Online sellers who have nexus in a state with sales tax must collect sales tax from all buyers in that state. But how do you determine if your business has nexus in a state? Writing for sellbrite, Amanda Cameron of Patriot Software provides a good summary of the issues.
Sales tax nexus presents a unique challenge for online sellers. Traditionally, business owners collect sales tax in the states they have a physical presence. But with the rise of ecommerce, the game has changed.
In her article, Amanda:
- defines sales tax (including a summary of the states and situations in which sales tax must be collected) and nexus (including some non-obvious examples of how nexus is established);
- describes how sales tax should be collected and remitted;
- explains how sales tax nexus applies to online sellers;
- outlines how origin-based states differ from destination-based states and how that information determines the tax rate you should use; and,
- delineates click-through nexus and lists the states which enforce click-through nexus on Ecommerce vendors.