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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 2858
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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I am an online only business (no brick and mortar). My

Customer Question

I am an online only business (no brick and mortar). My company was formed in NY and we received a sales tax certificate of authority in NY. I am wondering what sales tax, if any, I should be charging across other states. It appears that it is not required to charge sales tax unless we have a nexus in that state but "nexus" seems to be loosely defined. Does having the sales tax certificate of authority in NY mean that I need to charge sales tax to customers in NY?
Submitted: 1 year ago.
Category: Tax
Expert:  Peter Griesch replied 1 year ago.

If you have a physical presence, you have a nexus, and must charge sales tax. Each state defines nexus differently, but all agree that if you have a store or office of some sort, a nexus exists. If you do not have a physical presence in a state, you are not required to collect sales taxes from customers in that state.

This rule is based on a US Supreme Court ruling in which the justices ruled that states cannot require mail-order businesses, and by extension, online retailers to collect sales tax unless they have a physical presence in the state.

If you are personally operating out of NY, are incorporated in NY, and have you tax certificate in NY, and are shipping products from NY, you're going to need to charge sales tax for NY.

Thanks for your questions.

Expert:  Barbara replied 1 year ago.

Different expert here - my name is ***** ***** I have a different answer.

If you operate your business in NY, you will charge sales tax to sales made to NY customers. Sales made to customers outside of NY are not subject to sales tax UNLESS you have nexus/physical presence in those states. Physical presence means such things as

  • having a warehouse in the state
  • having a store in the state
  • having an office in the state, or
  • having a sales representative in the state.

http://www.taxjar.com/states/new-york-sales-tax-online/

http://www.nolo.com/legal-encyclopedia/new-york-internet-sales-tax.html

Please let me know if you require further information or clarification.

Thank you and best regards,

Barb

Expert:  Barbara replied 12 months ago.

"If you are personally operating out of NY, are incorporated in NY, and have you tax certificate in NY, and are shipping products from NY, you're going to need to charge sales tax for NY."

Clarification is needed because NY sales tax is NOT charged to customers outside of NY when there is no nexus in those states. Only sales to customers in NY are charged sales tax.

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