Arizona
I live in Arizona and own a business selling custom-printed apparel. I was wondering if I should be charging my customers in Arizona sales tax if the production and shipment of goods are never actually located in Arizona. The apparel ships from California and California residents are charged sales tax on their orders. I should note that I live and own property in Arizona and my main job is located in Arizona (the apparel company is just a side business). I also intend on deducting the cost of a home office in Arizona. Here is guidance that I can find online as to what may constitute a 'nexus' (full link here https://www.azdor.gov/Portals/0/Brochure/623.pdf):
Public Law 86-272
(15 USC 381-384) provides that no state may impose a
tax on net income where the only contact between the
taxpayer and the state is the solicitation of orders for the
sale of tangible personal property and where orders, if
approved, are shipped from a point outside the state. Out
-of-state companies that limit their activities in Arizona
to the solicitation of sales and shipment of tangible
goods from a point outside the state therefore have no
nexus to Arizona for income tax purposes, even if they
engage in other in-state activities that would otherwise
create nexus, such as maintaining an employee in the
state. So long as its activities are limited to the
solicitation of sales, an independent contractor (such as a
salesperson or broker) will not create nexus for the out-of-state
entity even though it engages in activities in
Arizona that would otherwise create nexus, such as
maintaining an office or owning property.
Based on this, I am wondering if charging Arizona residents tax is necessary, being that the products they are buying are not from here. I of course have no opposition to paying the state taxes as I would be adding this tax to the sales prices anyway if they were required... my only intent is to make the final price that an Arizona customer pays appear less and therefore more enticing (the law requires that they would have to file this on their own personal taxes in such a case). Would registering a company in Nevada or Delaware make a difference in this case?
I live in Arizona and own a business selling custom-printed apparel. I was wondering if I should be charging my customers in Arizona sales tax if the production and shipment of goods are never actually located in Arizona. The apparel ships from California and California residents are charged sales tax on their orders. I should note that I live and own property in Arizona and my main job is located in Arizona (the apparel company is just a side business). I also intend on deducting the cost of a home office in Arizona. Here is guidance that I can find online as to what may constitute a 'nexus' (full link here https://www.azdor.gov/Portals/0/Brochure/623.pdf):
Public Law 86-272
(15 USC 381-384) provides that no state may impose a
tax on net income where the only contact between the
taxpayer and the state is the solicitation of orders for the
sale of tangible personal property and where orders, if
approved, are shipped from a point outside the state. Out
-of-state companies that limit their activities in Arizona
to the solicitation of sales and shipment of tangible
goods from a point outside the state therefore have no
nexus to Arizona for income tax purposes, even if they
engage in other in-state activities that would otherwise
create nexus, such as maintaining an employee in the
state. So long as its activities are limited to the
solicitation of sales, an independent contractor (such as a
salesperson or broker) will not create nexus for the out-of-state
entity even though it engages in activities in
Arizona that would otherwise create nexus, such as
maintaining an office or owning property.
Based on this, I am wondering if charging Arizona residents tax is necessary, being that the products they are buying are not from here. I of course have no opposition to paying the state taxes as I would be adding this tax to the sales prices anyway if they were required... my only intent is to make the final price that an Arizona customer pays appear less and therefore more enticing (the law requires that they would have to file this on their own personal taxes in such a case). Would registering a company in Nevada or Delaware make a difference in this case?
