The easy answer is that unless your business has an actual, physical presence in the state that your customer is in, no sales tax needs to be charged. However, if you have a physical presence in that state, then sales tax is a must. A physical presence doesn't always mean an actual storefront. It can mean a store, an office, a warehouse, etc.
This is a changing game however. There is lots of talk and rule changing going on in this area. Lots of states are enacting rules making online retailers charge sales tax, no matter where your physical presence is. States lose an estimated $23 million each year due to online retailers that don't have to charge sales tax, and they want that money! Retailers also hate the fact that brick and mortar stores have to charge tax and online retailers don't. They feel that the brick and mortar stores are at a disadvantage, and that all online retailers having to charge sales tax would level the playing field.
This could make it more difficult for online sellers, who will have to calculate the appropriate sales tax for wherever the customer lives. Legislation has already passed for these sales tax laws in 12 states, and is pending in many more. Check with your accountant to find out the exact sales tax laws in your state, as they are possible to be changing soon. This could cause extra burdens for small business owners, to keep in compliance with the new laws, and keep all the sales tax information straight. That's why it is very important to check the laws in your state to make sure your business is compliant.Last modified on Sunday, 26 May 2013