US sales tax: Notice of upcoming changes
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We wanted to let you know about some upcoming changes regarding US sales tax and how they might affect your business. And while tax might not be the most exciting topic, it’s important that we give you all the information you need. But first, an obligatory legal disclaimer:
The following details do not constitute tax, legal or other professional advice and must not be used as such. It is the sole responsibility of all Prodigi clients to comply with all legal and sales tax requirements for issuing sales tax or VAT invoices in respect to your transactions.
Now, let’s talk about tax…
As part of our recent expansion into the US, we’re required to start collecting and remitting US sales tax and have set up a new company to enable us to charge US sales tax on our supply of products to the US. This means that from 4 April 2022, Prodigi will begin charging you US sales tax on all orders being delivered to US addresses, unless you can provide proof of exemption. Please note that our company name will also appear on invoices and statements as ‘Prodigi Global Ltd’ instead of ‘Prodigi UK Ltd’ from this date.
How much US sales tax will I be charged?
Prodigi will charge you based on the value of the items we’re selling to you, and invoices will include the US sales tax rate of each order’s destination state where applicable. We’ve included a complete list of US sales tax rates by state so that you can find out if and how much you’ll be charged.
We’ll be sending out another update later this month with our new bank account details. If you pay by bank transfer (BACS), you’ll need to use these new bank account details for making future payments to us. If you pay by credit or debit card, you don’t need to do anything.
Do I need to register for US sales tax?
If you’re not currently registered for US sales tax, you might want to take legal/accounting advice on whether you should be.
Exemptions for businesses registered for US sales tax
If you’re registered for US sales tax and can provide us with an exemption certificate for each state you’re registered in, you won’t need to pay US sales tax. Exemption certificates can be emailed to email@example.com. You’ll also need to update your online store to start charging US sales tax. This is supported by most major ecommerce platforms such as Shopify, WooCommerce, etc.
Exemptions for marketplace sellers
If you sell through a marketplace that automatically charges US sales tax to the buyer, then we won’t need to charge you US sales tax. We’ll be adding a custom form field to our order process that will enable you to let us know if an order has been sold via a marketplace that meets this criteria. To find out whether the marketplace you sell on charges US sales tax to the buyer, please refer to the marketplace’s terms and conditions.
US price drop
In case you didn’t know, we’re dropping our prices by 10% on all global products made from our in-house facility in the US from 4 April 2022. We’ve also upgraded Express and Overnight shipping for these products from FedEx to UPS, giving you access to improved shipping costs and delivery times.
This discount will automatically apply for both new and existing clients, including clients on bespoke pricing. Any special discounts allocated to your account will be amended to ensure that your pricing isn’t adversely affected by US sales tax charges. If you’d like to find out more about our bespoke pricing plans, get in touch with our sales team today at firstname.lastname@example.org. Alternatively, you can read more about our US price drop.
If you have any questions about this update, please feel free to email them to email@example.com. You can also view our tax FAQs for more information.