View Full Version : Charging sales tax to out of state buyers
08-14-2001, 01:05 AM
I am taking a big step and have a question. A store in Las Vegas may start selling my cards, however I live in Arkansas so what do I about sales tax? What should I do? Thanks for your input.
08-14-2001, 01:20 AM
Jan, the store where the cards are sold will be responsible for the state sales tax for their state and any other taxes, such as local or county. Since they collect the taxes, they are responsible for paying them to the state, county, city....etc.
Since you live in another state, you are not liable for paying any taxes for the items sold. You are considered a wholesaler for the shop carrying your cards. When you file your state tax report (if you sell within the state of Ark), you should list sales thru the shop as wholesale sales. You won't be responsible for any taxes for wholesale, because retail sales tax can only be collected from the buyer at the time of purchase and the shop does that.
If you have further questions, you can always call the State Sales tax division (usually listed under State government in the phone book).
08-14-2001, 01:21 AM
I only sell on the Internet and so far as far as I know, I don't have to ask for sales tax if selling outside of my State, but I do have to ask for it for my own states residents if I sell in state. From what I understand Internet Tax issues are being developed every day so who knows what we may be looking at in the future or if I'm even right. IMO
Tax issues can sometimes be very sticky so I'd suggest getting in touch with a Sales Tax authority about these issues. Like your State Comptroller.
08-14-2001, 01:23 AM
we posted at the same time. Good answer though. :D
08-14-2001, 06:47 AM
In my state there is no sales tax for out-of-state sales. Only when goods are received within the territory is tax due.
I suspect this is true for most states; ever see those schlocky TV ads for creams or hits from the 19xx's? They'll always say residents of state X (but not in the other 49) need to pay Y% sales tax because that is where the business is located.
My state has very good on-line information and you can call the Department of Revenue if you have questions. Hopefully your state provides the same.
08-14-2001, 07:36 PM
My home state, North Carolina for the last 2 tax years, has been trying to collect NC Sales taxes on internet purchases that are OUTSIDE of NC, there is a section on our tax return to report out of NC internet purchases!
Also, a couple of weeks ago, on the news was reported that NC and other states are considering legislation that will require the collection of state sales tax on internet sales outside of the home state which would affect ebay sellers. I don't know if currently any states have passed this kind of law yet, but once some state do, others are bound to follow suit.
Internet sales is big biz and the government wants a piece!
10-07-2002, 10:15 PM
Each state is different I think. For example, in New York, tax is not collected on out of state internet sales EXCEPT on sales where the artist hsas what they term a "nexus". This means some physical place or person distributing and selling your art. If, for example, a shop was selling cards made by me, subsequent sales to anyone else would not be exempt, because the shop was a nexus for my work. A gallery representing your work in that state would also be a nexus. However, one private individual buying art for their own use would not count as a nexus. Crazy no? Call your state's sales tax line and find out specifically. They are usually pretty helpful.
Well Jill, I believe you misunderstand the nexus idea. If your definition held, then any product produced in your state and sold elsewhere would be taxable. Actually a nexus is when your company owns and operates a store or you have employees that sell your product in another state from your home base. An independently owned gallery that sells your art products is not a nexus of your business. Therefore taxes are not due in your state for sales that they make in theirs.
10-09-2002, 10:45 AM
You are right TPS and the person that I spoke to on the tax help line was wrong. She told me it was any time there was a physical presence or connection in that state (incorrect).
Your explanation makes much more sense. So now you've helped me too--Thanks much! Jill
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