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Do we charge a state sales tax for items purchased by phone or internet for other states?

Full Question: Our business sells retail items both to customers ordering by phone, internet and in person to ship to their residence and as gifts to other states. Do we charge a state sales tax for items purchased by phone or internet for other states - and is there a difference between a phone order and a customer purchasing on site to send out of state?

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Answer:

Diane Yetter photoYou are responsible for collecting tax based on the state where the items were shipped to if you are registered for sales tax in that particular state. You should be registered in a state if you have established a substantial presence in the state (nexus). There really isn't a difference between a phone order, internet and a customer purchasing on site to send out of state because the tax is still based on where the items are shipped to. The only potential difference is if the on site customer takes possession of the item in that state instead of having it shipped out-of-state. In this instance, the tax would be based on that point of pick-up.

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