# Handling local state taxes?



## printpuller (Jan 25, 2008)

I am starting to sell shirts on line. The state I live in doesn't require a sale tax. My question is, if someone buys from me on line and lives in a state or county that does have a sales tax, do I have to handle the collection from and payment into these states or counties?


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## sunnydayz (Jun 22, 2007)

The only place you have to collect sales taxes is the state you live in, so if your state does not require you to pay sales tax then you would not neet to collect them. I made the mistake last year of collecting tax outside my state and it was a pain because I had to pay that tax back. luckily the franchise tax board let me pay it to them, I just had to write an expanation as to why I was paying it to them. I no longer collect from anywhere except my own state.


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## printpuller (Jan 25, 2008)

Thank you so much for your help. As I considered the huge pain of keeping track of this if it were true, I almost didn't want to pursue sales.
Thanks again


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## nikkirae420 (Mar 14, 2008)

I have a quick question, How do you find your states sales tax? I live in CA and Im opening my store on Tues, and I need to figure all of this out! Thanx


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## badalou (Mar 19, 2006)

nikkirae420 said:


> I have a quick question, How do you find your states sales tax? I live in CA and Im opening my store on Tues, and I need to figure all of this out! Thanx


Check with the board of equalization for the tax rate in your county. You do have a sellers permit right? I am in San Joaquin county and I collect 8%. Lou


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## nikkirae420 (Mar 14, 2008)

Hey thanx Lou! Yeah all permits and LLC, figticous name, state and county permits...where takin care of! So 8% sounds good! Do you know anything about shipping and handling fees? I know I sound like I dont know what I am doing, but really these are the only things that have really held me up for a while! I have a pay pal account for my products, I would love to have shipping included, but Im clueless...


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## sunnydayz (Jun 22, 2007)

With your paypal account you can sign up to print your shipping labels right from there with usps or ups. It makes it really easy. You just get the free stickers from the post office that you can put right through your home printer. As far as shipping and what you should charge, each shipper has a cost calculator on their site where you can put in the weight and destination and it will tell you how much it will cost. It is best not to have free shipping unless you are adding that onto the retail cost because it can differ depending on where you are shipping to. Hope all of this helps some


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## badalou (Mar 19, 2006)

nikkirae420 said:


> Hey thanx Lou! Yeah all permits and LLC, figticous name, state and county permits...where takin care of! So 8% sounds good! Do you know anything about shipping and handling fees? I know I sound like I dont know what I am doing, but really these are the only things that have really held me up for a while! I have a pay pal account for my products, I would love to have shipping included, but Im clueless...


I sent you an IM to call me. I will help you get past this.. don't get fustrated about it.. you will get past it..


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## nikkirae420 (Mar 14, 2008)

sunnydayz said:


> With your paypal account you can sign up to print your shipping labels right from there with usps or ups. It makes it really easy. You just get the free stickers from the post office that you can put right through your home printer. As far as shipping and what you should charge, each shipper has a cost calculator on their site where you can put in the weight and destination and it will tell you how much it will cost. It is best not to have free shipping unless you are adding that onto the retail cost because it can differ depending on where you are shipping to. Hope all of this helps some


It was VERY helpful SunnyDayz, Thanks a mill.!


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## nikkirae420 (Mar 14, 2008)

badalou said:


> I sent you an IM to call me. I will help you get past this.. don't get fustrated about it.. you will get past it..


You are very kind, Lou! I will keep my focus straight and I will get past it! Thanks for all of your help!


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## printpuller (Jan 25, 2008)

I received an answer on taxes but is a sellers permit a California thing? Or is it common in most states?


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## peteVA (Nov 11, 2007)

A sellers permit is more often a local thing. Similar to a business license. In fact, there are many names for such things, depending on where you are.

In general, under varying names, there are these things you MAY need to be in business - 

A state sales tax account. Not in OR, as you have no sales tax.

A state business license / sellers or retailers permit, or other name. Only some states.

A local business license / permit - varies by city / county / township / borough, etc. Really varies, two adjoining jurisdictions, one may require the other won't. Contact local offices where you pay taxes, city hall, etc.

Zoning permit in many cities. Home businesses need approval from zoning.

Apartment or community approval - many apartment projects and howmowners associations do not allow businesses.
.


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## LittleDogy (Jan 15, 2008)

badalou said:


> Check with the board of equalization for the tax rate in your county. You do have a sellers permit right? I am in San Joaquin county and I collect 8%. Lou


Ok, using California as an example:

Do you charge the tax rate from where you ship from or the tax rate of where you ship to?

Because the tax rate will vary from county to county and city to city.

For example Fresno and Clovis are right next door to each other, both are in Fresno County and both have different tax rates because the City of Clovis has added a little to the tax rate.

So if I my customers have different tax rates, will I be collecting different tax rates?

Brick and Morter is easy because the point of sale is at that location but when you start to ship to different locations within California, doesn't change the sales tax to the point of delivery?


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## peteVA (Nov 11, 2007)

Actually, if you check the BOE regs on this and you'll see that even with a B&M store, such as a furniture or appliance store, you still must collect the sales tax for the address to which you deliver. How much of it is actually done I would not care to guess, but that is how the law reads.

In Ohio they are pushing the same thing for online sales. I think they have backed off, due to the complexity, but they have been pushing for it. Exact tax for exact address on every possible sale.

I would say that unless there is evidence that they are enforcing it, simply charge the correct tax for your address and hope for the best. 

