Taxpayer asks:
We think we might need some tax advice, regarding the teen’s CD.
Obviously we’re charging sales tax (.0655%) so that his $9.99 CD sells for $10.65… but that’s IL tax. Do we have to worry about other states’ taxes if someone from another state orders from him?
Taxgirl says:
The short answer is no, so long as you’re not actively soliciting in other states.
Internet sales can be tricky. Although some states like New York are taking steps to broaden what they consider to be “presence” for purposes of sales tax, the general rule is that if you do not establish a physical presence inside a state, there’s no need to collect sales tax. Physical presence usually means that you maintain a store or sales reps, attend fairs or shows or actively solicit inside of a state. If you merely have a web site – and no real physical presence – that likely wouldn’t subject you to collecting sales tax in other states.
(Note that this answer was the case in 2009 but may not be the case today in a post-Wayfair world.)
Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
If you have a question, here’s how to Ask The Taxgirl.
