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Sales Tax Question

Okay so I just got a seller's permit so I have to collect sales tax like the rest of the world. To be honest It seems so overwhelming it's giving me anxiety! haha... but okay I looked at the sales tax part of my etsy shop but one thing that confused me is that I have to set a tax rate for each state? Because most people I've sold to are not from California. It says that tax is applied to the state its shipped to... not shipped from? So should I just go through each state and apply their tax rates? Help a new estian out, I'm so confused! :(

14 Responses

In most cases you are only to collect tax from customers in your own state, so you would only list a rate for wherever you live. What instructions did your state give you regarding out-of-state customers?
No, just tax people who live in California. You don't need to tax people who live in other states/countries. It is overwhelming when you get that seller's permit. I didn't even look at the paperwork for a few weeks because I was so overwhelmed!
They didn't tell me about out-of-state customers. So then when I claim my quarterly sales tax.. I don't include all the out of state purchases? Do I loose money that way, since I have to make up for it? Amanda I see you live pretty close to me.. how do you collect tax?
"So then when I claim my quarterly sales tax.. I don't include all the out of state purchases?'
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You need to check with your state. In my state I have to report out of state sales, but I do not owe sales tax on them.
When I got my permit, they told me to only collect from CA residents. It is a higher percentage here in Orange County, but rather than set up different tax rates for different counties, I just set it up to tax CA residents at 7.25%. I will end up paying a little extra for OC customers when the time comes to do my taxes. I will do taxes in Jan., 2013 and report all my sales, but only have to pay the taxes on CA customers.
You don't collect tax on sales to states where you don't have a license...and you don't pay CA for taxes on those sales, so you don't gain or lose money. Most of us have only one state's sales tax license, so collect only for sales with addresses in that state, usually our own home state. (People who do craft markets in other states, or similar selling, may need to have more than one state's permit and collect accordingly.)
The guy I spoke with said in-state sales only.
They didn't tell "about out-of-state customers" because out of state customers don't pay California sales tax. You only collect tax from those buyers in your state.

When you file your quarterly sales tax return you give the state the money you collected from the in state sales so you aren't (if you do it correctly) losing money at all.
I signed up for outright which imports all my etsy and paypal sales, fees, and taxes and then I add in postage, packaging, etc. Its free and easy to use vs. a spreadsheet. they even have a section for forms.

here is the link from etsy:

www.etsy.com/sell/offers

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