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Tax Law : Federal, State and Local Income Taxes, Sales Taxes, etc. For Estate, Gift and Inheritance Taxes, Please Post Under Will, Trusts & Estate Planning
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Old 06-08-2009, 03:51 PM
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Join Date: Jun 2009
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Out of state Internet Sales


What is the name of your state (only U.S. law)? Wisconsin

I am really confused on how taxes work.. I am just starting up my business and i want to make sure I get things right..

If i were to sell items online to out of state customers.. for example Indiana who does not require sales tax on out of state purchases.. i would not charge sales tax on the item.. but would i not still need to pay taxes on the income to Wisconsin and the fed govt? and if so why would I not charge taxes on the item? or do i just up the price to cover the tax?

also if i were to sell to texas.. where they do require sales tax. be charged at tax time i would need to file forms to pay texas taxes on the items sold there? is this correct? and then i would still need to pay taxes to wis and the fed govt on the income?

or are taxes only paid on income over expenses at the end of the year to the fed govt?
  #2  
Old 06-08-2009, 04:25 PM
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Join Date: Mar 2006
Posts: 6,673
Sales and income taxes are very different things. However, if you have no nexus in a state, it is either illegal or impossible to collect from you. (Depending on the specific facts.)

You need to consult with a CPA with knowledge of interstate commerce over the internet. Problems on questions like this show a lack of knowledge required for a business model with a lot of legal complexity.
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