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Sales Tax FAQ
Helen Rankin avatar
Written by Helen Rankin
Updated over a week ago

1. How is sales tax calculated?

Sales tax is charged for orders shipped within the United States, and where we have determined sales tax applies. The amount of sales tax appearing on your quotes is an estimate and may differ slightly from what is ultimately charged. Taxes are calculated based on the order amount before any discounts are applied.

The amount of state sales tax is based on current rates and regulations, so it depends on the contents of your order and how it is processed. If your order is processed through SwagUp’s assembly and storage facilities, taxes will be calculated based on SwagUp’s facility location (currently New Jersey). If your order is shipped directly to a destination (ie, does not pass through SwagUp facilities), then the amount of taxes will be based on the destination location. State and local tax rates are subject to change at any time.

Because sales tax regulations vary by state, you may find that only parts (or in some cases, none) of your order is taxed.

Example 1:

If you order a swag pack, items in your pack will be first shipped to our facilities in New Jersey to be packed. Because the state of New Jersey does not collect sales tax for clothing items, if your swag pack order contains clothing and other items, the clothing portion of your order will not be taxed, but other items will be subject to New Jersey sales tax.

Example 2:

If you are ordering swag that is directly drop-shipped to you, and not processed at a SwagUp facility, the amount of tax assessed will depend on where the order is being shipped. For example, if you place a drop-ship order for T-shirt swag shipped to a California address (and not to SwagUp facilities in NJ), you will be charged California sales tax for that order.

1.a. Why am I being charged New Jersey sales tax when I’m in a different state?

If you are ordering swag packs, the various items in your order are first sent from suppliers to SwagUp’s facilities in New Jersey for quality assurance, assembly, storage, and shipping. Because the items are received in New Jersey by SwagUp on your behalf, the transfer of title occurs in New Jersey. Therefore, your order is subject to New Jersey state tax rules.

If your order does not pass through SwagUp’s facilities and is shipped directly from a supplier to you (as is the case for drop-ship), you will be assessed tax based on the shipping address.

1.b. Why is the estimated tax for my order very different than I expected?

Because sales tax is assessed based on state regulations, your order may be subject to tax rules that you may not be familiar with. This is most likely due to the fact that New Jersey sales tax rules are being applied to the contents of your order, if your order is a pack that is being assembled by SwagUp in New Jersey facilities.

2. Why is sales tax appearing on my invoices now?

Our goal is to ensure our clients are invoiced correctly and in a timely manner. SwagUp is currently upgrading our quoting and invoicing systems, and as part of these upgrades, estimated and actual sales tax will be displayed on future quotes, invoices, and other billing-related communications. Please note that these changes are to provide additional comfort and visibility into our billing, and these changes will not affect any of your prior invoices.

3. What if my organization is tax-exempt?

In order for you to receive an exemption on sales tax, you must do two things:

  1. Receive state-specific approval of sales tax exemption.

  2. Once you have received that state-specific approval, submit the approval to SwagUp through this form.

For Swag Packs:

  • In order for you to receive a tax exemption on your swag pack order, you must complete a NJ-specific tax exemption form (ST-5 Certification of Exemption) and submit it to the State of NJ Division of Taxation. Once you have received the approval, please send it to SwagUp through this form. For why a New Jersey approval is needed, please see the answer to “Why am I being charged New Jersey sales tax when I’m in a different state?”

For Drop-Ship:

  • For drop-ship orders to states other than New Jersey, you will need to provide SwagUp with an exemption certificate for the destination state. Please follow the process for your respective state, and once you have received tax exemption approval, please use this form to submit your state approval of 501c3 status.

3.a. If my organization is tax exempt, do I need to wait until I have all my exemption documentation?

You can still complete your order while working on getting your tax exemption documentation together. Once SwagUp has received your approval, we will apply tax exemptions to past and future orders going forward, and refund any taxes that we collected between your 501c3 effective date and the date we received your state sales tax exemption approval.

4. Where do I go with questions about sales tax?

Please feel free to contact our customer care department via Chat!

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