Do I have to pay taxes on online sales?
I live in Ohio and I'm interested in selling supplements online. I will make my own website and process payments through PayPal. I have an Ebay account and I don't have to report sales or pay taxes on them. Would it be the same if I sold supplements on my own website?
Thanks & 10 points for best answer,
- Jason WLv 51 decade agoFavorite Answer
State sales taxes must be collected on any sale made to a customer in the same state. Interstate sales are not subject to state sales taxes.
If you are selling odds and ends in your spare time as a regular Joe, then no taxes need be collected. However if you are a merchant who is conducting a bona fide business (even part time), then you must collect sales tax, regardless of whether you sell on eBay or any other website, including your own. Unfortunately, the law in most states does not allow any special exemption for merchants who operate on eBay: http://pages.ebay.com/help/pay/checkout-tax-table....
What's more, I'm afraid that you definitely qualify as a merchant: you have a definite product line, you keep this line of products in stock, and you fill regular orders. You probably should be collecting sales tax now, unless Ohio law is different from my state (and it very well might be, for all I know).
Of course, many eBay merchants do not collect sales tax simply because they can get away with it. Like golf caddies not reporting their tips, you are small fry, and the state department of revenue probably has bigger fish to fry. But remember that if you are looking to grow your business, and expand your sales further, then playing fast and loose with the rules now may bite you in the future. If your business grows larger, you may quickly reach a size where the Dept. of Revenue may audit your books, and then you will have to account for all the rules that you casually violated 7 years before, at a time when you never contemplated an audit.
Good luck with your business!
- JudyLv 71 decade ago
If the items you sell are taxable in Ohio, yes you'd pay sales tax on any sales within Ohio, not to people in other states.
- Dan BLv 71 decade ago
You'll have to check the laws of all 50 states for changes. Be prepared to spend more time on paperwork related to taxes and government mandates than actually selling your product..
Some states don't have any sales taxes, but you may have to pay a sales tax to your home state.
Some states only tax online sales within their borders to in-state residents.
Some states require you to collect taxes on all merchandise sales.
Some states require you to collect taxes for sales to their residents and forward the taxes to that state regardless of where you, where the customer lives or where the shipping warehouse is located. Example: NYS has started collecting sales taxes from Seattle based Amazon.com on all sales to NYS residents.
Some states require their own residents to report purchases and take care of paying sales taxes to their home state themselves.
But for now, you only have to pay sales taxes on in-state sales.
- Bostonian In MOLv 71 decade ago
Your website, an affiliate website, brick and mortar store, trunk of your car, door-to-door, or on the street corner, it's all taxable income to you.
Don't forget to register for an OH sales tax ID and collect and render OH sales taxes for all taxable goods delivered in OH.