Reselling Guides
Do Resellers Pay Sales Tax? When You Buy and When You Sell
Do resellers pay sales tax? Not on inventory bought for resale, and eBay or Poshmark collects it on sales. Here is where the tax still lands on you.
You pay sales tax on a bag of shirts at the thrift register, then a buyer pays sales tax again when one of those shirts sells on eBay. That looks like the same tax charged twice on the same shirt, and it raises the obvious question: do resellers pay sales tax at all, or is somebody getting it wrong? The honest answer splits in two. There is the tax on what you buy, and the tax on what you sell, and the rules for each are completely different.
This is general information and not legal or tax advice. Check your own situation with an accountant or your state's tax department before you change how you buy or sell.
Do resellers pay sales tax when they buy inventory?
Sales tax is built to land once, on the final consumer. A reseller is not the final consumer of a pallet of returns or a rack of polos, so in states with a sales tax, goods bought to resell can usually be bought without it. Ohio says it outright: its Revised Code section 5739.01 defines a retail sale as all sales except those where the purpose of the consumer is to resell the thing transferred, in the form in which it was received.
That exemption is not automatic, though. You claim it, purchase by purchase or seller by seller, with a resale or exemption certificate. Until you hand one over, the register charges you like any other shopper, and that is exactly what happens to most new resellers. They pay the tax on inventory because nobody told them they could ask not to.
So are resellers tax exempt? Not as people. Only the purchase is, and only when the item really is going back out for sale.
| Purchase | Sales tax at checkout | What decides it |
|---|---|---|
| Inventory, no certificate given | Charged | The seller has nothing on file showing a resale |
| Inventory, valid resale certificate on file | Usually not charged | Your state's form, and whether the seller accepts it |
| Supplies you use up, like tape, mailers, a label printer | Charged | You are the final consumer of those |
| Something you buy for yourself | Charged | It was never a resale purchase |
How the resale exemption actually works
Each state with a sales tax runs its own version. Ohio uses its own blanket and unit certificates, and our guide to the Ohio resale certificate walks through STEC B line by line. Many states also accept the Streamlined Sales Tax certificate of exemption, where resale is reason code G, which saves you from learning a new form for every supplier in a member state.
Two practical limits matter more than the paperwork.
The seller does not have to say yes. A wholesaler or liquidator will almost always take a certificate. A charity thrift register often is not set up to run an exempt sale, so plenty of thrift sourcing still carries the tax. Ask before you build a margin around it.
Online buying has its own process. eBay runs a buyer tax exemption program. You upload your documentation, choose resale as the entity type, and eBay says to allow 10 business days for processing, noting that the documents required can vary from jurisdiction to jurisdiction.
The catch when you keep one
A resale exemption follows the item, not the person. Buy ten jackets tax free, wear one, and that jacket is no longer a resale purchase. Most states with a sales tax pair it with a use tax for exactly this case. In Ohio, section 5741.02 reaches property that was excepted from the sales tax as a resale purchase and later used or consumed in a taxable manner. The tax on that one jacket is yours to report.
Do resellers pay sales tax when they sell? The marketplace facilitator rule
Here is the part that clears up the double tax confusion. When your item sells on a large marketplace, the buyer pays the sales tax and the platform sends it to the state. You do not collect it, file it, or remit it for those orders.
That is the marketplace facilitator system, and every big reselling platform runs under it.
| Platform | What it says about sales tax |
|---|---|
| eBay | Calculates, collects and remits it on items shipped to buyers in the states and territories it lists. No action is required, and sellers cannot opt out. |
| Poshmark | Its Posh Remit program calculates, collects and submits state and local sales tax on eligible orders on behalf of sellers, starting April 2019. |
| Mercari | Calculates, collects, reports and remits applicable sales tax on behalf of third-party sellers in the marketplace facilitator states it lists. |
Ohio adopted its version in 2019. The Department of Taxation's alert on the change says that, in general, effective August 1, 2019, marketplace facilitators must collect and remit sales tax on behalf of Ohio customers.
So the shirt from the opening was not taxed twice by mistake. You paid tax at the thrift store as a consumer because no exemption was claimed, and the eBay buyer paid tax as the real final consumer. Claim the exemption where the seller accepts it and only the last sale carries the tax, which is how the system is meant to work.
Where sales tax still lands on you as a seller
The marketplace only covers sales that go through the marketplace. Step outside it and the collection job comes back to you.
- Your own website. A Shopify or Square store is not a marketplace facilitator for your sales. The tax is yours to collect where you are required to.
- In-person sales. A flea market booth, a craft show table, a garage sale of inventory, or a local buyer paying cash.
- Fees in a few states. Separate from what buyers pay, eBay says it may collect sales tax on certain selling fees, which currently applies to US sellers located in Hawaii, South Dakota, Texas and Washington. Texas has been moving to change that, which we covered in this news roundup.
In Ohio, the off-platform sale is where the vendor's license comes in, and the fee, the two license types and where to apply are all in how to get an Ohio vendor license for reselling.
Sales tax and income tax are separate questions
None of this touches income tax. A buyer's sales tax on eBay never becomes your money, so it is not your profit. The profit you do keep is a different tax with different forms and deadlines, laid out in do resellers have to pay taxes. Mixing the two up is how people end up thinking eBay "already paid their taxes" when it only handled the buyer's sales tax.
Common questions
Do resellers pay sales tax on items they buy to resell?
Usually not, as long as they claim the resale exemption. In states with a sales tax, inventory bought for resale can generally be purchased without the tax by giving the seller a valid resale or exemption certificate. Without that certificate on file, the seller charges the tax like any other sale.
Are resellers tax exempt?
Not across the board. The exemption covers purchases of goods you will resell in the form you bought them, not you as a person. Supplies you use up and anything you keep for yourself are still taxable, and many sellers, including a lot of thrift stores, will not process an exempt sale at all.
Do I have to collect sales tax when I sell on eBay or Poshmark?
No, not on orders through the platform. eBay calculates, collects and remits sales tax on items shipped to buyers in the states and territories it lists, and says no action is required from sellers. Poshmark does the same through Posh Remit, and Mercari does it in the marketplace facilitator states it lists.
Do resellers pay sales tax on sales outside eBay and Poshmark?
That is where the duty comes back. Sales on your own website, at a flea market or craft show, or to a local cash buyer are not covered by a marketplace facilitator. Whether you must collect depends on your state, and in Ohio those retail sales are what the vendor's license covers.
What happens if I use a resale exemption on something I keep?
It stops being a resale purchase. States with a sales tax generally apply a use tax to items bought tax free for resale and then used personally. In Ohio, section 5741.02 reaches property excepted as a resale purchase and later used or consumed in a taxable manner, and that tax is yours to report.
Tax at the counter is a margin question
Every dollar of sales tax you pay on inventory you could have bought exempt comes straight out of your profit, and on cheap thrift buys it can be a real share of the spread. Run the numbers on a buy with and without the tax in the Buy or Pass tool and you will see quickly which sourcing channels are worth the certificate paperwork.
The certificate, the vendor license and the bookkeeping are pieces of one setup, and getting that setup right before volume picks up is part of what we cover inside The Income Lab.
Sources: Ohio Revised Code 5739.01 and 5741.02; Ohio Department of Taxation, substantial nexus and marketplace facilitator changes; eBay, taxes and import charges and tax on eBay purchases; Mercari, sales tax for sellers; Poshmark, Posh Remit announcement; Streamlined Sales Tax certificate of exemption. Hero photo: retail checkout area at the Vermont Teddy Bear Company store, by Tessa Bury via Wikimedia Commons, CC BY 4.0.
