In the US, the collection of sales tax on retail sales is a state function. With the exception of Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon, the remaining US states collect sales tax on retail sales. Whether you live in the US or not, it’s your responsibility to know what the laws of your location require regarding the collection of sales tax on online sales. Despite popular belief to the contrary, online retail sales are taxable. According to the Small Business Administration, “If your business has a physical presence in a state, such as a store, office or warehouse, you must collect applicable state and local sales tax from your customers. If you do not have a presence in a particular state, you are not required to collect sales taxes.” For most of us, our homes are our offices and warehouses and thus constitute a ‘physical presence’. Contact the appropriate department in your state for specific requirements for the collection and remittance of state and local sales taxes.
While Zibbet doesn’t provide a sales tax application, PayPal does. There you can setup sales tax calculations for whatever US state you need. The sales tax calculation tool also has an international option for those who need it. You’ll find the ‘Set tax rates’ link under ‘Shipping and Tax’ near the bottom of the Merchant Services page. I recommend that you include a statement in either your shop policies or item descriptions or both, letting buyers know that sales tax will be added when payment is made at PayPal.
Best wishes for much success on Zibbet!
Vicki is committed to assisting her fellow Zibbeters improve their shops for successful online selling. She is the owner of five Zibbet shops: LOC Design Studio, Papa Spivey’s Trunk, A Stitch and a Prayer and Think Like a Fish. You can follow Vicki on Twitter and through her LOC Design Studio blog.
Tags: Sales Tax Collection, State and Local Tax, Success on Zibbet
