# Attn On-line Sellers - State Sales Taxes



## Ken Scharabok (May 11, 2002)

http://www.dailyfinance.com/story/t...icid=main|htmlws-main-n|dl10|sec3_lnk3|180221

This could have ripple effects. Right now I'm only required to pay state sales taxes to TN for sales made within TN (averages about $5 a month). Looks like taxes may have to be collected and paid regardless of which state the buyer is in (assuming they have a state sales tax).

Even within TN there are different rates. For example, 6% on groceries and 9.25-9.75% on most everything else. However, different rate structure for new vehicles (don't know about used) and perhaps other big ticket items.

If I'm buying for resale then I don't have to pay TN state sales taxes since otherwise it would become a value added tax.


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## Harry Chickpea (Dec 19, 2008)

Amazon will lose this. It has a business presence in the state. That doesn't affect businesses and individuals who do NOT have a business presence in a state. Federal law trumps state law, and expanding the action would be restraint of trade, which is prohibited by the Constitution (or what is left of it). Kentucky tried to pull something along those lines with my business. One strongly worded letter and some documentation cleared it up.


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## ErinP (Aug 23, 2007)

Texas might have a case:


> The issue of uncollected sales tax runs deeper in Texas because Amazon maintains a distribution center in Irving (close to Dallas-Forth Worth International Airport), which it opened in 2006.


If I remember right, this is basically the rational for other national retailers, like Apple, to charge (and pay) sales tax in every state, even if you're ordering online.

ETA: Apparently Harry types faster than I.


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## edcopp (Oct 9, 2004)

What is "Required" and what gets done are two entirely different things. 

Take for instance OHIO where I live. There is a line on the personal, state income tax return where the filer is "Required" to declare all purchases made from out of state vendors, and pay the sales tax on all those purchases for the entire year. I wonder how that is working out for them.

There is also some language in the statutes that "Requires" all vendors, anywhere who sell to buyers in OHIO to collect the proper amount of sales tax, and remit it to the state of OHIO. I wonder how that is working out, since most vendors have no way to know about it.

OHIO has a state sales tax amount with each county having the authority to add taxes piggy back style as the local voters may allow by ballot. So the tax may be 6.5% in one county and 7% in another. Most of the differences are from 1/4% to 3/4%, with the piggyback part being remitted back to the counties. I am not sure how this is working out, but it sounds labor intensive. I guess that helps people keep working at the state sales tax department.

It would not surprise me to see a Federal sales tax, blanketed right on top of everything else, just for simplicity.

I guess these folks who are in charge never heard of the underground economy.


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## Ken Scharabok (May 11, 2002)

In TN you are not required to collect state sales taxes for personal property. Thus, yard sales would be excluded. However, if you are buying for resale then you are. From what I can tell most flea market vendors just say the tax is included in the price and then don't remit anything to the state. Basically that is stealing revenue from the state.
Some day the state is going to wise up and require flea market vendors to display a copy of the tax certificate and prohibit the collect of taxes within the sales price - it would have to be collected over and above the sales amount.

WIC and SNAP participants do not have to pay state sales taxes on their purchases within the two programs.

Its no big deal collecting nor paying. I have a state sales tax exemption form so I don't pay them on items I will consume (in manufacturing) or resale. Simple two page form I have to do once a quarter. For whatever reason I simply don't sell much within TN so the amount I have to remit is usually less than $20 a quarter.


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## MoonRiver (Sep 2, 2007)

I hate to say it, but the time for not collecting sales tax on internet sales should end. In most states, you are responsible for paying the tax even though it is not collected. When you fill out your state income tax, there is a question about sales on which tax is due but not paid.

It will be a pain for a small business to collect the sales tax. Not only does your software have to keep track of sales tax percentage in each state, you have to provide a quarterly report to every state. I imagine there are already businesses ready to provide this services for you.


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## donewithcity (Sep 9, 2010)

So, if I buy your product from Tn, on line, and have it delivered here, do you have to pay sales tax? I live in Oregon, we have no sales tax.


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## ErinP (Aug 23, 2007)

No.
The way it works right now, you only have to pay sales tax (speaking a retailer, that is) if you maintain a sales entity in the state to which you've sold/shipped. 
If you don't, on the other hand, you don't have to pay sales tax to either your home state, OR the buyer's.

Obviously most state's revenue entities do NOT like the way this works. 

(BTW, you live in Oregon, but your location is Arkansas??)


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## ldc (Oct 11, 2006)

I have friends with an on-line business who just moved out of North Carolina, when that state began requiring they collect taxes on their internet sales. They are now in Tenn....
ldc


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