Do I charge sales tax when I supply Wayfair?

Usually not. A supplier's sale to Wayfair is a sale for resale, and Wayfair collects sales tax from the customer. In states where you are registered or have nexus, keep a valid resale certificate from Wayfair; without one, an auditor can treat the sale as taxable and assess you.

If my goods sit in a CastleGate warehouse, do I register in that state?

Usually you need to check. Inventory in a state gives you physical presence there regardless of sales volume, and many states expect sellers with physical presence to register and report sales to Wayfair as exempt resales. Each state's rules decide.

Will Wayfair send me a 1099-K or 1099-NEC?

Generally not. Wayfair is the buyer paying for merchandise, not a platform settling customer payments for you, and the IRS 1099-MISC and 1099-NEC instructions treat payments for merchandise as not reportable. Go by whatever Wayfair actually sends, and report all of the income either way.

Wayfair pays less than my invoices. Which amount is revenue?

Record revenue at the gross amount invoiced to Wayfair. Then reduce sales for the damage allowance and returns, and book advertising, platform fees and CastleGate charges as expenses. Booking only the deposits misstates both revenue and expenses.

Wayfair Suppliers: Sales Tax, Resale Certificates and 1099s

The biggest difference between Wayfair and Amazon, Walmart or TikTok Shop is that you don't sell to the consumer; you sell to Wayfair. A sale to Wayfair is a sale for resale, so you usually collect no retail sales tax, but in states where you are registered or have nexus you need Wayfair's resale certificate on file. Wayfair pays its own purchase invoices, so it generally doesn't send suppliers a 1099-K or 1099-NEC, and your revenue rests entirely on your own books.

Why Wayfair isn't a marketplace

On Amazon, Walmart and TikTok Shop, third-party sellers sell directly to consumers. The platform acts as a marketplace facilitator: it collects and remits sales tax, takes a commission and reports the seller's gross receipts on Form 1099-K.

Wayfair works differently. According to its supplier site (sell.wayfair.com), suppliers set a base cost for each product, which is the price they charge Wayfair; Wayfair sets the retail price and takes the customer's payment. When a customer orders, Wayfair sends you a purchase order, you ship and invoice, and under the supplier agreement Wayfair pays undisputed invoices within 60 days of receipt. As of November 2026, neither Wayfair's supplier site, its supplier agreement updated November 14, 2025, nor its 2025 annual report describes a marketplace where third parties set their own prices.

A bit of history: South Dakota v. Wayfair, the 2018 Supreme Court case that let states tax remote sellers, was this Wayfair. Today it collects sales tax from customers as the retailer in the states that have one.

Do you charge sales tax on sales to Wayfair?

Usually not, but the exemption needs paperwork. Sales tax falls on final consumption. You sell to Wayfair, Wayfair sells to the customer, and your link in the chain is a wholesale sale for resale. The general rule across states: if the seller holds a valid resale or exemption certificate from the buyer, the sale is exempt; without one, an auditor can treat the sale as a taxable retail sale and assess the seller.

Getting and keeping the certificate. Ask Wayfair for its resale certificate for each relevant state, or a multistate exemption certificate, and file it by state. North Carolina uses Form E-595E; some states reject the multistate form and require their own. Get the certificate at or before the sale, with the buyer's name, address and state registration number complete.

Where a drop-ship sale is sourced. Generally where the goods are delivered. If you ship from a North Carolina warehouse straight to a California customer, your sale to Wayfair is usually a California sale. So it isn't only the state your warehouse is in that matters, but also the states you ship into.

Which states may still require registration?

States holding your inventory. Inventory in a state gives you physical presence there, whatever your sales volume. Your own warehouse, a contracted 3PL and Wayfair's CastleGate warehouses all count. States where you have physical presence usually expect you to register, and your returns then report the sales to Wayfair as exempt sales for resale.

States where you cross an economic nexus threshold. Most states use $100,000 a year for remote sellers. Some measure gross sales, so exempt wholesale sales count toward the threshold; others count only retail sales. As your Wayfair volume grows, you can cross thresholds in states where you hold no inventory, so check each state's rule.

Other channels. If the same company also sells on Amazon or Walmart, those platforms collect on platform orders; on your own website, you collect. Total sales across channels are what you measure against thresholds.

Samples and own use. Samples sent to Wayfair for photography, trade show displays and goods you use yourself can owe use tax in some states.

Does Wayfair issue a 1099-K?

Generally not. A Form 1099-K is issued by a payment settlement entity or third-party settlement organization when it settles customer payments on behalf of a payee. Wayfair is the buyer paying its own purchase invoices, not a platform settling customer payments for you. The IRS instructions for Forms 1099-MISC and 1099-NEC (revised December 2026) also list payments for merchandise, freight and storage as not reportable. So Wayfair suppliers generally receive no platform 1099. Go by whatever Wayfair actually sends.

For comparison, third-party sellers on Walmart, Amazon, Etsy and TikTok Shop get a 1099-K once they pass $20,000 and 200 transactions in a year.

No 1099 doesn't mean no income. Wayfair's payments are business income and every dollar is reported. With no third-party form to match against, errors in your books are also harder to catch.

Bookkeeping that holds up

Wayfair pays net. The 5% damage and defect allowance (Wayfair's published policy deducts it from each product's wholesale cost), advertising, CastleGate fees, returns, replacement parts and the monthly platform fee can all be set off against what Wayfair owes you. In the books:

Record revenue at gross invoice amounts. Your invoices to Wayfair drive revenue, not the deposits.

Classify each deduction. The allowance reduces sales; ads and platform fees are expenses; returns reduce sales and the goods go back into inventory; replacement parts are cost.

Reconcile monthly. The supplier agreement asks for a statement of open balances within 30 days after each year ends, and adjustments Wayfair proposes become final if you don't dispute them within 30 days. Match Wayfair's remittance and deduction details to your invoices every month.

Tie sales tax returns to the books. Gross sales and resale exemptions on your sales tax returns should match the Wayfair revenue in your books; auditors compare income tax and sales tax figures.

Common mistakes

Assuming every sale is exempt and registering nowhere. If you skip registration in an inventory or threshold state, any tax, penalty and interest later assessed comes out of your pocket, because you never collected it from Wayfair.

Reporting deposits as revenue. Revenue and expenses both come out understated; profit may look similar, but margins, inventory turns and sales tax returns won't reconcile.

No certificate on file. Certificates should exist at the time of sale; some states won't accept one gathered only after an audit starts.

For the full picture of supplying Wayfair, including the order flow, onboarding checklist, platform comparison and structures for Chinese factories, see the Wayfair supplier guide; North Carolina sales tax rules are in the North Carolina sales tax guide. If you're not sure which states you need to register in, book a free 15-minute call or add WeChat YCLUSA.