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Do I need to pay sales tax for selling $50 total ($1 per) digital-only watch faces online?

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MakerMovement

New member
Asking for filing for 2018 tax year.

Buyers for these digital-only $1 watch faces are across the globe, including Israel, Latvia, and the USA. Most of these digital products were made in 2017, but as they stay on the marketplace, sales were made in 2018 (I maybe worked on $2 total worth of sales in 2018). I got a job early in the year, and so my focus was taken off of this so I don't think I would have a nexus in the current US state I reside in as I don't have an warehouse/store front/office/employees/etc.

If I do need to pay sales tax, who do I pay to? Israeli government? It doesn't say which US state, and US federal government doesn't charge sales tax so not sure about that...a lot of worry over a measly $50, but don't want to have to owe more money down the road.

Thanks in advance. :)
 


Taxing Matters

Overtaxed Member
If you operate a business from a particular state then that state may require you to collect sales taxes for sales made in that state. So at the very least you'd be subject to the tax in the state where you are located and manage the business. It is no longer the case that you must have physical presence in a state to be required to collect sales tax for sales made to that state, so you'd need to check the laws of each state to which you sell the stuff and determine what liability you may have to collect the tax for that state. As for sales to residents of other countries, the laws of those other countries determine that.
 

LdiJ

Senior Member
I agree with Taxing Matters. However, the amount of money involved here would make that counter productive since you stated that you sold them all over the world.

What is the maximum amount of sales that went to any one given state?
 

MakerMovement

New member
I agree with Taxing Matters. However, the amount of money involved here would make that counter productive since you stated that you sold them all over the world.

What is the maximum amount of sales that went to any one given state?
Unfortunately, only countries are given, not states, on the financial report. You'd think I would be able to access billing addresses, but oddly that information doesn't seem to be included on the seller portal. The maximum amount would have to be less than $50 because that's all that was made in the year, but I do not know the exact maximum as I do not have sales reported by state (digital-only purchases that adds up to the minimum amount (set to $50), and then the seller portal/company sends you the $50 or more at the end of the month if you made at least the minimum, otherwise it rolls over to next month before you get paid. I only got actually paid once. ), and purchases were made from other countries besides the US.
Also, for each transaction, sales tax was not charged. So would sales tax have to come out of the income?
Thank you, Taxing Matters.
 
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LdiJ

Senior Member
Unfortunately, only countries are given, not states, on the financial report. You'd think I would be able to access billing addresses, but oddly that information doesn't seem to be included on the seller portal. The maximum amount would have to be less than $50 because that's all that was made in the year, but I do not know the exact maximum as I do not have sales reported by state (digital-only purchases that adds up to the minimum amount (set to $50), and then the seller portal/company sends you the $50 or more at the end of the month if you made at least the minimum, otherwise it rolls over to next month before you get paid. I only got actually paid once. ), and purchases were made from other countries besides the US.
Also, for each transaction, sales tax was not charged. So would sales tax have to come out of the income?
Thank you, Taxing Matters.
I asked the question that I asked because I was trying to figure out what your maximum liability could be to any one given state. Let me give you an example.

If the maximum sale to any one state was 5.00 and sales tax for that state was 7% then your liability would be 35 cents. Since obligations are rounded up or down to the nearest dollar, your obligation would be zero.

So, what was the maximum amount from any given country? That would at least be a start.
 
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