Merchant of record explained: who handles sales tax and VAT on course platforms

What a merchant of record actually does

Stripe's explainer defines the merchant of record as the entity legally responsible for processing customer payments, liable for the financial, legal and compliance aspects of each transaction. That includes calculating, collecting and remitting sales tax, VAT or GST to the right authority, handling refunds and chargebacks, and complying with payment rules such as PCI DSS.

A payment processor is different. Stripe says that when a business uses Stripe for ordinary direct transactions, the business remains the merchant of record and Stripe acts as the processor; tax, refund and chargeback obligations stay with the business.

For a course seller the practical question is narrower: when a student in another state or country buys, who works out the tax, who files the return and who answers to the tax authority if it is wrong?

Who calculates, collects and remits on each platform

Based on each platform's tax help article on 30 October 2026. "Remits" means the platform files and pays the tax to the authority.

Reading the platform wording carefully

Teachable's article on the move from teachable:pay to Teachable Payments says Teachable Payments automatically calculates, collects and remits tax on your behalf in the same markets as before. It does not use the phrase merchant of record, so if your accountant needs that status confirmed, ask Teachable for it in writing.

Thinkific's TCommerce article splits the world in two. For US and Canadian buyers, Thinkific calculates, collects and remits sales tax and files it under its own tax identification number. For UK, EU and Swiss buyers, VAT is calculated only where you have entered a registration, the collected VAT is paid out to you, and you remit it. The article adds that VAT calculation is off by default and that you remain responsible for deciding whether you have tax obligations in the UK, the EU and Switzerland.

Kajabi's sales tax overview says plainly that it does not file or remit on your behalf and that you are responsible for filing and remitting the tax it collects. Podia's article says the same: it collects tax at checkout for jurisdictions where you are registered and does not file or remit for you.

Worked example: what the fee and the paperwork look like

Take a $100 course sold through Thinkific to a buyer in a US state where, for this example, tax works out at $8. The buyer pays $108. The TCommerce fee is 0.5 percent of the total the student pays including tax, so $0.54, and Thinkific remits the $8. Thinkific also says the fee is not refunded if you refund the student. The $8 rate is an assumption for illustration; actual rates depend on the buyer's location and the product category.

Sell the same course on Kajabi or Podia and the checkout also adds the tax, but the $8 lands in your payout and you must file a return with that state, which means registering there first. Across many states, the filing work, not the calculation, is the real cost.

For an EU business selling to consumers in other EU countries, the EU's Your Europe guidance says electronic services are always taxed in the customer's country, although below a EUR 10,000 threshold of EU cross-border sales they can instead be taxed where the seller is established, and the One Stop Shop lets you register in one EU country to declare and pay that VAT. Podia supports this by letting you add a "European Union - VAT OSS/IOSS" jurisdiction; you still file the OSS return.

Self-hosted WordPress: you are the merchant of record

When you sell from your own WordPress site with Stripe as the processor, Stripe's merchant-of-record explainer is explicit that the business stays the merchant of record. Nothing calculates tax unless you set it up.

Stripe Tax is one way to cover part of the gap. Stripe's documentation says it calculates sales tax, VAT and GST, monitors your sales against registration thresholds, helps manage registrations, and supports filings directly or through integrated partners. It is a paid add-on with pay-as-you-go or subscription pricing. Calculation and threshold alerts reduce errors; they do not make Stripe the merchant of record.

Moving from a platform that remits to self-hosting therefore adds a recurring compliance job. Budget for it alongside hosting when you compare total cost.

Questions to settle before you pick or leave a platform

• Ask the platform in writing whether it acts as merchant of record and for which countries.
• Check what the tax feature depends on: Thinkific's sales tax solution applies to sales made through TCommerce powered by Thinkific Payments.
• List where your buyers live today and whether you are registered there.
• Find out who tracks registration thresholds; Kajabi and Podia leave that decision to you, while Stripe Tax offers threshold monitoring for self-hosted sellers.
• Confirm the fee: Thinkific charges 0.5 percent on every non-zero sale where tax is assessed, including tax, and does not refund it when you refund a student.
• If you plan to self-host, decide who will file returns before launch, not after the first quarter.

Sources & verification

Product details and prices can change. Check the linked provider before buying.

1. Stripe: merchant of record explained Accessed 30 Oct 2026
2. Stripe Tax documentation Accessed 30 Oct 2026
3. Teachable: from teachable:pay to Teachable Payments, what's changing Accessed 30 Oct 2026
4. Thinkific: TCommerce sales tax and VAT solution Accessed 30 Oct 2026
5. Kajabi: Kajabi Payments sales tax overview Accessed 30 Oct 2026
6. Podia: collecting sales taxes on Podia Accessed 30 Oct 2026
7. Your Europe: cross-border VAT Accessed 30 Oct 2026