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Why should I collect sales tax from my client?

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Category : > Article Directory of Sales Tax Registration
Posted On : Thu Dec 31st,2009

Every business must collect sales tax on the items that are taxable including the sale of products and services by a business. These items also include the internet sales and catalog sales. Nexus or physical presence in the state you are operating is mandatory for collecting sales tax.

Every business must collect sales taxes on taxable products and services. As you start your business, the first thing you must do is determine if your products or services are taxable, the tax rate, and the difference in taxes if you are selling to individuals in different parts of your state. You must charge sales tax to your client because you are selling products and providing services to them.

Generally, for sales tax collection, you must get a license from your state. On each taxable transaction, you calculate the applicable sales tax, collect it from the buyer, keep tax records, and then file a tax return and pay the taxes to your state. You'll pay monthly, quarterly, or annually, depending on your level of sales.

Similarly same rules apply for Internet sales and catalog sales: You have to charge and collect sales tax when you deliver the product to a state in which you have a "physical presence."

When you sell products or services over the Internet, your obligation to collect sales tax is determined by the location of the buyer. If the buyer is located in a state where a sales tax applies, and your business has a physical presence in that state, you must collect the sales tax from that buyer.

Similarly, if you have any location, facility, employee, call center, address, or even one independent sales person in a state than you have to collect taxes in that state.


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Comments (6)
Michelle Rice   wrote on : Mon May 10th,2010
I am just starting up a candle business at my home in Texas. I was told by our CPA that I need a sales tax ID # for when I purchase materials at wholesale for my business. I was just wondering if I need to add sales tax to my customers when they purchase candles from me? Thank you for your time and help.      View Detail
Reply :
Dear Michelle Rice:

Thanks for choosing for your business needs. Yes, you are required to obtain sales id number. To obtain it please use the following link to apply for.

If you need any assistance please either call us at 516.822.3100 or email at
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Vinnie Yiu   wrote on : Mon May 07th,2012
as a non resident importer, how could we avoid being "physical presence" in the states and not to collect sales taxes, when we conduct internet sales to the consumers across the US?      View Detail
Reply :
Dear Vinnie Yiu:

You can use the following link to check your answer under sales tax.

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pat maples   wrote on : Sun May 13th,2012
what was the state sales & use tax in april 2012 I see it is 9.75% in Pigeon Forge, Tn in May has it changed from April 2012. I thought it was 9.25%      View Detail
Reply :
Dear Pat Maples:

To see the updates for the Sales Tax in TN you can use the following link.

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