Internet Sales Tax: A 50-State Guide to State Laws

Learn the rules for your state about paying sales tax on Internet sales.

If you are selling goods or products online, you need to be aware of Internet sales tax rules. The issue of whether to require online retailers to collect sales tax in states where they have no physical presence has been a matter of significant debate in many states and at the federal level. Some states have enacted legislation that requires large online sellers to collect sales tax even with no physical presence in the state. These laws, sometimes referred to as “Amazon laws,” have been enacted in a number of states and are being considered in many others.

The federal government has considered legislation, including the Marketplace Fairness Act (MFA) and the Remote Transaction Parity Act (RTPA) that would affect large online retailers and how online sales taxes are collected in all states. The proposed federal laws would allow states to require sellers not physically located in their state to collect taxes on online and catalog sales made to people in their state.

Under the MFA, sellers that make $1 million or less in annual sales and have no physical presence in the state would be exempt. The RTPA has different criteria for the small seller exception; it exempts sellers with less than $10 million, $5 million, and $1 million, respectively, over the first three years. Under the RTPA, however, any seller who sells through an electronic marketplace like Amazon would not qualify for the small seller exception. Under both proposed laws, states would have to meet certain criteria to simplify their sales tax laws and make sales tax collection easier before they could require sellers to collect the tax.

The link below will take you to an article about the rules on Internet sales tax in your state. However, changes at the federal level would affect all state Internet sales tax laws so be sure to check for updates in this area at the federal and state level.

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