Advertising Sales Taxes

[ledrak]

I have a magazine with an office in the state of Florida. We are planning to sell ad space to clients from all over the US. I'm trying to find out if by operating in Florida I have to include Florida sales tax to the ad space we sell to clients in the magazine or not? As I understand it, advertising sales usually aren't subject to sales tax since it's not tangible goods. But I'm sure this varies from state to state. So would sales taxes based on the location of our company, or based on the location of the client buying the ad space?

Another words, if we sell ad space to a company in California, do we need to know the California tax regulations or do we simply abide by the Florida ones? And to take it a step further, does it matter where our company is incorporated? If our company is incorporated in NJ, but we have our office in FL, which tax laws do we abide by (if applicable)?

[SChinFChin]

I've been following this issue, and the rule is, unless you have a "physical presence" in the state, you do not have to collect sales tax in that state. If you don't have an office in CA, right off the bat, you don't have to collect sales tax in CA if you are in FL. But if you have an office in CA, then you'll have to review CA's sales tax laws, but you still might not have to collect it.

States have gone after Amazon.com for years, and they have consistently refused to collect sales taxes, including closing down some offices and warehouses, and severing affiliate ties to eliminate physical presence in certain states that has gone after them to avoid collecting the sales tax. There's been talk of congressional action to solve this problem on a national level, or interstate compacts, but so far it hasn't happened yet.

[Bubba Jimmy]

According to Amazon.com's website, "Companies selling over the Internet are subject to the same sales tax collection requirements as any other retailers. For more information about sales tax charged on your order, view the topic sections on this page."

They certainly charge sales tax on purchases sent to Kansas, Kentucky, New York, North Dakota, or Washington. Download a book sold by Harper Collins through Amazon and you'll pay sales tax in all states that have a sales tax.

Read more at: http://www.amazon.com/gp/help/custom...?nodeId=468512

[SChinFChin]

Thanks for the info.

I would imagine Amazon have to have a physical presence in certain states, warehouses or offices as such, so they would have to charge a sales tax at least in some states. Obviously, their stuff has to be stored and shipped from somewhere. I didn't notice NJ listed, I once lived and still shop in NJ, and NJ certainly has a sales tax, and I know friends of ours in NJ who orders from Amazon.

[flyingron]

It's hard to tell all the places Amazon had physical presence. I know for a fact they have a distribution center within a mile of my house in Virginia because some books I order show up in several hours by local courier with that return address. The other issue is that not everything purchased THROUGH Amazon is sold by them. They host commerce for hundreds of other retailers.

[SChinFChin]

It's hard to tell all the places Amazon had physical presence. I know for a fact they have a distribution center within a mile of my house in Virginia because some books I order show up in several hours by local courier with that return address. The other issue is that not everything purchased THROUGH Amazon is sold by them. They host commerce for hundreds of other retailers.

I buy small computer parts, cables software etc., and often Amazon features them, but usually through an affiliate. Then, on checkout, but before paying, I would find out if sales tax is charged or not, and nowadays, in NY, it's normally included.

So I would switch over to "Ebay", find some mom and pop seller, often places in the south like Alabama, place an order, go through checkout, and then find I don't get charged the tax.

Not long ago though, I priced Quickbooks through Amazon that charged me tax, then priced an Ebay dealer, cheaper and no tax, but then I went back got it through Amazon anyway because I felt that if something went wrong, Amazon would more likely stand behind it.

[flyingron]

If you want to illegally evade taxes, have at it. Just because they don't make companies without nexus collect sales tax, that doesn't mean you don't owe the use tax in NY.

[SChinFChin]

If you want to illegally evade taxes, have at it. Just because they don't make companies without nexus collect sales tax, that doesn't mean you don't owe the use tax in NY.

In NY, it's called the "use tax". When I buy these $5.99 ethernet cables on Ebay instead of paying $29.99 for them at my local Staples, I'm suppose to keep track of all those $5.99 receipts, and apply the sales tax to it, and at the end of the year, report them.

YIKES, I forgot about it again this year, and got no idea where my receipts are.

NY State had found few people reporting them, and when they tried a crackdown a few years back, there was such an outcry that the politicians just gave up on it.

But you may have hit on an answer to OP's orginal question. If he doensn't have a physical presence in NY, he's in FL, but has a customer here in NY, instead of him worrying about whether the customer is supposed to pay the sales tax, let the customer worry about that himself, and then report the "use tax", else this customer will be called a BIG BAD tax evader.