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inviktor
New Member

HI, I am selling things online, so likely I have to collect and pay sales tax for transactions in any state. I need to understand the Sales Tax Requirements.

 
1 Best answer

Accepted Solutions
rjs
Level 15
Level 15

HI, I am selling things online, so likely I have to collect and pay sales tax for transactions in any state. I need to understand the Sales Tax Requirements.

This TurboTax AnswerXchange forum is for questions about income tax, not sales tax. Here is some basic information about collecting sales tax for online sales. You will have to look elsewhere for the details. I have provided a link below that might be helpful.

Sales tax is determined by the state that the product is delivered to, not the state that the seller is in. Each state makes its own rules and sets its own sales tax rates. Under a recent Supreme Court decision, each state can determine under what conditions an online seller is required to collect sales tax on products that it delivers to that state. Most states will require you to collect sales tax and remit it to the state, even if you do not have a physical presence in that state. A particular item might be taxable in some states and not in others. So you have to answer two questions for each sale: (1) are you required to collect sales tax for the state that the product is shipped to, and (2) is the product taxable in the state that it is shipped to? You have to determine the sales tax rules for each state that you ship products to. There are services or software products available to help you with this. Most states will have an exception to the requirement to collect sales tax for small businesses, based on the amount of the business's total sales, sales in the state, or similar criteria. The Supreme Court's Wayfair decision was made less than a year ago, so the situation is rapidly changing as states pass new laws based on that decision.

In many states, the sales tax rate is not the same for the whole state. There are local sales taxes that vary depending on the specific location. Again, there are services or software available to determine the sales tax rate for a specific delivery address. QuickBooks, the small-business accounting software from Intuit, the company that makes TurboTax, includes sales tax calculation and tracking. Go to the following link for more information.

https://quickbooks.intuit.com/online/sales-tax/

You are definitely required to collect sales tax on any sales of taxable products that you ship within the state that you are located in. You can get information from the sales tax department for your state regarding which products are taxable.

To collect sales tax in a particular state, you are generally required to register with the state. Contact the sales tax department for each state regarding the requirements for registering, and for reporting and remitting the sales tax that you collect. A number of states have joined together in the Streamlined Sales Tax Agreement. You can file one registration that covers all those states.

Here's a link to some more information about sales tax for online sellers.

https://www.streamlinedsalestax.org/for-businesses/remote-seller-faqs

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3 Replies
VolvoGirl
Level 15

HI, I am selling things online, so likely I have to collect and pay sales tax for transactions in any state. I need to understand the Sales Tax Requirements.

You have to check with your state for that.  Turbo Tax only deals with income taxes.
rjs
Level 15
Level 15

HI, I am selling things online, so likely I have to collect and pay sales tax for transactions in any state. I need to understand the Sales Tax Requirements.

This TurboTax AnswerXchange forum is for questions about income tax, not sales tax. Here is some basic information about collecting sales tax for online sales. You will have to look elsewhere for the details. I have provided a link below that might be helpful.

Sales tax is determined by the state that the product is delivered to, not the state that the seller is in. Each state makes its own rules and sets its own sales tax rates. Under a recent Supreme Court decision, each state can determine under what conditions an online seller is required to collect sales tax on products that it delivers to that state. Most states will require you to collect sales tax and remit it to the state, even if you do not have a physical presence in that state. A particular item might be taxable in some states and not in others. So you have to answer two questions for each sale: (1) are you required to collect sales tax for the state that the product is shipped to, and (2) is the product taxable in the state that it is shipped to? You have to determine the sales tax rules for each state that you ship products to. There are services or software products available to help you with this. Most states will have an exception to the requirement to collect sales tax for small businesses, based on the amount of the business's total sales, sales in the state, or similar criteria. The Supreme Court's Wayfair decision was made less than a year ago, so the situation is rapidly changing as states pass new laws based on that decision.

In many states, the sales tax rate is not the same for the whole state. There are local sales taxes that vary depending on the specific location. Again, there are services or software available to determine the sales tax rate for a specific delivery address. QuickBooks, the small-business accounting software from Intuit, the company that makes TurboTax, includes sales tax calculation and tracking. Go to the following link for more information.

https://quickbooks.intuit.com/online/sales-tax/

You are definitely required to collect sales tax on any sales of taxable products that you ship within the state that you are located in. You can get information from the sales tax department for your state regarding which products are taxable.

To collect sales tax in a particular state, you are generally required to register with the state. Contact the sales tax department for each state regarding the requirements for registering, and for reporting and remitting the sales tax that you collect. A number of states have joined together in the Streamlined Sales Tax Agreement. You can file one registration that covers all those states.

Here's a link to some more information about sales tax for online sellers.

https://www.streamlinedsalestax.org/for-businesses/remote-seller-faqs

inviktor
New Member

HI, I am selling things online, so likely I have to collect and pay sales tax for transactions in any state. I need to understand the Sales Tax Requirements.

Thanks a lot for this information. It helps a lot to know where to go next to find out more and understand this complex topic. Thanks!
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