sales tax

Do you need to set up Sales Tax for Your Business?

Whether or not you collect sales tax rests on one question: Do you have a physical presence in a state?

If you have a physical presence in a state, which includes a store, an office, or a warehouse, you collect sales tax in that state. However, if you do not have a physical presence in a state, you do not need to collect sales tax in that state.

This general guideline for collecting sales tax actually stems from a 1992 Supreme Court ruling that states that mail-order businesses cannot be required to collect sales taxes unless they have a physical presence in a state. In today’s market, this president has also spilled over to cover online retailers as well.