Hello All, I am wondering how taxing goes with an e-commerce business. I have been told three different ways but need to know the truth. I own an e-commerce business based in New York in the United States. The first thing I heard is that you have to tax every customer no matter what. Second is that you only have to tax customers from your state. Thrid, I heard it doesn't really matter because your business is paying the taxes anyways. Best Regards, Nick
Generally, you will only need to charge your in-state customers sales tax. In 2008, New York enacted a measure that requires many large online retailers to begin collecting sales taxes on purchases shipped to the state, even if they have no operations or employees there. The measure states that any online retailer that generates more than $10,000 in sales via in-state sales affiliates must collect New York sales tax. Many online retailers, including Amazon.com and Buy.com, have sales affiliates nationwide that link to the retailer's web site and are paid commission on any sales generated from their referrals. New York's measure clarifies state tax law to say that sales affiliates based in the state are representatives of the online retailer. This means that the retailer has nexus (i.e., a physical presence) in the state and is required to collect state sales taxes.