US sales tax: Etsy handles it
Etsy is a marketplace facilitator. For eligible orders shipped to the US, and for digital items sold to US buyers, it calculates the state sales tax, collects it from the buyer and pays it to the state. This applies to sellers anywhere in the world. You don’t collect that tax yourself.
The rate depends on the buyer’s location, whether the item is taxable and how it’s classified, so there is no single “Etsy sales tax” percentage for the US. On the Earnings tab, the buyer’s tax appears on both sides of the statement, so it doesn’t reduce what you earn. You can see this in a real order in the Etsy fees guide.
What sales tax doesn’t settle
- Your own income tax. Where you live, you may still owe income tax on your Etsy earnings.
- Customs and import charges. Sales tax, import duty and income tax are three different topics. Etsy collecting sales tax doesn’t mean the buyer owes nothing at the border. See the US postal customs guide.
- Sales outside Etsy. Orders from your own website or other channels are a separate question.
The 1099-K federal threshold
The IRS now states the federal reporting threshold for third-party payment networks as more than $20,000 in gross payments and more than 200 transactions in the same calendar year. Both conditions apply together. This replaces the older $600 figure.
- It’s a reporting threshold, not a tax-free allowance. Not receiving a form doesn’t remove the duty to declare taxable income.
- You can still receive a form below the threshold, for example because of a lower state limit.
- Etsy’s help page shows a January 2026 timeline, but that belongs to tax year 2025, not 2026 sales.
If you sell from Turkey
Etsy says sellers located in Turkey who aren’t paid in USD don’t receive a 1099-K. Listing in USD isn’t the same as being paid in USD. If you have a US company, a US tax status or a USD payment account, your case is different and needs separate advice.
As a non-US seller, Etsy may ask you to complete a tax information form (such as W-8BEN) in your account. Check Etsy’s current instructions for your case. For your Turkish tax position, read the Turkey company and exemption guide.
A simple first step
- Note where your payment account is and in which currency you’re paid.
- Fill in the tax information section of your Etsy account fully and consistently.
- Keep records of your Etsy income by year.
- Ask a tax professional about your own situation before you rely on any threshold.
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Rules, numbers and dates change often. This page reflects the sources below as checked on Nov 9, 2026. Confirm current figures with the official source before you act.