Sales Tax & Marketplace Facilitator

Hearthmade LLC operates Hearth as a California marketplace facilitator on qualifying sales completed through Hearth checkout. This page explains what Hearth collects, what Artisans still owe, and how tax appears at checkout.

This page supplements the Terms of Service (/terms), Seller Addendum (/seller-terms), and County Disclosures (/county-disclosures). It is not tax or legal advice.

Hearthmade LLC is preparing California marketplace facilitator registration with CDTFA before live sales tax collection on Hearth. Checkout tax collection stays off until that registration is on file.

Once registration is complete, Hearth will collect and remit California sales tax on qualifying marketplace sales through Stripe Tax at checkout. On qualifying marketplace sales, California sales and use tax is calculated at checkout through Stripe Tax on the Platform account. Hearth collects sales tax at checkout on the Platform account. Only your listed shelf price transfers to your Stripe Connect account; collected tax is not part of your payout. Collected tax is remitted to the California Department of Tax and Fee Administration (CDTFA) on the filing schedule Hearth maintains. Hearth does not charge Artisans a separate fee for sales tax calculation, collection, or remittance.

Stripe Tax applies the combined state, county, city, and district rates for the Neighbor's California pickup location where applicable. A single sales tax line at checkout may include local and district components.

Hearth's marketplace facilitator role applies only to sales completed through Hearth checkout. It does not cover cash, Venmo, Zelle, invoices, farm-stand sales, or any other transaction completed outside the Platform.

Hearthmade LLC uses Stripe, a licensed payment processor, to handle payments between neighbors and sellers. When a neighbor pays for an order, Stripe processes the charge under Stripe's own licenses and regulatory registrations.

Hearth directs Stripe on how to divide each payment: the seller's listed shelf proceeds transfer to the seller's connected Stripe account, and Hearth retains the Service fee and any collected sales tax on Hearth's Stripe platform account. Hearth does not hold neighbor payments in a separate Hearth bank account or wallet outside that Stripe flow.

For California sales tax on qualifying checkout sales, Hearth is the marketplace facilitator responsible for collecting and remitting that tax. Card payout timing, identity verification, and chargebacks follow Stripe's Connected Account Agreement.

Tax rates depend on the Neighbor's California pickup location (destination basis), not the Artisan's studio address. At checkout, Hearth creates a Stripe Customer with the studio's registered kitchen as the shipping address so Stripe Tax sources on the pickup situs (not the buyer billing address).

At checkout, Stripe Tax product codes come from each listing's offering kind (for example MEHKO meal, cottage shelf-stable food, raw produce, or studio craft). Your studio shelf classification supports compliance records, permit tracking, and attestation. You remain responsible for accurate offering kinds and listings.

Taxable items commonly include prepared home-cooked meals (including MEHKO offerings) and many handmade studio goods. Whole, uncut fruits and vegetables sold by qualifying backyard growers and certain cottage-food items may be exempt or treated differently under California law.

Artisans cannot opt out of Hearth's checkout tax collection on qualifying platform sales. Hearth does not offer a manual tax override at checkout for facilitated sales.

If you believe a listing was taxed incorrectly, contact hello@hearthmade.app with your order number. Miscategorized listings remain the Artisan's responsibility, as described in the Seller Addendum.

California law generally requires anyone selling taxable goods to hold a California Seller's Permit before their first sale. However, under California's Marketplace Facilitator Act, once Hearth is registered with the California Department of Tax and Fee Administration as a marketplace facilitator, sellers whose entire retail sales of taxable goods are made exclusively through Hearth may not be independently required to hold their own Seller's Permit for those Hearth-facilitated sales.

This exemption does not apply until Hearth's own marketplace facilitator registration is active. You should not assume this exemption is currently in effect. It also does not cover any sale you make outside of Hearth, including farmers markets, cash sales, or your own website.

If you sell anywhere besides Hearth, you are responsible for your own Seller's Permit and tax filings for those sales, on ordinary California timing (generally before your first such sale). Hearth still asks all taxable-goods sellers to keep a CDTFA Seller's Permit number on file, both for sellers who sell in multiple channels and so our records are ready if a tax authority or your own counsel ever asks.

This is independent of your federal and state income tax obligations, which apply regardless of your sales tax registration status.

If you also sell through other channels and meet California economic nexus thresholds, you may need to register with CDTFA and file returns for those direct sales even when Hearth remits tax on Hearth checkout orders.

If you hold a CDTFA Seller's Permit, California may still require you to file periodic returns (including zero-dollar informational returns) even though Hearth remits tax on platform checkout sales. Consult your tax advisor.

At checkout, Stripe Tax product codes come from each listing's offering kind (for example MEHKO meal, cottage shelf-stable food, raw produce, or studio craft). Your studio shelf classification supports compliance records, permit tracking, and attestation. You remain responsible for accurate offering kinds and listings.

Your studio shelf choice records whether you sell taxable studio goods (CDTFA Seller's Permit path) or attest tax-exempt groceries. That choice supports compliance; checkout tax codes still come from each listing's offering kind.

You are solely responsible for accurate offering kinds and shelf classification. If you list a taxable meal or studio good with the wrong offering kind, or misdescribe an item, you remain liable for the correct tax treatment.

You agree to indemnify Hearth for losses, penalties, interest, or audit costs arising from your miscategorized listings or inaccurate tax attestations, as stated in the Seller Addendum.

When an order is fully refunded, collected sales tax is reversed and Hearth adjusts its remittance records accordingly.

When an order is partially refunded, sales tax is reversed in proportion to the refunded amount.

On a full refund caused by an Artisan cancellation, a Hearth cancellation, fraud, or a Platform error, the Service fee is refunded with the rest of the checkout total. See the Terms of Service for voluntary buyer cancellations.

The buyer-paid Service fee is six percent of the listed shelf price, included in the item price, plus fifty cents on the order. For taxable items, sales tax is calculated on that all-in amount. Exempt food items are not taxed on their portion. Sales tax is its own line at checkout.

Artisans generally receive their listed shelf price; card processing and payout timing are described in the Seller Addendum.

Hearth provides a seller tax summary CSV export from studio insights. It shows gross shelf revenue, sales tax collected at checkout through Stripe Tax, Service fees, and net payout for your records. Card processing on these checkouts is paid by Hearth and is not deducted from that payout.

The CSV is a record-keeping helper, not a tax return. Hearth remits collected tax to CDTFA as the marketplace facilitator on qualifying platform sales.

Keep your own books for income tax, off-platform sales, and any direct filing obligations your advisor recommends.

Hearthmade LLC will provide written marketplace facilitator confirmation to Artisans once California registration is complete. Until then, checkout tax collection stays off.

Once registration is complete, Artisans may save or print this page together with the Terms of Service and Seller Addendum as written confirmation for their records.

After Hearth completes marketplace facilitator registration, you may verify our CDTFA account on the public lookup tool at https://cdtfa.ca.gov/services/verify-permit.htm.

When you buy through Hearth checkout, applicable California sales tax (if any) is calculated and shown as its own line before you pay. Item prices already include the 6% Service fee; checkout adds a $0.50 Service fee once per order. You pay the total shown at checkout, including any tax.

Tax lines depend on the seller's shelf classification, listing type, and your pickup location in California.

Hearth's marketplace facilitator program currently covers California sales tax on qualifying platform checkout. If Hearth registers as a marketplace facilitator in additional states, we will update this page, the Terms, and seller notices before collecting tax in those jurisdictions.

Sales tax questions: hello@hearthmade.app

Income tax, off-platform sales, and permit questions: consult your tax advisor or CDTFA.