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What if we receive orders from states where we have nexus, but product is shipped to a non-nexus state?

Full Question: We are a company in NC that sells tracking devices online with Nexus in 4 states: NC, CO, PA and TX. I see some orders placed where the end user resides in a state with nexus (TX) but the product is being shipped to a non-nexus state (FL). Does the end user have to pay Texas state sales tax? These are NOT resale items.

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Answer:

Diane Yetter photoThe determination of whether you need to charge and collect sales tax is based on the ship to location. The bill to state or the state of the customer's payment method is usually not relevant. When an end user customer makes a purchase but asks that the goods be shipped to an alternate address, you look to the ship to address and determine whether you have nexus in that state. If you do, you would charge the billing customer sales tax based on the ship to address. If you do not have nexus in the ship to state, then the buyer has the obligation to remit any use tax due on the purchase. In the example provided, the purchase would not be subject to Texas sales and use tax. If you do not have nexus in Florida, you would not be responsible for charging Florida sales tax on the purchase. Rather, the purchaser would be liable to remit Florida use tax on the purchase.

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