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I am a start up clothing brand in nyc. Ive made sales in state and out of state. I just started 1 week ago. Do i still collect sale taxes? I do not have nexus. Help :(

Im confused and not understanding how im going to pay for taxes or when the season comes if im not making that much? How do i report it? Or what will i report? I do have my certificate of authority to collect taxes in nyc but i also am so confused. I dont want to hurt my customers either with my mistake. I didnt realize i wasnt collecting sale taxes. I know in nyc anything under 110 i do not charge sale tax.. but anything over i do? Do i still collect even doe i do not have nexus ?
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1 Reply
rjs
Level 15
Level 15

I am a start up clothing brand in nyc. Ive made sales in state and out of state. I just started 1 week ago. Do i still collect sale taxes? I do not have nexus. Help :(

This forum is for income tax questions, not sales tax. Here's some basic information to get you started, but you will have to look elsewhere for the details.


Sales tax is charged at the location where the product is delivered, not where the seller is located. Each state has different rules about whether you are required to collect sales tax, and different rates. 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. A particular item might be taxable in some states and not in others. So you have to answer three questions for each sale.

 

  • Are you required to collect sales tax for the state that the product is shipped to?
  • Is the product taxable in the state that it is shipped to?
  • What is the sales tax rate at the location that the product is delivered to?


To collect and remit sales tax in a particular state, you are generally required to register with that state. Most states have an exception to the requirement to collect sales tax for small businesses located in other states, based on the amount of the business's total sales, sales in the state, or similar criteria. However, you are required to collect sales tax on all sales that are delivered to any state in which your business has a physical presence, regardless of the rules for out-of-state sellers.


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.


QuickBooks - Calculate sales tax


If you are selling through an online market such as Shopify or Amazon, they will have some mechanism to help you with sales tax.

 

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