Have you ever wondered what is taxable or if you should be taxing for items you are selling with your online business?
As an online retailer whether you sell cupcakes, DVDs, CDs or rubber bands there is one thing that you all have in common TAXES. As you are setting up your shopping carts you will be asked about what tax to charge but fear not the rules are quite simple.
When selling nationally, online retailers do not have to collect sales tax unless your business has a physical presence in your state. “Presence” means a physical location, store front, office, or warehouse in those states. If you sell cupcakes in Texas and someone buys in California you do not have to charge them taxes unless you have a storefront in California.
If your state does not have sales taxes you may be exempt also some states like Minnesota does not have sales tax on clothing items so if you sale shirts in Minnesota, you may be exempt.
The SBA has a great article Collecting Sales Tax Over the Internet that really explains clearly what all you need to tax for. You can read the full article here.
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