sales tax question

15 years ago

The state will determine whether or not sales tax needs be applied to downloaded products. Some states don't require it, some do and some times it's ambiguous.

The IRS wouldn't come knocking for sales tax, sales tax is handled at a state level.

An accountant in your state would be the best to ask, I would say to contact your state revenue department but...they often have no clue what they're talking about.

If you use a service like Clickbank they handle all this for you and to my knowledge are only collecting sales tax for NY residents at this point.

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Kay King

15 years ago

New York enacted what is referred to as the "Amazon tax" in 2008 - and is currently proposing more internet taxes.

Last year's legislation applies to merchants making over $10k a year in sales - but the fuss is that it seems to expand the term "merchant" to include those who sell by displaying ads or banners on websites.

The IRS has nothing to do with it - but living in New York you need to read up on what's going on there as it's the State you need to worry about.

kay

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LB

15 years ago

Originally Posted by Kay King

New York enacted what is referred to as the "Amazon tax" in 2008 - and is currently proposing more internet taxes.

Last year's legislation applies to merchants making over $10k a year in sales - but the fuss is that it seems to expand the term "merchant" to include those who sell by displaying ads or banners on websites.

The IRS has nothing to do with it - but living in New York you need to read up on what's going on there as it's the State you need to worry about.

kay

I didn't even notice the OP was in NY...in that case, yes, you need to talk to a professional because NY is "leading the charge" on this thing.

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Tyrus Antas

15 years ago

Would be interested in knowing if you're forced to collect sales tax when selling to people outside the US. In most countries inside the EU you get an exemption when you export outside the common economical space.

Tyrus

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AnneE

15 years ago

Yes, lucky me in New York state. Well I'm certainly safely under the $10K in sales (silver lining to every cloud). I remember years ago calling the state tax agency and they made it sound like I should collect it, but didn't seem 100% clear on what I was talking about. Then when I did about $150 in business for the whole year, I figured I'd pay my accountant more to figure it out for me than I would in tax and decided to ignore it. But... while my income growing is good news in many ways... it also means I probably need to start paying attention to this.

Headline: Local Author Arrested for Tax Evasion ....

well... I think I'll concentrate on making the big bucks, but it doesn't sound like anyone in NY has experience with their accountant saying they do not have to collect sales tax on ebooks and why. So..... gosh... could everyone who just bought my WSO, please chip in another 8%. Kidding... I'm kind of half-tempted to have everyone pay the same, maybe even boast I'll pay the sales tax and then at the end of the year take the hit in paying up.

Good point, it's not the IRS, you know what I meant though... those tax dudes in suits.

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Dan C. Rinnert 15 years ago

Originally Posted by AnneE

I'm kind of half-tempted to have everyone pay the same, maybe even boast I'll pay the sales tax and then at the end of the year take the hit in paying up.

I don't know how they do it in New York, but in Ohio, you have to pay sales tax to the state on a monthly or biannual basis, depending on your sales volume. Paying late (and in this crazy state they count that by when they receive payment and not by a postmark) carries penalties which, in the case of smaller merchants, could be more than the sales tax they collect. So, that's something you'll also need to check into in New York. You might not be able to wait until the end of the year to sort things out.
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