Sales tax on your orders is calculated by where the order ships to, not where you're billed. For a campaign with recipients in twelve states, that means twelve different tax outcomes on one campaign. This page explains how that math works, where it shows up on your invoice, and what to do if you're tax-exempt.
#How tax gets calculated
Tax is calculated per shipment, based on:
- The ship-to address — the recipient's state, city, and sometimes ZIP-level rates.
- Whether we collect tax in that state — we're registered to collect in the states where we have nexus. In other states we typically don't collect; the buyer may have a use-tax obligation, but that's between the buyer and the state.
- What's being shipped — most product categories are taxable; some (rare) categories have state-specific exemptions.
- Your tax-exempt status — if you have an approved exemption certificate on file for the destination state, eligible items skip tax. See Tax exemptions.
The calculation happens when the order or fulfillment is priced — not at checkout for the recipient (recipients never see a price). Tax shows on your invoice, not theirs.
#Why tax can vary across recipients in a campaign
A single campaign that ships to a hundred recipients in different states can produce a hundred different tax outcomes. Each shipment is taxed based on its destination:
- A shipment to a state where we collect tax and you don't have an exemption: tax applies at that state's rate.
- A shipment to a state where we don't collect: no tax line for that shipment.
- A shipment to a state where you have an approved exemption: no tax line for that shipment.
This is why a campaign invoice often has a different tax outcome per recipient. The breakdown on the invoice shows the tax per fulfillment, not a single rolled-up tax line.
#Where tax shows on your invoice
Tax appears as its own line on each invoice it applies to. For a campaign or multi-recipient order, you'll see it broken down per fulfillment so you can see exactly which shipments contributed.
If a shipment is to a state where we don't collect, that fulfillment shows no tax line — not a $0 line, just nothing. If a shipment is to a state where you have an approved exemption certificate, same thing: no tax line, with a note that the exemption applied.
For the full anatomy of what a Merch invoice looks like, see Invoice types.
#What changes the tax outcome
A few things move whether tax applies:
- Where it ships. The single biggest factor. Same product to two different states can be taxed differently.
- Whether you have an exemption certificate for the destination state. See Tax exemptions.
- Whether the destination is residential or commercial. Some states have small variations; most don't differentiate for the product categories we ship.
- Whether shipping itself is taxed. Some states tax the shipping line; some don't. Where it's taxed, you'll see it included in the tax line.
We don't move tax rates manually — they come from the official rate by jurisdiction. If a rate is wrong on a specific invoice, ask your account team and we'll reconcile.
#Tax-exempt orders
If your organization is tax-exempt — a resale certificate, a non-profit exemption — you can submit the documentation once and we'll stop charging sales tax on eligible orders to the states the exemption covers.
The flow:
- Upload the certificate under Billing > Tax Exemptions.
- We review and approve it.
- Going forward, orders shipping to that state skip the tax line.
Each state needs its own certificate. An exemption approved for one state doesn't apply to others — you'll need separate documentation for each state where you want to be exempt. Existing invoices that issued with tax before approval aren't retroactively adjusted; exemptions apply forward. See Tax exemptions.
#International orders and cross-border
When merch ships outside the US, the tax picture changes:
- VAT, GST, and import duties apply in many regions (UK, EU, Canada, Australia, others).
- Who pays and where it's collected depends on the shipping arrangement — DDP (we cover duties and import taxes), DDU (the recipient covers them at delivery), or something in between.
- Some regions require us to collect VAT/GST at order time instead of at the border.
The right shape depends on the destination, the order value, and what experience you want the recipient to have. Your account team will walk you through the options when an international campaign or order is on the table.
If you're shipping internationally regularly, it's worth having the tax conversation up front rather than per-order — getting the framework set once means every subsequent shipment lands cleanly.
For submitting an exemption, see Tax exemptions. For how the tax line fits with the rest of what's on an invoice, see Invoice types.