You might have heard of the iTunes tax and thought it had nothing to do with you. Think again! If you have nexus in one of these key states and you sell ANYTHING via digital download, you must collect and reimburse state sales tax on digital downloads.
There are a couple of key questions first before we look at the 18 states (plus DC) that could give you problems.
1. What states do you have nexus in?
If you’re confused about nexus and what qualifies, then you’ve been paying attention. It IS confusing. That’s because the states keep changing their minds and redefining what creates nexus and what does not. Until we get an answer from the US Supreme Court or Congress, we’re left at the whims of 50 states and the District of Columbia.
USTaxAid Tip: Join Megan and I on Wednesday, May 5, 2010 as we cover the latest in tax issues for eBiz companies. We’ll talk about nexus and give you solid tips you can use to protect your business. Register at http://www.DianesSeminars.com.
2. What is subject to sales tax in the states in which you have nexus?
This is where the iTunes tax (digital download tax) can come back to haunt you. Don’t assume you don’t have an issue just because your home state doesn’t tax digital downloads. (A digital download could be an eBook or an audio book, in addition to music.)
These 18 states (plus the District of Columbia) tax digital downloads:
District of Columbia
The details on the FREE teleseminar again are:
Wednesday, May 5, 2010 1 pm Pacific, 4 pm Eastern
Sign up at www.DianesSeminars.com
Don’t ignore this tax!
Fri, April 30, 2010 – Selling with PayPal? New Reporting Requirements
A new reporting standard passed a few years ago will jump into the forefront by January 2011. That’s when PayPal (and yes, that means eBay) will be forced to turn over their records of who bought and sold on eBay. If you’ve regularly sold on eBay and haven’t reported the sales on your tax return, expect a letter from the IRS.
You don’t want to miss this information!