US Sales Tax FAQ

TikTok, Inc. ("TikTok") is legally required to calculate, charge, collect, and remit to the relevant taxing authority applicable sales taxes on all sales made through TikTok Shop in jurisdictions that have enacted marketplace facilitator sales tax laws. Prices displayed on the platform do not include applicable sales taxes, which are calculated and charged at the time of checkout. All US states that impose a sales tax have enacted marketplace facilitator laws requiring TikTok to collect sales tax on TikTok Shop transactions.

Sales Tax FAQs

What is sales tax?

Sales tax is a consumption tax imposed by state and local governments on sales of goods and services. Sales tax is a percentage of the purchase price, with the specific sales tax rate varying by location.

Who is responsible for paying the sales tax?

Sales tax is generally borne by the buyer and the seller is responsible for collecting the sales tax from the buyer and remitting it to the applicable taxing authority. A small minority of states impose their equivalent of a sales tax directly upon the seller, but permit the seller to pass the tax through to the buyer (e.g., Hawaii, New Mexico). However, for sales made by sellers through a marketplace, the marketplace facilitator laws deem the marketplace to be responsible for collecting and remitting the sales tax instead.
Therefore, TikTok, as the marketplace facilitator, is required to collect applicable sales tax from buyers on TikTok Shop, report and remit it to the applicable taxing authority in accordance with the marketplace facilitator laws. Please note, sellers on TikTok Shop may still have a reporting obligation, so we recommend you reach out to your tax advisor or accountant to understand your tax obligations.

How is sales tax determined?

Whether sales tax applies and what rate is applicable is based on a variety of factors, such as the nature of the product or service purchased, the location of fulfillment and the shipment or delivery address for the order. Each state has its own rules around which goods and services are taxable and the applicable state and/or local rate that applies to the purchase. State rules further vary with respect to taxability of shipping charges, coupons/discounts and other ancillary items that may be included in your order.

How does sales tax apply to TikTok Shop transactions?

All states that impose a sales tax have enacted laws requiring marketplace facilitators to collect and remit sales tax on taxable products and services sold through their online marketplace. TikTok meets the definition of a marketplace facilitator and is therefore legally required to collect sales tax on products and services sold through the TikTok Shop. Applicable products sold through TikTok Shop and shipped to the following states are subject to sales tax:
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Nebraska
Nevada
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
Washington, D.C.
West Virginia
Wisconsin
Wyoming

How much sales tax will be applied to each transaction?

Each state has different sales tax rates, and many states allow local governments (e.g., counties, municipalities, and cities) to levy their own sales taxes. The tax rate applied to a TikTok Shop order will be the combined state and local rate applicable to the order.

Are shipping and handling fees taxed?

Because each state has different laws when it comes to shipping and handling charges, the taxability of these charges varies by state. TikTok will collect the sales tax on shipping and handling charges to the buyer where applicable.

Can exempt buyers make tax-free purchases?

Currently, TikTok does not support a buyer exemption system where exempt buyers can purchase items tax free on TikTok Shop. We understand that buyers can be exempt for a number of reasons (e.g., resellers, educational institutions, charitable organizations, etc.), and we are working to build the functionality to accept and validate exemption certificates to enable exempt buyers to make tax-free purchases.