Simple e-commerce question...

[JSlime]

Hello folks, l've got a quick question on e-commerce and sales taxes that l was hoping someone would be able to help me out with. I couldn't really find a clear answer on this subject while searching google.


in any event.. the scenario;


My e-commerce site is stationed in a sales tax free state (Oregon)...
and l sell to someone that lives in a state that *does* have sales tax (ohio)...

-- would they have to pay sales tax?

also, as a follow-up question:
My e-commerce site is stationed in a sales tax free state (Oregon)...
and l sell to someone within the same state...

-- would there be any weird sales tax issues there?

Thanks for the help, and any resources/links
JSlime

[Connie]

Based on my understanding anytime you ship out of state you do not collect sales tax. The exception to this would be if you had a branch office in the state you were shipping to.

I'm located in Missouri. Yes I should collect sales tax from all orders from Missouri. I do not collect sales tax from other states.

[JSlime]

Wow, what a loop-hole.

Thanks for the info. What you've told me was kind of what l had understood after googling a bit, but wasn't quite sure. Thank you for confirming

-----------
Small follow-up if you don't mind...
Is paypal business account probably the easiest/quickest way to set-up shop and accept payments?

I've never done an e-commerce site, but from what l understand l can just tally up the total on my site, and then hand that total over to paypal and the customer pays on their secure servers....


What other good options are there?

JSlime

[Spathiphyllum]

JSlime,

clssam summarized it well. You collect the local sales tax within any state where you have a node of sales operations.

I'd suggest you visit your state's Tax Assessor/Collector's office or the state Comptroller. They should be able to provide the current tax tables and special taxing districts that apply to you should you need to collect sales tax. Much of this is online but a personal request to an administrative office should supply you with the more definitive answers.

[jason]

PayPal is a decent method of collecting payments, but be aware that some customers won't use PayPal for a variety of reasons and it looks more professional if you accept credit cards directly on your site.

The other option is to use a traditional credit card merchant account with a merchant account provider and a web gateway service such as AuthorizeNet. JPC has partnered with E-OnlineData to offer this service to their clients: https://www.e-onlinedata.com/jaguarpc. Note that there are several fees associated with going this route that aren't applicable with PayPal.

PayPal also has a fairly new service called Website Payments Pro (as opposed to Website Payments Standard, which is the method you referred to in your post). With WPP your customer makes their payments on your site without having to pass through PayPal--esentially they won't know they're using PayPal. There are some additional costs associated with going this route over using WPS, but they may be lower than when using your own merchant account.

I'd recommend checking the Merchant tools section of PayPal's site as there is a lot of good information there about how to make the PayPal process as transparent as possible. Also research what e-OnlineData has available, as well as other merchant services providers. Also, if you know anyone else that accepts online payments, it never hurts to ask them what they do (and I'm sure that Google will help you find discussion boards dedicated to this topic, too).

--Jason

[Gwaihir]

PayPal is a decent method of collecting payments, but

You'll also not want to be too Paypal dependent, as it can cost you your business should they lock your account down. -- Paypal is feared for its habit of locking down accounts after a simple complaint and then taking many months before actually looking into the issue, leaving the retailer without access to his funds for all that time. Check sites like paypalsucks for some of the worst horror stories.

[the_ancient]

Wow, what a loop-hole.

Thanks for the info. What you've told me was kind of what l had understood after googling a bit, but wasn't quite sure. Thank you for confirming

No it is not a Loop hole, it is constitutionally Mandated. No State is allowed to tax exports from another state, they agreed to that when they agreed to become a part of the "united STATES"

However most states with "sales" tax also have "use tax" which IS a loop hole around the constitution. Making the end user, your customer, responsible for any sales taxs on items they purchased out of state. Normally there is a section on that states income tax return form for this to be filled out. most people ignor it

You have to remember we, the united states, are suppose to be the base for "free market" and "free enterprise" which is why these rules were written in to the constitution in the first place, it is sad we dont following them anymore