Find your state’s sale tax rules

You must collect sales tax if your state has a sales tax law and you sell directly to customers. Local governments — even in states without sales tax — sometimes impose sales taxes, too. You may be subject to sales tax rules if you live on the border between two states or regularly sell in a neighboring state—some states have arrangements with neighboring states. In these sales tax jurisdictions you will need a permit from the state or local government authorizing you to make sales. Some call this a seller’s permit; others call it a resale permit. If you’re caught doing business without a permit, you could be subject to back taxes and a fine.

Sales Tax on the Internet

For a decade, no-sales-tax-shopping was a lure for online retailers looking to hook consumers on click-and-charge buying. But times are changing. Many states have amended their sales laws to include online sellers. Large online retailers like Amazon and Target have made agreements with state governments to collect and pay sales tax. At the same time, any online retailer with a physical presence in a particular state, such as a store, business office, or warehouse, must collect sales tax from customers in that state.

Of course, consumers who live in a state that collects sales tax are technically required to pay the tax to the state even when an Internet retailer doesn’t collect it. When consumers are required to pay tax directly to the state, it is referred to as “use” tax rather than sales tax. The only difference between sales and use tax is which person — the seller or the buyer — pays the state.

More Information:

• The Sales Tax Institute (www.salestaxinstitute.com)
• The Streamlined Sales Tax Governing Board (http://www.streamlinedsalestax.org)