NYCPHP Meetup

[wkamm at rvyriptide.org]

I'm no tax accountant either, but it seems to me that the location of your
dropshipper is irrelevant.  He is not the one selling the product to your
customer.  He is selling it to you.  And you don't have to pay sales tax
to him because you should have a state resale certificate, making you
exempt from having to pay sales taxes.  And, IMO, the location of your web
server is meaningless.  I've never heard of that being an issue.

So, the only transaction that could possibly be taxable is between you (in
Michigan) and the end customer (in California).  Unless Michigan law
requires you to collect sales tax on something sold to a person in
California, and I doubt that is true, no sales tax gets collected at all
here.

> At 7:14 PM -0400 8/13/08, (Margaret) Michele Waldman wrote:
>>Here's another question.
>>
>>Is an ebusinesses supposed to file taxes and licenses in every state they
>>are doing business?
>
> I'm not a tax man nor an attorney, but the problem is much more
> complicated than anyone here has stated.
>
> Clearly, if you're doing business in State X and a customer who lives
> in State X buys something, then you are required to collect and pay
> State X's sales tax. That's pretty simple. But the net complicates
> things a lot.
>
> But here is a typical problem that my wife and I face everyday, she
> is a jeweler located in Lansing, Michigan (http://earthstones.com).
>
> One of our customers in California contacted us for a piece of
> jewelry. We show them a picture of the item via our web site which is
> located on a server in Springfield MO. The customer likes it and
> wants to purchase the piece and pays us via PayPal (a global
> company). The manufactor of the jewelry is located in Columbus Ohio
> and per our instructions and payment, they drop-ship directly to the
> customer in California. Now, who owes what State taxes?
>
> Remember, there are four States involved (not counting PayPal) -- and
> I am positive not one of them will say "No thanks" to the possibility
> of cashing-in IF they can.
>
> When we have congressmen like Ted Stevens who was opposed to an
> amendment regarding network neutrality and called the Internet a
> "series of tubes", we are far from resolving the State tax problem.
>
> As Will Rogers once said "Be thankful we are not getting all the
> government we are paying for."
>
> Cheers,
>
> tedd
>
> --
> -------
> http://sperling.com  http://ancientstones.com  http://earthstones.com
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