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Seller permit for online sales?

Asked by: Bridgett  — 21 February, 2012

Is a seller’s permit required even if we are only selling products online?

Answered by: admin  — 21 February, 2012

Dear Bridgett,

Whether or not your business needs to collect sales tax on the items you sell online depends on several factors:

1. Is there a sales tax in the state where your business is registered? Several states have no sales tax at all (Delaware, Alaska, New Hampshire, Montana, Oregon).

2. Does your business have nexus in other states? For example, if your business is registered in Delaware, but you run it from an office in New York then your business has nexus in New York and you need to register a foreign entity in NY (and register and collect sales tax from New York customers as a result). Another example of nexus that does not require foreign qualification, but does require obtaining sales tax ID, is using a third party fulfillment center in a different state (such as Fulfillment By Amazon (FBA), where your items ship from.

3. Finally, is the item you sell is taxable in the state where you ship it to, provided your business is registered or has nexus in that state?

If you answered positively to (1) and (3) or to (2) and (3) then you need to obtain reseller permit in that state.

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