Do I charge sales tax when I sell wholesale to Target?

Generally no. A sale to Target is a sale for resale, provided you have received and kept Target's resale or exemption certificate, such as North Carolina's Form E-595E, the MTC uniform resale certificate or the SST certificate of exemption. Without one, a state where you have nexus may treat the sale as taxable.

Will Target send me a 1099 as a vendor?

Generally no. The IRS instructions exclude payments for merchandise from Forms 1099-MISC and 1099-NEC, and payments to corporations generally aren't reported. You still report the income, reconciled from your invoices and Target's remittance detail.

Do I remit sales tax on Target Plus orders myself?

No. Target collects and remits as the marketplace facilitator in states with marketplace laws, which now covers all 45 sales-tax states and D.C. You keep item tax codes and nexus settings current. Sales tax on your own site and other wholesale customers is still yours.

Is vendor revenue recognized when I invoice or when Target pays?

Most wholesalers with inventory use the accrual method, recognizing revenue when goods are delivered and title passes under the PO and vendor agreement, regardless of when Target pays. Goods delivered at year-end and paid for the next year generally count in the year of delivery.

Target Vendor vs. Target Plus: Sales Tax and 1099s

Selling at Target starts with one question: are you a seller or a wholesaler? On Target Plus you sell to shoppers, Target collects sales tax as the marketplace facilitator, and payouts over $20,000 and 200 transactions bring a 1099-K. As a Target vendor you sell to Target, collect its resale or exemption certificate instead of tax, generally receive no 1099 for goods, and recognize revenue under your delivery and contract terms. Both routes are subject to income tax; the differences are in how tax is collected, how you reconcile and when revenue counts.

First, are you a seller or a wholesaler?

Target Plus is Target's invite-only third-party marketplace on Target.com. The product page shows the partner as seller and shipper, you set the retail price, Target takes a referral fee, and payouts land in your Stripe account every Tuesday. Legally, the sale is between you and the shopper; Target is the marketplace.

As a Target vendor, Target issues purchase orders, buys your goods outright and resells them in stores or online at prices Target sets. The sale is between you and Target; Target is your customer.

That difference drives the four below.

Difference 1: who collects sales tax?

Target Plus: Target collects and remits

All 45 sales-tax states and D.C. have marketplace facilitator laws requiring marketplaces to collect on their sellers' sales. Target's partner tax-settings material says Target calculates, collects and remits in marketplace facilitator states. Your part is setting item tax codes and updating nexus in the portal.

Vendor: collect a resale certificate, not tax

Your sale to Target is a sale for resale and is generally exempt, provided you have received and kept Target's resale or exemption certificate. Formats vary by state: North Carolina uses Form E-595E, and many states accept the Multistate Tax Commission uniform resale certificate or the Streamlined Sales Tax certificate of exemption. Without one, a state where you have nexus may treat the sale as taxable and assess you on audit.

Drop shipments need a closer look

If a retailer has you ship directly to its customers, it is a three-party sale: you sell to the retailer, the retailer sells to the shopper, and the goods travel from you to the shopper's state. States differ on who collects and which certificate works; some want the retailer registered in that state or a specific form. Confirm each ship-to state's rules before you start.

Difference 2: where do 1099s come from?

Target Plus: payouts settle through Stripe as third-party network transactions. Over $20,000 and more than 200 transactions in a year, you receive a 1099-K (issued by Target or its payment provider; go by what you actually receive). The One, Big, Beautiful Bill restored that threshold retroactively in July 2025; some states use lower ones. The 1099-K shows gross shopper payments, possibly including shipping, before referral fees and refunds.

Vendor: Target is paying for merchandise. The IRS instructions exclude payments for merchandise from Forms 1099-MISC and 1099-NEC, and payments to corporations are generally not reported either. So vendors generally get no 1099 from Target. Vendor setup will still usually ask for a W-9 (a W-8 from a foreign company), and a name/TIN mismatch can bring 24% backup withholding.

No 1099 doesn't mean no income to report. Vendor revenue is reconciled from your own invoices and Target's remittance and deduction detail.

Difference 3: when does revenue count?

Target Plus: revenue arises when the order ships and the shopper pays; refunds reduce it when they occur. Book sales gross, with referral fees, shipping and refunds as separate lines.

Vendor: most wholesalers with inventory use the accrual method, so revenue is recognized when goods are delivered and title passes under the PO and vendor agreement, not when Target pays. Goods delivered to a Target DC in late December and paid for in February generally belong to the earlier year. Allowances and chargebacks Target deducts are booked by nature, as reductions of revenue or as expenses (see the deduction table in our Selling at Target guide).

Difference 4: different state income tax footprints

Target Plus sellers ship their own orders, so inventory in a state's warehouse is physical presence there: state income tax, franchise tax and gross-receipts taxes like Washington B&O are never collected by the marketplace. Once vendor goods reach Target's DC they have been sold to Target and generally are no longer your inventory, though your own warehouses and employees still create obligations where they are.

An example

Example (hypothetical numbers, to show the method): B Inc., a North Carolina C corporation, sold $150,000 on Target Plus in 2026 (shopper payments including shipping), with $6,000 of refunds and an assumed $15,000 of referral fees. The same year it invoiced Target $200,000 on purchase orders; Target deducted an $8,000 allowance and a $2,000 compliance chargeback, and $30,000 for goods delivered December 28 was paid the following February.

Target Plus: B Inc. charges no sales tax because Target collects; it receives a 1099-K near $150,000; its books show sales of $150,000, refunds of $6,000 and referral fees of $15,000.

Vendor: B Inc. has Target's resale certificate and charges no tax; no 1099; 2026 revenue is $200,000 on delivery (including the $30,000 collected the next year), the $8,000 allowance reduces revenue, and the $2,000 chargeback is an expense.

If B Inc. booked vendor revenue only from bank deposits, it would understate 2026 revenue by $30,000 and lose sight of $10,000 in deductions.

Doing both: keep the channels apart

One company selling on Target Plus, supplying Target and running its own site should keep one set of books with separate revenue accounts for Target Plus sales, Target wholesale sales and own-site sales, and separate lines for fees and deductions. The 1099-K then reconciles, wholesale sales line up with resale certificates, and a state auditor gets clean answers. Sales tax on your own site is yours to collect; see our Stripe Tax guide, and for North Carolina rules our NC sales tax guide.

How YCL can help

We have prepared returns for e-commerce sellers for many years. We assess sales tax obligations by channel, register and file where needed, collect and keep resale certificates, keep books by channel, reconcile 1099-Ks and Target remittances line by line, and file federal and state returns each year. We are not a Target partner; vendor contracts are for your attorney to review.

For the full comparison of the two routes, a platform comparison table and an entity-choice table, see our guide: Selling at Target. Start with a free 15-minute consultation or WeChat YCLUSA.