Applying Sales Tax FAQ – Venmo

Venmo business profiles can create sales tax rates and apply them to payment requests sent to customers. Read on for details about setting up sales tax on Venmo and how it works.

How can I set up sales tax for my Venmo business profile?

You can set up sales tax for payment requests sent from your business profile in the Venmo app.

Follow these steps to get started:

Tap the Settings gear from your Profile tab
Tap Sales Tax
Tap Create a tax
Enter a name for your tax, keeping in mind that customers will see this tax name on their receipt
Enter a percentage for your tax rate (<25%)
Choose whether to apply the tax to all charges
Tap Save

Sales tax rates for your business profile can only be applied to payment requests you initiate. If you want to automatically apply a tax rate to each payment request you initiate, you can select Apply to all charges when creating or editing that tax rate.

For each request you initiate, you can still edit which tax rates are used by selecting additional taxes or disabling any that don’t apply.

Please note that it’s not possible to include sales tax for payments sent directly to your business profile by another Venmo user. Use of this feature requires that you initiate a charge request from your business profile.

All of the tax rates you save can be viewed on the Sales Tax page in your Venmo app. From here, you can edit or remove saved taxes by tapping the pencil icon.

Please note, you can save a maximum of five (5) individual tax rates. If you wish to create additional taxes, you’ll need to edit or delete an existing one.

How much sales tax should I include on purchases?

While we allow you to create and apply taxes to your charges, Venmo is not responsible for making sure you comply with applicable tax requirements. As such, it is your responsibility to make sure you’re collecting the right amount of tax for your transactions, and you can work with a tax expert or contact your state’s Department of Revenue if you’re unsure what to do.

The IRS website also offers resources regarding taxes and doing business in each state, which may be helpful: https://www.irs.gov/businesses/small-businesses-self-employed/state-government-websites

Venmo does not collect or remit sales or other taxes on your behalf. If you choose to use this tax feature, it is your responsibility to determine the appropriate tax to apply to your sales and to remit those taxes to the appropriate tax authorities. Failure to do so may subject you to fines and other criminal actions.

This information is not intended to be and should not be construed as tax advice.

Why should I set up sales tax?

By setting up sales tax for your Venmo business profile, you’ll make less work for yourself when it’s time to prepare your taxes.

Taxes that you set up on Venmo can be applied to payment requests you send to your customers.

You’ll see the total dollar amount of the taxes you collect when viewing your statements on the Venmo website. You also have easy access to see how much sales tax you’ve collected year-to-date or in a specific month.

Learn more about accessing and downloading statements on Venmo.

What should I name my tax rates?

Names for your tax rates are entirely up to you. To start, you can name your taxes by purpose or location, like, “TX State Sales Tax” or something similar. It’s best to create descriptive names so it’s clear what purpose each tax rate serves.

Designating a unique name for each of your tax rates can help you stay organized. This also provides some context for your customers, so they’ll know why a tax is being added to their purchase. Keep in mind that the name of your tax rate will be included in the payment details and confirmation emails sent to your customers.

How many taxes can I set up?

You can set up a maximum of five (5) tax rates for your business profile. To see how many taxes you have set up, or to make changes to your saved tax rates, tap Sales Tax from your business profile’s Settings menu.

How do I edit or delete a tax rate?

Follow these steps in the Venmo app to make changes to the tax rates you’ve saved:

Tap the Settings gear from your Profile tab
Tap Sales Tax
Tap the pencil icon next to the tax rate you want to edit or delete
Make your desired changes and tap Save OR tap Delete

You’ll see a success notification at the top of your screen once your updates are saved.

It’s also worth noting that you can edit which tax rates are applied whenever you send a payment request. To do so, tap Edit tax before completing your payment request. On the next screen, you can choose to apply or remove any of your saved tax rates, mark the payment request as tax-exempt (no taxes will be applied in this case) or create another tax if needed.

What does it mean to “Apply to all charges”?

You can check the “Apply to all charges” box to apply a tax rate to all future charge requests you initiate from your business profile. This makes it easier to apply standard rates like state sales tax when you send a payment request to a customer.

For each request you initiate, you can still edit which tax rates are used by selecting additional taxes or disabling any that don’t apply. To do so, tap Edit tax and toggle the tax off before completing your payment request.

Please note that it’s not possible to include sales tax for payments sent directly to your business profile by another Venmo user. Use of this feature requires that you initiate a charge request from your business profile.

How do I know whether a purchase should be tax-exempt?

Tax-exempt purchases are not subject to tax at the federal, state, or local level. There are specific criteria that determine whether a purchase is tax-exempt, but Venmo is not able to advise you on making this determination.

This information is not intended to be and should not be construed as tax advice.

Can I apply sales tax to payments I’ve already received?

At this time, it is not possible to retroactively apply sales tax to payments you’ve already received or payment requests you’ve already sent on Venmo.

How can I see the total amount of taxes I’ve collected?

You can view the total sales tax you’ve collected when accessing your statements on the Venmo website. To access your statements:

Sign in to your account at venmo.com
Click Settings, then Statements from the sidebar or visit https://account.venmo.com/statement
Click the profile selector dropdown at the top of the page and select your business profile

In the next section, you should see “Sales tax collected,” which shows the total sales tax you’ve collected in the specified period and Year-to-date. You can also download this information in a CSV format by clicking the download button. To adjust the period, select a different month at the top of the page.