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Avalara Help Center

Should I pay tax on drop shipping?

Overview

I drop shipped to a state and did not charge the customer tax as we do not have nexus there. My drop shipper charged us tax as they are not exempt and they have nexus in Louisiana. Should I have to pay this tax?

Environment

Avatax Returns

Resolution

This question is a business decision and depends on your company. To best get this question answered you have two options we can recommend.

  • Contact the Department of Revenue, and ask them how it should be handled. 
  • Contact your Account Manager, and request Professional Services to assist. 
    • Our Professional Services team has a cost associated with them. Your Account Manager will have more information on this.