The Tax Man Cometh
How to Assess Sales Tax Obligations in Ecommerce
The first reality to absorb is this: if you sell merchandise over the Internet and you have a physical presence in a “nexus,” or state, you are required to follow that jurisdiction’s sales tax laws – but only from customers who are subject to sales tax because of their residence in that state. Sounds pretty simple until you understand that there are 50 states to keep track of. Add to that the wonky official rule that if customers do not remit sales tax payments to sellers, they are technically required to pay them directly to their state. Don’t ask how that enforcement mechanism would work; truly, it’s anyone’s guess. Mostly only very high-end purchases would come to the attention of each state’s tax collector.
We’ll make it easy for you. Only five U.S. states do not impose a sales tax. They are Alaska, Oregon, Montana, Delaware, and New Hampshire. Now you know.
But what is your obligation in terms of making sure your customers pay up? That’s more confusing.
If you’re committed to avoiding future problems and doing the right thing at the outset, here are steps to take that will keep you in the clear:
Photo by Kelly Sikkema on Unsplash
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