Have a Tax Question? Ask a Tax Expert
Hello and thank you for using Just AnswerAll states are a little different in how they determine if sales tax must be collected. They most all come down to Nexus or link to the state.
I understand that you need to demonstrate physical presence. So you are saying that for each state I need to research whether or not drop shippers fall into that category or not? What specifically am I looking for and where do I find that information?
Each state has a separate section for sales tax and most now speak specifically to inter net sales. Go to the revenue page for each state and click on Sales Tax tab.
Here is an example of Texashttp://www.window.state.tx.us/taxinfo/sales/
I sincerely XXXXX XXXXX is helpful
I know the general tax law so it's nothing new except that I need to research this on my own by state, so it was only somewhat helpful. The part I need help with is (with New York for example) what specifically that means for me. If that does mean I need to collect sales tax from my drop shippers in New York, do I need to apply or register for a permit of sorts?
This link details all states and how they handle drop shipments.http://www.ffr-dsi.com/forms/Drop%20Ship%20Requirements%20for%20Tax%20Exemption.pdfYou will see that you can give the NY supplier the sales tax exemption listing CA and then not need to collect in NY. The buyer in New York would be liable for the Use Tax.