Shipping and tax laws for eCommerce websites

By: 
Lori Highby
tax and shipping on e-commerce sites

Alright, you've got an awesome product and you are selling it online!  All the online marketing, seo, linking, blogging is in place.  But what about the really fun stuff pertaining to selling a product online: TAXES.  Ugh, no one is a fan of that word.

 

Each state has different laws pertaining to how you are responsible for taxing the product you are selling online.  The congruent part of the law is that you tax if you are shipping the merchandise to a state you are conducting business in.

 

For example, if you have a location in Florida and Tennessee, you are shipping a product to Michigan, you do not need to charge tax on that order.  However, if you are shipping to an address in Florida, you do need to charge tax on that order.

 

Download this PDF for a detailed list of the different sales tax by state: http://www.taxadmin.org/fta/rate/sales.pdf or visit this link for further details by state http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States#By_jurisdi...

 

SHIPPING

Some states require that you collect tax on shipping as well.  Currently, the states that require tax on shipping include:

Arkansas Connecticut
Florida Georgia
Illinois Indiana
Kansas Michigan
Minnesota Mississippi
Missouri New Mexico
New York Ohio
Texas Washington
West Virginia Wisconsin

 

NOTE:  Taxes and the laws associated with them are always changing.  It's best to investigate the laws of your state(s) to ensure you are taxing according to the law that applies to you and your eCommerce website.

 

The links in this post may be outdated or will probably quickly become outdated.  This information is a general resource and should not be used as your final answer when determining how to apply tax to your eCommerce website.

 

Some additional links found while putting this post together:

 

Amazon.com does a great job explaining their complicated tax requirements: http://www.amazon.com/gp/help/customer/display.html?nodeId=468512

http://www.irs.gov/businesses/small/industries/article/0,,id=208385,00.html

 

Let me know if I am missing anything, or if you have found a better link relative to a specific state.  I will gladly update this post.

Image credit: renjith krishnan / FreeDigitalPhotos.net

 

 

 

 

About the Author

Lori Highby
President

Lori is the big man on campus, the big kahuna, the boss lady! She keeps the team energized and on track and brings in new opportunities. Outside of the office, Lori loves being with friends and staying active, ice hockey, painting, yoga, traveling; and of course some good old Netflix viewing doesn’t hurt once and a while.


If she could have any superpower, Lori would choose to fly (no traffic or airline shenanigans!).

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