Do Online Purchases Require Sales Tax?
Understanding whether your online purchases require sales tax can be confusing. The short answer is: it depends on several factors, including the location of the buyer and the seller.
General Rule
In general, sales tax is applicable to goods and certain services sold in a state. If the seller has a physical presence (like a store or warehouse) in that state, they are required to collect sales tax on sales made to customers in that state.
Economic Nexus
Recent changes in legislation have introduced the concept of "economic nexus." This means that even if a seller does not have a physical location in a state, they may still be required to collect sales tax if their sales exceed a certain threshold (often a set dollar amount or number of transactions) within that state.
Varies by State
Different states have different rules regarding sales tax for online purchases. Some states do not impose sales tax on clothing, while others may exempt certain food items. It's crucial to check the specific laws in your state to determine whether sales tax applies to your purchases.
Marketplace Facilitators
Many online marketplaces (like Amazon and eBay) collect sales tax on behalf of their sellers. If you buy through such platforms, the sales tax may already be included in your total, easing your responsibilities as the buyer.