As a drop shipping business located in California, if we don’t have the final sale price (retail cost) of your products for orders shipped to a California address, we are required by law to charge tax that is calculated from our Printful price +10%.
For example, we may charge you $10 for a t-shirt that is being sold on your website. The tax rate is 7.5%*; however, we do not have the retail cost you're charging your customer via your website in this scenario. Because of this, we would then calculate the tax from $11 instead of $10 (because 10% of $10 comes to $1). See Regulation 1706.
When we do know your final sale price via your ecommerce platform or if you provide the “retail price” during your checkout process, the appropriate tax rate will be calculated from that price.
Learn more about drop shipping taxes here.
Note that Printful will only charge sales tax on orders shipped to California and North Carolina. You can read more about North Carolina sales tax here.
*At the time of publishing this FAQ, California's sales tax rate ranges from 7.25% to 10.5%. Keep track of the current rate here.