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Charging State Sales Tax

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Yes, that is correct. Had my buyer been in CA, I believe the sales tax would have been calculated.
@justyn according to www.revenue.state.il.us/businesses/taxinformation/sales/rot.htm

"Sales to out-of-state buyers" Is under sales tax exemption and under internet sales "out-of-state retailer who does not collect Illinois sales tax, the purchaser owes use tax and is responsible for paying use tax directly to the department using Form ST‑44. "

Which is pretty much the same rule for every state. A business that sells to in state customer collects and pays the state sales tax for that state. A customer who buys from out of state is responsible to pay the use tax to their own state.
For the first time this year, Nebraska put use tax reporting right on the regular income tax form. I don't think most people knew it existed, because it only showed up on business forms.
Etsy could easily make sale tax processing easy for merchants by integrating TaxCloud. I currently utilize a PayPay Express Checkout button integrated with TaxCloud that easily calculates, collects and remits sales tax for any of the twenty four SSUTA states, and prepares all data for non SSUTA states. Etsy can easily integrate the same sales tax functionality. I am hopeful they will soon do so.
YestoHR5660--I wish it were that easy. Tax Cloud isn't accurate for all states, including NY. It's not based on county lines and the data is not checked to find which county an address is in before it gives the tax rate.


RudeBoyClothing says
wasn't there something that said if we were charged sales tax on wholesale orders save the receipts so we don't have to pay sales tax again because we already did?


~~~You report tax you overpaid when you remit tax collected from buyers, and the total dollars you send to the state is reduced by the over-paid amount. You collect tax from the buyer and then remit it as always.



jf6547--Technically you only charge based on your location in CA, but you are not supposed to collect local (city/county) tax from those in your state who are not having the goods delivered to your local tax zone.

CA is generous in their leniency about collecting it accurately--if you over collect they allow you to refund it to the buyer or send it to the state without penalty, just so long as you don't keep it. :)

Getting your answers from official sources is really the best way to go--see the info here & links to your state for the rules you should be following, including what I described above:


US: Sales Tax & Business Registration--Links to Official Government Websites
www.etsy.com/teams/7722/business-topics/discuss/9799713
@Becky - yes I know it is the same as other states use tax, I was simply saying it was specific to the internet which other states DO NOT have. They just added this law recently specifically for the internet.

EX) If I buy something on Amazon I have to pay an EXTRA tax to Illinois (additional to regular sales use tax) because it was bought on the internet. At tax time we are supposed to provide receipts to the state 'IRS' along with our filings and pay a certain percent MORE on all internet purchases. It is also supposed to apply to sales.

I am supposed to collect 'internet tax' for illinois on ALL sales I make on the internet regardless of where the buyer is from. Also if I don't collect it, the purchaser is supposed to pay ILLINOIS the additional tax as well as their state use tax. I don't think it's fair to ask people outside Illinois to pay Illinois simply because I live here and the state sucks so I don't charge it to them - I just pay if I need to.

Also Amazon was supposed to be moving their distribution warehouse here in Illinois because of this law - because ALL their sales are on the internet so they would be paying WAY more in taxes than other stores and they didn't want to have to change how one distributor operated. Not sure if they have moved it yet or not.

Illinois is not a business friendly state.
JustynLeighDesigns--I thought a judge removed that law in April.
GoTo they DID?! OH THAT IS AWESOME!!!! Of course they would not tell us that - they aren't getting more money if we know we don't need to collect it.....Off to check that out after I eat :-) Thank you for letting me know!

*skips merrily off to make breakfast*
interstate commerce is federally protected and exempt from tax, intrastate commerce is not.
"Intrastate, or domestic, commerce is trade that occurs solely within the geographic borders of one state. As it does not move across state lines, intrastate commerce is subject to the exclusive control of the state.
Interstate commerce, or commerce among the several states, is the free exchange of commodities between citizens of different states across state lines. Commerce with foreign nations occurs between citizens of the United States and citizens or subjects of foreign governments and, either immediately or at some stage of its progress, is extraterritorial. Commerce with Indian tribes refers to traffic or commercial exchanges involving both the United States and American Indians.
The Commerce Clause was designed to eliminate an intense rivalry between the groups of those states that had tremendous commercial advantage as a result of their proximity to a major harbor, and those states that were not near a harbor. That disparity was the source of constant economic battles among the states. The exercise by Congress of its regulatory power has increased steadily with the growth and expansion of industry and means of transportation."
legal-dictionary.thefreedictionary.com/Commerce+Clause

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