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Q.Do I need to collect Internet Sales Tax?

A.The obligation to collect and pay sales tax is determined by the location of the buyer, not the seller. If a business operating the internet site does not have a physical presence in the state where the buyer resides, such as a store or warehouse, it is not required to collect sales tax for sales from customers in that state. In other words, if the buyer is in California and the business does NOT maintain a physical presence in California, then the business is not required to collect sales tax from the California buyer. So how do big companies like Amazon and Barns and Noble escape collecting sales tax? Many large companies created separate legal entities (corporations or limited liability companies) to own and operate their Internet business.

Copyright 1999-2023 Melissa C. Marsh. All Rights Reserved. All Information on this website is subject to a Disclaimer and Use Agreement. This information is provided as general information only and should not be construed as legal advice. We advise you to seek the advice of competent legal counsel to address your own specific questions, facts and circumstances.