Chances are you know the percentage of local sales tax in your area and other areas that you frequent. So, you already know there can be vast differences in just driving to the next county or state. Are there also special provisions to fund roads or community buildings? What happens when you sell online? When you sell items online, you must charge some of your customers sales tax and submit that to your local government. You should think ahead to how you will handle this. The basic rule is that:

If your customers are in the same state as the physical location of your business, you must collect sales tax on items they purchase from you. If you do not collect this sales tax from customers located in your state, you will be held responsible for this money.

For instance, if you have a physical presence in Georgia, you will need to collect sales tax from sales that originate from Georgia. It does not matter whether the item ships from a warehouse in Arkansas, you'll still be liable for the sales taxes. Most consumers do not realize that many states also have a "Use Tax" that places the burden on them for paying tax on non-taxed Internet purchases. The e-commerce Blog has a chart on states’ policies on “Use Tax”.

Think you know the basic rules of sales tax on Internet purchases? Click on the icon to the right to see if you can spot the myths...