I am involved in sales tax issues on a number of forums and have never heard of - 

Software that will accurately calculate sales tax by address - for any state.

Any state taking any action against the first seller for not collecting tax by address.

This includes New York, as well. They have similar laws, but I have never seen either the software or any cases against anyone - anywhere.

So, charge the tax in your local area, just report all your sales in that district and be done with it.

And cross your fingers you're not the example.......... 
.


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## LittleDogy (Jan 15, 2008)

peteVA said:


> I am involved in sales tax issues on a number of forums and have never heard of -
> 
> Software that will accurately calculate sales tax by address - for any state.


Thank you Pete,

I work for a large company where the sales tax does in fact change depending on what the delivery address is. 

So even if I wanted to collect sales tax properly, there's not an easy way for me to do it with my online sales? 

And most people are just collecting a flat tax rate through their websites for sales within their own state?


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## peteVA (Nov 11, 2007)

Yes, that's about all they can do.


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## LittleDogy (Jan 15, 2008)

peteVA said:


> Yes, that's about all they can do.


Ok,

That could create a problem for me since I am located in the City of Clovis where the sales tax is higher than surrounding areas. 

My sales tax is 8.275% and there's parts of California where the sales tax is as low as 7.25%.

So it will just be a matter of time till I get notified by a customer that I charged them too much sales tax and they will be right.

On a $20 shirt that's about 21 cents so how do I deal with the person that counts every penny?


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## peteVA (Nov 11, 2007)

Send them a refund.

Or, charge everyone 7.25% and when you actually fill in and pay the return list everything by address and pay the difference yourself.

Or, don't lose any sleep over it, just go with the flow.

Or, invent a software package that knows that one side of the street is in a sewer district and the other side isn't, even though they are both in the same zip code. And that while the zip code is for the post office in a city the actual home is in the county and has a different rate. 

Just pick what you are comfortable with and go with it. The BOE is not going to lock you up over it, as long as you make an honest effort to collect the tax. They have much larger fish to fry.
.


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## debz1959 (Jul 29, 2007)

LittleDogy said:


> I work for a large company where the sales tax does in fact change depending on what the delivery address is.


 
I'm confused. California Sales tax is determined from the point of shipping, not the delivery address. 

Does the company have different shipping locations?


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## LittleDogy (Jan 15, 2008)

debz1959 said:


> I'm confused. California Sales tax is determined from the point of shipping, not the delivery address.
> 
> Does the company have different shipping locations?


 
According to the company I work for and what Pete said:

"Actually, if you check the BOE regs on this and you'll see that even with a B&M store, such as a furniture or appliance store, you still must collect the sales tax for the address to which you deliver. How much of it is actually done I would not care to guess, but that is how the law reads."


You are suppose to charge the sales tax of the destination of delivery.


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## peteVA (Nov 11, 2007)

For awhile I was using a dropshipper in CA who had to charge me - in VA - sales tax for any orders I had dropshipped within CA. So, I got a BOE sales tax account. I no longer have it, but I know for a fact there is both in their printed literature they send to new accounts, and within their online site specific examples of charging the correct tax for the delivery of goods that were actually delivered.

Anything bought and carried out of the store paid the tax in effect at the store, but anything delivered pays the tax at the delivery point. 

BTW, this also applies throughout inter-state deliveries. If you live in AZ and buy something in CA and take it with you, you pay the CA tax. If you have it shipped to AZ you do not pay the CA tax. You are personally liable to pay the AZ use tax, something that hardly ever happens. 

This is true between any states, as long as you have it shipped. 
.


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## debz1959 (Jul 29, 2007)

LittleDogy said:


> According to the company I work for and what Pete said:
> 
> "Actually, if you check the BOE regs on this and you'll see that even with a B&M store, such as a furniture or appliance store, you still must collect the sales tax for the address to which you deliver. How much of it is actually done I would not care to guess, but that is how the law reads."
> 
> ...


?????

You only have to collect/report/pay the different sales tax rates if you are physically delivering items. Everything sold outside your district is charged the 7.25 California Rate.

Furniture/appliances are physically delivered by the seller unless they are, again, "delivered" to a shipper then delivered to the buyer. 

http://www.boe.ca.gov/pdf/pub105.pdf

Please read the "Engaged in Business"


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## peteVA (Nov 11, 2007)

Well, there you go - the definitive answer.
.


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## LittleDogy (Jan 15, 2008)

debz1959 said:


> ?????
> 
> You only have to collect/report/pay the different sales tax rates if you are physically delivering items. Everything sold outside your district is charged the 7.25 California Rate.
> 
> ...


 

So if I own the truck or car that does the delivery, then I have to figure out the local tax rate in the area that I'm making the delivery to? ..... But if I mail it, the 7.25% is good? 
If so, then Lou is charging too much @ 8%.


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## debz1959 (Jul 29, 2007)

Unless you sell within your district and your district has a higher tax...


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## LittleDogy (Jan 15, 2008)

debz1959 said:


> Unless you sell within your district and your district has a higher tax...


Ok,

So just to clarify.

#1 If I mail out of state - No Sales Tax

#2 If I mail in-state but out of my district - Charge 7.25%

#3. If I deliver with my own company vehical - Charge the sales tax of delivery address.

#4 If I mail within my own district - charge my own district tax rate.

Did I get it right? And if so I wonder how hard it is going to be to set up my website to charge correctly.


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