Sales Tax for Online Shopping Lawyers
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Can I Sell Items over the Internet without Charging My Customers a Sales Tax?
Whether you must collect a sales tax for a product you sell to a customer over the Internet primarily depends on two elements:
- The location of the customer
- The physical presence of your business at that location
First, whether a sales tax must be paid on a product is determined not by which state you are selling the product from, but rather what state the buyer resides in. The sales tax rate used is that of the state where customer lives.
Next, whether your business is required to collect sales tax from the customer depends upon the physical presence of your business in the customer's state of residence. If you have a store, warehouse, or any other kind of building used to conduct business in the same state as your customer, you are required to charge the customer for that state's sales tax. However, if your business does not have a physical presence in the state, as may be the case if you are selling products solely over the internet, you are not required to charge your customer for the state's sales tax.
If I Bought a Product over the Internet and Was Not Charged a Sales Tax, Do I Still Have an Obligation to Pay the State for the Tax?
Yes. If you made a purchase on the Internet and avoided paying a sales tax for the product, you are still required to pay the state a "use" tax (same thing as a sales tax except the customer is paying the tax to the state directly instead of the company who they bought the product from).
Though this applies to all consumer goods, most states make a serious effort to collect only on high-price items that require the customer to have a license, such as cars.
If I Have a Problem or Am Confused as to whether I Should be Collecting a Sales Tax for Consumer Goods Sold through My Online Business, Where Can I Seek Help?
Tax laws can be very complex. In addition, cyberspace law is constantly changing and developing. If you need help concerning taxes in setting up your online business, you may want to consult a tax attorney. Your attorney can help you understand current laws about running a business on the Internet and its tax-related implications, as well as give you advice on how to comply with these laws in a business-savvy manner.
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Last Modified: 06-25-2012 03:11 PM PDT
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