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sales tax? 1

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GUJUm0deL

GUJUm0deL

Programmer
Jan 16, 2001
3,676
US
This might be a odd question, but suppose you have an online store based in NYC (the physical location where the products are and where they will be shipped from is also NYC), and a customer living in Californis purchases a product, what state's sales tax would be customer be charged? Is (s)he charged NY or CA sales tax?

Thanks!

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Just Imagine.
 
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If you have no physical presence of a branch retail outlet in a state, I believe you charge no sales tax for sales made to people in that state. In all states that I know of, the person purchasing the item is required by state law to declare items purchased out of state and pay the equivalent state sales tax when filing state income tax forms each year.

There's been quite a debate about this, and forcing ecommerce companies to charge the correct sales taxes for each state, county, and municipality (some cities and counties have additional sales taxes) in the U.S. would be a nightmare.

Lee
 
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Hi Lee, hmmm so does that mean my client cannot charge sales tax on his products? I advised him to ask his tax attorney or consultant about this, but he keeps insisting that the site charge NY sales tax.

I don't want to cause him any legal issues down the road, so I took it upon myself to do a some snooping.

Thanks!

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Just Imagine.
 
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Thanks for the link Lee. I readt he first one and from the example it seems that my client cannot charge any sales tax outside of NY. Although I know he's very persistant on charging NY sales tax no matter where the customer might live.



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Just Imagine.
 
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nolo.com is a well-respected site for legal answers, usually in plain English. Other sites in the Google search provide the same information.

Your friend can charge tax on non-New York sales if they want, but it's not legal.

Lee
 
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My question was more on a national level. Like what sales tax to charge (if any) if someone living in California or Florida purchases anything off the website.

Sites like iTunes.com and others have a loophole they can take advantage off because those are either big corporate sites or subsidiaries of big corporates sites. Like if you buy something off of barnesnnobles.com you might pay tax because bn might have a store in the same state you live in.

From what I've read websites can charge tax IF the they have actual store locations in the state. So, if my client had a store in CA or FL then he can charge sales tax there, if not he's not supposed to.

In any case, I told him this and its his decision on what he wants to do. I delivered the site to him and he has the ability to either charge or not from the admin section.

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Just Imagine.
 
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GUJUm0deL said:
Sites like iTunes.com and others have a loophole they can take advantage off because those are either big corporate sites or subsidiaries of big corporates sites. Like if you buy something off of barnesnnobles.com you might pay tax because bn might have a store in the same state you live in.
Click to expand...

It's hardly using it to their advantage if they need to charge their customers more for the same service and they still receive the same amount.

GUJUm0deL said:
From what I've read websites can charge tax IF the they have actual store locations in the state. So, if my client had a store in CA or FL then he can charge sales tax there, if not he's not supposed to.
Click to expand...

As far as I know (which admittedly isn't much) they need to charge sales tax if the company has a physical presence in that specific state.

From what I am reading here it seems that you are implying your client wants to just charge sales tax and keep the money as extra profit, this in itself would be illegal.

Hope this helps

Wullie

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Wullie,

My client has only physical locations in NYC, but now he wants to sell nationwide. I consolted him to verify with a tax attorney or someone in the tax profession about this. All my research has indicated what you summarized. A site can only charge tax if they have a physical location in the state (like my barnes n nobles example).

All I can do is give my client a professional advise, I can't force him to do anything.

In the admin system my client can enter a percentage based on state, city and even locality so if he wants to charge now but later realizes that he shoulnd't he can make the change easily.

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Just Imagine.
 
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Can you get internet connectivity from jails in the US? [smile]

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