Notification of Sales Tax Collection

[John Sabato]

I am not a tax consultant, and don't play one on TV, but I believe that the only time you are required to collect sales tax is if your business has a physical presence in the state where you are shipping... otherwise you only collect sales tax from goods sold to people who live in the same state as you.

Other than that, I can't see that a mechanism exists for a state to go after a business in another state for non-payment of sales tax.

[ithacaartist]

Originally Posted by John Sabato

...I believe that the only time you are required to collect sales tax is if your business has a physical presence in the state where you are shipping...

I'll second that notion. This is how it seems to work on eBay and Amazon. Company websites such as WalMart or Harbor Freight definitely collect sales tax..

[Olle]

Originally Posted by John Sabato

I am not a tax consultant, and don't play one on TV, but I believe that the only time you are required to collect sales tax is if your business has a physical presence in the state where you are shipping... otherwise you only collect sales tax from goods sold to people who live in the same state as you.

Other than that, I can't see that a mechanism exists for a state to go after a business in another state for non-payment of sales tax.

That's the way it has been working for quite a while. There was a big to do about that here in TN several years ago when one of the big players (Amazon, IIRC) moved in and tried to negotiate a no sales tax deal with the state. From what I understand, the new order is to collect sales tax on everything shipped into a state, regardless of where you are located and regardless of presence in that state. I can't for the life of me see how they could enforce that, and I can't figure out how the administration would work either. So for now I don't charge tax on any out of state sales, I'll wait until NYS Dept of Revenue calls.

[lew1]

Originally Posted by John Sabato

I am not a tax consultant, and don't play one on TV, but I believe that the only time you are required to collect sales tax is if your business has a physical presence in the state where you are shipping... otherwise you only collect sales tax from goods sold to people who live in the same state as you.

Other than that, I can't see that a mechanism exists for a state to go after a business in another state for non-payment of sales tax.

The Supreme Court case referred to in this thread authorized the states to require the payment of sale tax on things shipped into the states regardless of physical location of the seller. Of course, the state has to pass a law to this effect.

Personally I have had to provide my Sales Tax number etc to (1) Aim - who sells a lot on line and (2) to the Poulin auction company. If I did not do so, they were going to charge me sales tax - I forget whether it was their state rate or my state rate. Since I have a sales tax number, I documented it with them.

Generally speaking, it will be an interesting to see how they collect it from people in other states.