own inventory in a state. You do not own goods sitting in their facility; they make each item on demand from their own materials.

But states differ in how far they reach, and some have taken expansive positions on what constitutes doing business through another party. This is a question to get a view on rather than to assume in your favour, particularly if a printer's facility is in a state where you also have substantial direct sales.

The supplier invoice side

Your printer may be required to charge you sales tax on the wholesale transaction unless you provide a resale certificate. Since they ship to your customer's address, the relevant state changes with every order — which is why POD suppliers ask for certificates covering the states they operate in.

• Register your certificate with your supplier before the first order, not after tax appears on an invoice.
• Check which states your supplier collects in; most publish this.
• Multi-state uniform forms cover several states in one document where accepted.
• Diarise expiries — some states time-limit certificates.

The mechanics are the same as in dropshipping, and the detail is in the resale certificates guide.

Who collects on your sales

The last row matters and is often misunderstood. Some POD platforms sell directly to the end customer and pay you a royalty; others fulfil orders you made. In the first case you are licensing a design, in the second you are the retailer. The tax answers are completely different, and your platform's terms will tell you which one you are.