“Sales Tax” is always one of the significant questions for business owners in Delaware. Should you collect sales tax when you operate in other states? To answer your questions, you can read our article or contact us via e-mail/phone.
Collecting Sales Tax Online
If you are operating a business with a physical shop in which you sell your products, it is quite easy to handle “sales tax”: you collect your sales tax directly from your customers. For instance: if you are operating a retail business in Maryland, you receive your sales tax from those who buy products from you.
But, what if you are selling your products online? Do you collect your sales tax directly from your customers just as you do with your physical store? This may depend on the situation.
How and When to Collect Online Sales Tax?
If you have a physical presence (store, office, warehouse, etc.) within the state, you are supposed to collect your local and state sales tax directly from your customers. If you do not have a physical presence within the country, you are not required to collect sales tax from customers within that state.
This physical presence is legally known as “nexus.” Even though each state defines “nexus” differently, they all agree that physical presences such as an office or a store should be regarded as a “nexus.” If you are not sure if you have a “nexus,” it is always a good idea to consult the revenue administration within that state. If you do not have a “nexus” within a state, you are not required to collect sales tax.
According to laws, states cannot require businesses operating online or via mail to collect sales tax.
Exceptions
Not all states oblige you to collect sales tax. For example; Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon do not require sales tax. Some states also hold exceptions for products such as food or clothing. If you are collecting sales tax, you need to know the appropriate rates.
It can be difficult to determine which sales tax you should collect. Most online sellers use “shopping cart” services many of which automatically calculate sales tax on behalf of you.
If you still have questions about sales tax, please contact us!
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