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Posted by Katie on December 13, 2006, 10:19 pm
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deddleman@sfidwater.org wrote:
> Harlan Lunsford wrote:
>> deddleman@sfidwater.org wrote:
>>> paul@tomkoinc.com wrote:
>>>> I am investigating selling some products on the internet which
>>>> we currently sell in a brick and mortar in Norman, Oklahoma.
>>>> I am aware that I will have to charge state sales tax on
>>>> internet sales to people in Oklahoma. My question is, if
>>>> someone from, say Tulsa, Oklahoma purchase an item from me, in
>>>> addition to the state sales tax, do I also collect the Tulsa
>>>> local sales tax or Norman local sales tax, or no local at all
>>>> but simply the state tax?
>>> The rule is that you collect all sales taxes for the point
>>> of delivery (if you have nexus in that state, which you do),
>>> including the local. Some jurisdictions have you remit
>>> everything to the state and some (for instance, a few cities
>>> in Alabama) make you report and remit separately to them.
>>> You'll need to check with the taxing authorities about that.
>> Interesting to see your comment about Alabama jurisdictions.
>> In fact not only the state Dept of Revenue and certain
>> cities to which you alluded are on the take, but a third
>> outfit, Alatax, collects for many cities and counties.
>> It's a real hodgepodge, believe me.
>>
>> Now as for what tax to collect, only the state sales tax is
>> collected for out of state sales IF one has nexus in that
>> state. For example yesterday I ordered Hickory Farms
>> assortment for my daughter in Florida. Their sales tax chart
>> lists the various states in which they must collect, GA 4%,
>> AL 4 and Florida 6%. Even though I'm not in FL, that's
>> the rate I'll pay.
> Very much a hodgepodge, not just Alabama. The last place I
> worked we were registered resellers in all 46 states & DC.
> The reason I mentioned Alabama is that Huntsville told me we
> had to collect city sales tax. We had no office there. I had
> similar experiences with auditors from other states, notably
> Ohio and Texas, where the state collects for localities. No
> offices there either. Disagreeing with them became too
> expensive.
California doesn't require the seller to collect the local
district tax unless it is "engaged in business" in the
district. But all the states that have joined the
Streamlined Sales Tax Project have had to move to a
"destination" rule for local taxes, if they didn't already.
You collect the tax for the jurisdiction to which the
property was shipped, whether or not you have a presence
there.
"Nexus" rules apply in the interstate commerce context, as a
requirement for a valid tax under the dormant commerce
clause rules set up by the U.S.Supreme Court. There is no
such constitutional requirement for INTRASTATE commerce,
unless it happens to be in the state constitution. A remote
seller (internet, mail order, telemarketing) cannot be
required to collect the state's use tax unless the seller
has a physical presence in the state. But once you have
that, you can be required to collect the local tax for any
local jurisdiction within that state.
Disagreeing with auditors from destination-rule states is
not only expensive, it's futile.
Katie in San Diego
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