TaxLoopholes Blog
Sales Tax Update: Amazon.com vs. The State of New York
When it comes to sales tax, it’s all about location. If you’ve got a brick-and-mortar store, things are easy. Everyone pays, unless the customer can produce a valid wholesaler certificate that says they are exempt from paying sales tax, and you don’t have to collect it on their purchase. But things get trickier online. If your business sells things online, where is your sales tax nexus now?
Typically the same logic still applies. Where does the sale happen? If you’re shipping from your basement in Ann Arbor, then any sales to Michigan-based consumers will be subject to sales tax and you’ll be responsible for collecting it, and paying it to the State of Michigan. If you sell through your website but the merchandise is direct-shipped from elsewhere, only sales in the same state the shipper is located in are taxable. So if your goods are shipped from Ohio, you’re only responsible for collecting sales from Ohio-based purchasers and sending that money to the Ohio Tax Department.
The State of New York is trying to change that, by going toe to toe with Amazon.com.
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