Do I need to pay state tax for online sales with no physical location?
I will only be selling my games online on my website. Do I need to file for state sales tax in Texas if I am already set up with the IRS and have my EIN?
Excerpt from the below link:
Do I owe tax on goods purchased via mail-order catalogs or Internet merchandise? Yes. A seller who uses catalogs or the Internet to sell goods is treated the same as any other seller of taxable items. If you purchase merchandise through a catalog or the Internet from a seller located in Texas, you owe Texas sales tax on the purchase. If you purchase merchandise through a catalog or the Internet from a seller located outside of Texas and use the taxable item in Texas, then you owe Texas use tax on the purchase. An out-of-state mail-order company or an Internet company may hold a Texas Sales and Use tax permit and collect Texas tax. If the out-of-state seller does not have a Texas permit or does not collect Texas use tax, the use tax is due and payable by the purchaser.
http://www.window.st...es/faq_use.html
Whether this is the current status, I have no idea but my best advice is ring up your local better business bureau/centre or government dept FAQ's - They should be able to answer the question for free and more to the point - accurately.
The question can also come down to whether a virtual good is also considered merchandise under your local/state laws as well -- situations do exist where a virtual product is exempt from certain taxes - but I would definitely check with your local information providers. They are far more likely to have answers relevant to your question.
Do I owe tax on goods purchased via mail-order catalogs or Internet merchandise? Yes. A seller who uses catalogs or the Internet to sell goods is treated the same as any other seller of taxable items. If you purchase merchandise through a catalog or the Internet from a seller located in Texas, you owe Texas sales tax on the purchase. If you purchase merchandise through a catalog or the Internet from a seller located outside of Texas and use the taxable item in Texas, then you owe Texas use tax on the purchase. An out-of-state mail-order company or an Internet company may hold a Texas Sales and Use tax permit and collect Texas tax. If the out-of-state seller does not have a Texas permit or does not collect Texas use tax, the use tax is due and payable by the purchaser.
http://www.window.st...es/faq_use.html
Whether this is the current status, I have no idea but my best advice is ring up your local better business bureau/centre or government dept FAQ's - They should be able to answer the question for free and more to the point - accurately.
The question can also come down to whether a virtual good is also considered merchandise under your local/state laws as well -- situations do exist where a virtual product is exempt from certain taxes - but I would definitely check with your local information providers. They are far more likely to have answers relevant to your question.
Soo, this may sound strange but...
What if you're selling from the middle of the ocean in international waters, using a satellite internet connection or something? No tax?
In fact I wonder what else that situation would change, hmm.
What if you're selling from the middle of the ocean in international waters, using a satellite internet connection or something? No tax?
In fact I wonder what else that situation would change, hmm.
Soo, this may sound strange but...
What if you're selling from the middle of the ocean in international waters, using a satellite internet connection or something? No tax?
In fact I wonder what else that situation would change, hmm.
If you live in the middle of the ocean, where do you buy your groceries and toothpaste? How do you generate the electricity for your Internet access?
-- Tom Sloper -- sloperama.com
The laws for this have been shifting, including a recent Amazon thing going on in Texas. Recommend you consult a lawyer. That said, it is typically the case that you must collect sales tax for residents of your state but not other states. That means if anyone is buying your game from Texas, they will need to pay you sales tax and you will need to account for it appropriately.
I will only be selling my games online on my website. Do I need to file for state sales tax in Texas if I am already set up with the IRS and have my EIN?
Yet another reason that you're probably better off with a digital distribution service.
SlimDX | Ventspace Blog | Twitter | Diverse teams make better games. I am currently hiring capable C++ engine developers in Baltimore, MD.
What if you locate your point of sale location (webserver / web service) and HQ your company in a state with no sales tax, such as Delaware, but operate out of a different state (ie. Texas)?
Eric Nevala
Indie Developer | Spellbound | Dev blog | Twitter | Unreal Engine 4
What if you locate your point of sale location (webserver / web service) and HQ your company in a state with no sales tax, such as Delaware, but operate out of a different state (ie. Texas)?
I don't think the location of the web server is a factor. If you operate out of Texas, you have to check with Texas tax laws. Ask a tax accountant. And/or go to your local SBA office and ask them any small-business questions you may have.
-- Tom Sloper -- sloperama.com
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