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QUESTION: "1Q. Is a US based Corporation, incorporated in the State of DE, hacing office in NY, subject to Sales tax for sales of Computer technical support services to ALL 50 States provided over the internet from remote location in India?"
ANSWER: No. It has to pay sales tax only on transactions coming into a state where it has a "physical presence". Meaning, residents of New York State must be charged sales tax. This is the law without regard to the overseas outsourcing component of the case.
QUESTION: "2Q. Please support your either response with authoritative statute and links?"
ANSWER: Sure, gladly. But, this is actually a matter of case law. Here is the citation and link: Quill Corp. v. North Dakota, 504 U.S. 298 (1992).
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1. What I understand from your answer is that it requires a nexus between entity and consumer and if it is out of state consumer, it will not apply. Please confirm?
2. What is then "The Streamlined Sales Tax Program" adopted by states to regulate inter state e commerce activity. Please advise?
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QUESTION: "What I understand from your answer is that it requires a nexus between entity and consumer and if it is out of state consumer, it will not apply. Please confirm?"
ANSWER: Yes. Your understanding is exactly correct. Just for a simple example. Customer, resident of Albany, New York, purchases the computer support services. Must be charged sales tax. Same scenario, but customer is now a resident of Billings, Montana. No sales tax charged. It comes down to "physical presence" (brick and mortar office in New York State).
QUESTION: "What is then "The Streamlined Sales Tax Program" adopted by states to regulate inter state e commerce activity. Please advise?"
ANSWER: It is an interesting approach, somewhat along the lines of a uniform law, in an attempt to streamline things. Neither New York nor Delaware have signed on. Currently, federal law does not allow for a state to collect sales tax absent that "physical presence" we have been discussing. In other words, it does not serve to change the concepts as already outlined.
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