Sales Tax for online orders
I just ordered an item here on Agon. The invoice is showing sales tax ($26.00) and a service charge ($2.99). I live in SC and the vendor is in PA. Kind of surprised as I thought sales tax was only applied when you purchase and pick up in the same state? And, the ad doesn't state sales tax and service charge will be applied. Should sales tax be applied in this application?
For many years, there was a federal law that prohibited taxation on the internet, and after a lot of complaints from the states, the law was no longer in force. That's been true for almost 20 years. I find that most stores charge sales tax, but here and there smaller companies won't charge sales tax. But they are in the small minority. |
@lostsouth has it right. Per google" Yes, most states now require sales tax on internet sales from out-of-state sellers who don’t have physical nexus, thanks to the Supreme Court’s 2018 Wayfair decision, which established economic nexus based on sales volume or transaction count, not just physical presence. Even if a seller doesn’t collect it, buyers in many states are legally required to pay use tax directly to their state, though enforcement varies. |
States have been attempting to create "nexus" with on-line sales for decades. Many on-line platforms such as Audiogon, have been required to comply. I have a business that sells non-electronics on EBAY. As a seller, I pay them additional fees to collect and manage state sales taxes for all of my sales; it is based on the ship-to location of the buyer. As a former CPA I would not wish to deal with it myself. Audiogon obviously does not charge that management fee to the sellers, but directly to the buyer. That is doing e-business in today's economy. |
