what is the law regarding online sales tax?
Wednesday, March 10th, 2010 at
6:10 am
I am starting my own online business selling my hand made products and I want to obviously sell in my home state (arizona) as well as out of state.
Do i need to charge out of state purchasers sales tax?
Do i need to charge in state purchasers the state, county AND city sales tax?
is there a place i can go to obtain this type of information.
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This can get kinda tricky. "Stores" must charge sales tax in all states in which they have a location. Since you are in AZ, residents there must pay tax. People outside of AZ do not have to pay tax. The tax percentage is different in diffent cities. Most places in the valley it is 8.1%. HOWEVER, if you are mailing to a city other than the valley, say Winslow, there is a universal percentage you charge. I believe it’s 7 point something.
It gets even trickier if you are dealing with food. Some food is not taxed at all, other types of food are taxed, but at a lower rate. It’s all crazy.
If I were you? I’d check a receipt from a business near your home. It’s probably 8.1 or 8.2 if you live in the valley. Just charge that for everybody in AZ. Don’t charge tax for people out of state. There is no tax on shipping fees in AZ.
You’ll need to charge state sales tax to purchasers in AZ, but not to people out of state.
Good question on the local sales taxes. I’m guessing that the rules would work the same - you’d collect it only for people in the same local area as you are - but that’s just a guess, and I’m sure your state tax department could tell you how it works, at least I’d start with them.
I dont know all the rules, but i do know that if i buy an item from you in AZ either on line or otherwise I am supposed to report that purchase to CA in my taxes so I can pay my sales tax here in CA.
Q. Do i need to charge out of state purchasers sales tax?
A. No. However, they are supposed to send the government a use tax themselves, but they probably will not.
Q. Do i need to charge in state purchasers the state, county AND city sales tax?
A. Yes.
To be absolutely sure contact the state comptroller’s website. They will have answers to your questions.