Depop sales tax is a hot topic for every seller on this popular resale platform, especially as tax laws and marketplace rules continue to evolve in the US, UK, and EU. If you’re wondering whether you need to collect sales tax on Depop, how Depop handles tax for buyers, or what your responsibilities are as a seller, you’re not alone. The good news is that Depop sales tax is mostly automated: Depop calculates, collects, and remits US state sales tax for you, so you don’t have to manually add tax to your listings or worry about compliance with dozens of state laws. For UK and EU sellers, new reporting rules mean Depop will collect and share your sales data with tax authorities if you exceed certain thresholds, but the platform still handles most of the heavy lifting when it comes to tax collection and reporting. Whether you’re a casual seller clearing out your closet or running a full-time Depop shop, understanding Depop sales tax, marketplace facilitator laws, and income tax obligations is key to staying on the right side of the law—and keeping your business running smoothly.
What Is Depop Sales Tax?
Depop sales tax refers to the taxes that may be applied to items sold on Depop, based on the buyer’s location and local tax laws. In the US, this typically means state and local sales tax. In the UK and EU, it may involve VAT or other reporting requirements. Depop, as a marketplace facilitator, is responsible for calculating, collecting, and remitting these taxes for most transactions.
How Does Depop Handle Sales Tax in the US?
- Depop automatically calculates, collects, and remits US sales tax on behalf of sellers for orders shipped to states where marketplace facilitator laws apply.
- The appropriate sales tax is added to the buyer’s total at checkout, based on their shipping address.
- Sellers do not need to set up, collect, or remit sales tax themselves for these states.
- This applies to all sellers, regardless of where they are located—even if you’re outside the US but selling to a US buyer.
- Depop includes the sales tax in the total transaction amount, and the payment processing fee is calculated on the full amount (including tax).
- No action is required from sellers regarding sales tax collection or remittance for eligible states.
States Covered:
As of 2025, nearly all US states with sales tax are covered, including California, Texas, New York, Florida, Illinois, and many more. Missouri was added in 2023, and Depop keeps an updated list on their help pages.
What About Depop Sales Tax in the UK and EU?
- UK: Starting January 2024, Depop must collect and report seller information and sales data to HMRC if you sell over €2,000 (about £1,700) or more than 30 items in a calendar year.
- EU: Under the DAC7 directive, Depop reports sales data to EU tax authorities for sellers who exceed €2,000 in sales or 30 items in a year.
- Depop will request additional information (name, address, tax ID, etc.) from sellers who meet these thresholds.
- This is primarily for tax reporting purposes—VAT collection depends on the nature of your sales and local laws.
Key Point:
These rules don’t create new taxes, but they do increase transparency—tax authorities will know about your sales and may expect you to report income if you cross the thresholds.
Do You Have to Pay Taxes on Depop Sales?
- Sales Tax: Depop handles this for you in the US; buyers pay it at checkout.
- Income Tax: You are responsible for reporting and paying income tax on your profits from Depop sales, whether you’re a hobby seller or running a business.
- If you earn more than $400 in profit in a year, you should report it on your tax return.
- Full-time sellers may also owe self-employment tax and should use Schedule C and possibly 1099-K forms.
- “Virtual Garage Sales”: If you’re just selling personal items at a loss, you typically don’t owe income tax.
How Depop Sales Tax Affects Your Selling Experience
- No need to manually add tax to your listings—Depop does it for you.
- International sales: If you sell to buyers outside your country, sales tax (or VAT) may be applied based on the buyer’s location, but Depop typically handles this.
- Bundling: Sales tax is calculated at checkout, so bundle prices are pre-tax.
- Processing fees: Payment processing fees are calculated on the total sale amount, including sales tax.
What Information Does Depop Collect for Tax Purposes?
- For individuals: Name, date of birth, address, Tax Identification Number, country of issuance.
- For businesses: Legal/shop name, business address, tax ID, business registration number.
- Depop may request this info if you approach or exceed reporting thresholds.
FAQs
Q: Do I need to collect sales tax on my Depop sales?
A: No, Depop automatically collects and remits sales tax for you on eligible orders.
Q: Does Depop sales tax affect my income tax?
A: No, sales tax is separate. You are still responsible for reporting and paying income tax on your profits.
Q: What happens if I sell more than €2,000 or 30 items in the UK or EU?
A: Depop will collect additional information and report your sales to tax authorities, but you may not owe new taxes unless required by local law.
Q: Do I need to do anything extra for sales tax if I sell internationally?
A: No, Depop handles sales tax or VAT collection based on the buyer’s location.
Final Tip:
Keep good records of your sales and expenses, respond promptly if Depop requests tax information, and consult a tax professional if you’re unsure about your obligations. Happy selling!