Forums: Discussions for entrepreneurs and small business.

Hello,

Just joined today to get some high-level answers from anyone with experience setting up an online store.  I found setting up my website, shopping cart and gateway to be quite easy, if tedious.

However, now that I am trying to set up proper taxation of goods, I am lost.  I have some rather basic (read: "stupid") questions.  They are:

1. While I live out of the state, I incorporated as an LLC in the state of Nevada, which is a common practice.  Does that mean I charge anyone making purchases online Nevada sales tax?
2. If yes to #1, do I absolutely need a seller's permit?
3. If no to #1 and I am supposed to charge a different tax rate based on the consumer's location?  It can't be that difficult, right?  That would make setting up the taxes a monumental pain and even worse, filing taxes for each state is a nightmare.
4. I suppose I can just incorporate the taxes I would pay myself into the price of goods, but is that even legal?

I will be meeting with a CPA at some point to help me with this info, but I would like the advice of people with actual experience with online commerce.

Thanks!

For the most part sales tax is still administered as thought everyone purchased everything they needed within a 10 minute walk of their homes.

You need to collect sales tax from customers whose shipments are being in any state in which you have a ‘nexus’.  That definition does differ from state to state, but one thing in common is a physical location.  States are trying to find every source of revenue so I do expect that the states will 1) be more vigilant and two2) get very creative about the definition of nexus.  In NY for example, Amazon’s affiliates created a nexus even though Amazon has no offices, warehouses, etc. in NY.  So you'll need to learn how NV defines nexus.

You can always up the price and then pay the sales tax - but you have to be careful to state the price includes sales tax otherwise the state will claim the higher price is the taxable price - although some states may prevent this and this would not work so well if you are selling in multiple states.

I hope this helps...