Sales Tax For Online Businesses

If you are doing business online in the United States, you should consider whether or not you should be collecting sales tax?
Many states and local governments impose a tax on the sale of goods, including digital goods. If you reside or do business in one of those jurisdictions, then you may be required to collect the appropriate tax and remit it to the state.
Tax On Internet Sales
Sales tax on internet sales is a new and evolving issue. Most states would like to make business owners the states' involuntary enforcement agents for purposes of collecting the taxes. The states would like to impose the burden of collecting the tax and sending it to the government on the merchants - at little or no compensation.
In the "old days" it was simple. If you operated a brick and mortar business in a jurisdiction that imposed a sales tax, you were required to collect the tax at the point of sale and remit it to the government. The state could impose this burden on the merchant because the merchant was physically located within the state and, therefore, subject to the state's authority.
Now, internet businesses are doing business worldwide, but without a physical presence in most of the jurisdictions in which they are potentially making sales. In fact, in the digital world, it's even difficult to decide where a sale is made.
As a broad, general rule, if a merchant does not have a physical presence in a state the old rules continue to apply and the merchant cannot be required to collect the taxes for the state. In that situation, the consumer is normally required to report and pay the tax to his or her own state, although most probably failed to do so.

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