Do I have to pay taxes for items sold out of my state?

Question

I sell to people in Norway, Australia, Canada, and all over the US. My business is located in Texas. Should I have to pay sales taxes on those items that I sale out of my state?

Answer 1

You will have to check with the tax laws for the State of Texas - as well as each state or country that you do business in.  For some states, if you don't pay the sales tax, then you will have to charge your customers the sales tax.  If you don't pay or charge sales tax, you might have to deal with use taxes which are generally the same thing as sales tax.

If I live in Michigan and buy a car in Michigan, I pay sales tax.  If I live in Michigan and buy a car in Ohio, I pay "use tax."

I am not sure how this works on an international level - If you sell something to a customer in Norway, then Norway may require you to pay or charge some sort of tax.  If you sell one $100 item a year, then they probably are not going to worry about it - but is you are selling $100,000 worth of items a year to customers in Norway, they probably want to know about you...

If you are a retailer, you file for tax-exempt status and do not pay sales taxes on the items you purchase.  Then you charge sales tax when you sell the items to your customers.  The sales tax rules are changing as more and more states deal with internet sales and the potenial for lost revenues when people buy items on line.  

Most contractors I know go ahead and pay the sales tax on the items they purchase - then they do not have to turn around and charge their customers the sales tax when they install those items for their customer.

Answer 2

You don't have to pay Texas sales tax on anything shipped out-of-state.  You almost certainly don't need to pay sales tax for your customers in other states, unless you are considered to have a "nexus" in those states.  Some states are more aggressive than others at defining "nexus", but having a warehouse or agent in that state, or having advertising directed to that state, is usually found to be "nexus".

Whether you need to pay Canada GST, or the equivalent sales/use/VAT taxes in Norway and Australia is beyond my knowledge.  The custom forms you need to fill out for shipping will probably specify whether YOU need to pay taxes, and should determine whether the recipient has to pay custom fees.

Answer 3

You probably do not have nexus anywhere except Texas, so you should only collect and pay sales tax on sales shipped inside Texas.  It is up to the purchaser to pay use taxes to their state.