Who charges my customer sales tax? Does it happen automatically?

Who is responsible for collecting and remitting sales tax?

As a MOQ1 seller, you are not responsible for collecting or remitting sales tax. MOQ1 automatically calculates and applies sales tax at checkout based on the customer's shipping destination — the customer pays it directly, and no action is required on your part.

Instead, your store earnings are treated as business income:

• Your earnings are independent contractor income: The profit margin built into each product accumulates automatically as your store earnings — no manual calculation or invoicing required.
• Reported via 1099-NEC: We will issue you a 1099-NEC form at the end of the fiscal year if you meet the IRS reporting threshold. Verify the current threshold directly with the IRS or a qualified tax advisor before filing, as this amount has been subject to IRS deferrals and changes and may no longer reflect the current requirement.

The MOQ1 platform is free to use — there are no setup fees, platform fees, or subscription costs. All payment processing and administrative costs are included in the base product price, so your earnings reflect your true margins.

How do you handle tax-exempt organizations (schools, churches, etc.)?

Tax-exempt organizations — such as schools, nonprofits, and churches — can receive a full refund of any sales tax charged at checkout. Note: This refund process applies to orders already placed; MOQ1 does not currently support upfront tax exemption at the time of checkout. To request a refund, follow these steps:

1. Place the order normally: Have the organization complete their purchase through the checkout screen. Sales tax will be applied initially while the payment processes.

2. Submit tax-exempt documentation: Email the organization's official tax-exemption certificate to the email address listed on our Contact page and include the order number in the subject line or email body. Accepted documents typically include a government-issued tax-exemption certificate or IRS determination letter.

3. Await documentation review: Our support team will review your submission and verify the tax-exemption certificate. You do not need to follow up unless you receive a request for additional information from our team.

4. Receive the refund: Once your documentation is approved, the sales tax will be refunded to the original payment method. Refunds are typically processed within a few business days of approval, plus additional time for bank settlement — total turnaround is generally up to 10 business days (see our Refunds policy for current processing times). If your documentation is incomplete or cannot be verified, our support team will contact you with next steps.