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Common Questions about Sales Taxes

All About Sales Taxes for Your Business

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Everything you always wanted to know about sales taxes, including how to register for sales taxes, what products and services are taxable, tax rates in each state, sales tax vs. excise taxes, sales taxes vs. use taxes, sales taxes in online transactions, and sales taxes on out of state sales.

1. Do I Have to Charge Sales Tax?

Many small business owners assume that they don't have to charge sales tax. But are you sure? If your products or services are subject to sales tax in your state, you do have to collect and pay sales taxes to the state.

2. Are the Products or Service I Sell Subject to Sales Tax?

Learn how to find out if the products or services you are selling are subject to sales tax in the states where you do business.

3. Do I have to Charge Sales Tax for Internet Transactions?

If you are selling online to customers within your state, you must charge them sales tax. If you have a "presence" in another state, you must also charge sales tax. The laws on Internet sales are changing, as states try to get more revenue by increasing the concept of "presence."

4. How Do I Register with My State Taxing Authority?

You can register and set up your payment online in most states. Here is the information you need to have on hand in order to complete the sales tax registration form (varies by state).

5. How Do I Collect, Report, and Pay Sales Taxes?

The process of collecting, reporting, and paying sales tax differs for each state, but you can find out how in general the process works by reading this article.

6. Do I Have to Collect Sales Tax in My Home Business?

Many home business owners assume since they are selling from home their sales are not taxable. Not true; if the product or service you are selling is taxable, you must get a seller's permit and collect, report, and pay sales taxes.

7. Do I Have to Collect Sales Taxes on Out of State Sales?

Out of state sales are complicated and there are many different circumstances you need to consider if you have a nexus (presence) in other states. Learn about some of the common circumstances in this article.

8. How Do I Find Out Sales Tax Rates?

Sales tax rates change for each state and for each locality within each state. Learn about local option taxes and how you can find out tax rates by zip code.

9. What are Local Option Taxes? How Do I Found out Local Option Tax Rates?

Many states (34) allow localities to charge an additional "local option" sales tax on top of the state's general sales tax.  Usually these local option taxes are for specific purposes, like school funding or flood recovery.  If you sell to customers in various localities, you will need to know the local option tax for each locality where the customer is located; see this article for a site that allows you to search for local option taxes by zip code.

10. What is a State Sales Tax Holiday? How Does a Sales Tax Holiday Work?

Many U.S. states have sales tax holidays,  which a few days a year are set aside to allow people to buy certain items without paying sales tax.  This "holiday" is a benefit for merchants who sell these items (clothing and back-to-school items are featured in many states) and, of course, for the customers.  This article includes a list of sales tax holidays for 2010.

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