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State Sales Tax Number and Sales Taxes for Online Sales

By Jim Antonilli
Filed under: Small Business         Words in this Post: 299



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You need a state sales tax number to purchase merchandise. Most legitimate wholesale companies simply will not sell to you unless you have a sales tax number.

It is very simple to get a sales tax number. Applications to get a sales tax number are made at the state level. In most states the fee is very low, typically from $25 to $100, although some states require new businesses to put up a deposit as high as $500, which is usually returned after one year if the business pays its taxes on time.

There are several bills floating around the U.S. Congress, designed to allow states to collect sales tax on out-of-state Internet transactions (including sales on eBay and Amazon). One bill, which several states have adopted, does require Internet-based sales taxes to be collected and paid on out-of-state shipments; however, it exempts businesses that do less than $4 million in annual sales. eBay has been at the forefront fighting this legislation.

Many online sellers have been meeting with legislators lobbying the US Congress against any form of Internet tax. In the United Kingdom, the government has not been successful collecting VAT (the UK form of sales tax) on individual eBay sales and sellers, but they are now collecting the VAT on sellers’ eBay fees.

You do not pay any sales tax if you do not apply for and get a sales tax number from your state. But, if you do have a sales tax number from your state, you must make sure to pay your taxes. Many states not only impose financial penalties, which are double or triple the amounts due, some even impose criminal penalties. They have inspectors, who would pose as customers to check and catch you if you voilate the sales tax laws of your states in any way.

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Author: Jim Antonilli

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